NEWS WRAP: Laopu Gold forecasts triple profit growth on booming demand

The high-end jeweler said its profit rose about 250% last year as it tapped into China’s rising appetite for luxury gold items

By Teri Yu

Luxury jeweler Laopu Gold Co. Ltd. (6181.HK) said on Friday that it expects to report an annual profit of between 1.4 billion yuan ($193 million) and 1.5 billion yuan for 2024, up 236% to 260% from the 416.3 million yuan profit it earned the previous year.

Laopu attributed the big gains primarily to its rising brand and market influence, leading to substantial revenue growth for both its offline and online stores. It also credited its ongoing efforts at optimization, innovation, and iteration. Laopu Gold opened seven new stores and expanded four existing ones last year, further boosting revenue by lifting its national store count to 38.

Laopu is a relative newcomer to China’s gold jewelry market, which is dominated by more established players like Chow Tai Fook (1929.HK) and Chow Sang Sang (0116.HK), both of Hong Kong, which have been around for nearly a century. Laopu, whose name means “old store” in Chinese, was only founded in 2009 with the launch of its first store in Beijing.

Focused on making products in the “ancient gold” style centered on imperial Chinese techniques, Laopu has carved out a niche at the high end of the market with its traditional-looking gold and diamond jewelry that have become popular among affluent customers. It has earned a nickname as “the Hermes of the gold sector,” and says it competes with upscale foreign brands like Cartier and Tiffany for high-end jewelry customers.

Unlike some of its peers that sell their gold jewelry mostly based on weight, Laopu sells a significant portion of its products at fixed prices, with most costing more than 10,000 yuan. The company also operates in high-end shopping malls and limits its store network to maintain its exclusive image. Laopu’s current 38 retail outlets pale in comparison to Chow Tai Fook, which has over 7,000 stores on the Chinese Mainland.

During the recent Chinese New Year holiday, some customers visiting Laopu’s Beijing store lined up for over six hours just to enter and buy some of its popular items, including diamond-inlaid gourd jewelry and vajra crosses, which are considered auspicious for the holiday.

Laopu made its Hong Kong trading debut last June after two failed attempts to go public on the Shenzhen Stock Exchange, and has seen its shares soar since then. The stock jumped from its IPO price of HK$40.50 to close at HK$70 on its first trading day, and has continued to reach new heights, closing at HK$211 by end of 2024.

The stock rose 17.2% to close at HK$549 on Friday, representing a thirteen fold increase from its listing price and giving the company a market capitalization of HK$92.14 billion ($11.86 billion).

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