economy
This Chinese gold play is attractive even as the metal sees big price swings, analysts say
This stock still has room to run, the analysts predict, despite recent volatility in gold prices.
TL;DR
- Laopu Gold, a Chinese luxury jewelry company, is considered attractive by analysts despite recent gold price swings.
- Analysts from JPMorgan, HSBC, and Morgan Stanley are optimistic about Laopu's strategic resilience, DTC model, and brand strength.
- Laopu's stock has shown resilience, with its net profit for the first quarter reported at least 3.6 billion yuan.
- The company's popularity surged last year, with its stock posting a total return of over 160% as gold prices soared.
- Analysts believe Laopu can partially decouple from gold price cyclicality through branding and product innovations, noting repeat purchases and increasing per capita spending.
- Bank of America Securities downgraded Laopu to neutral due to gold price volatility and slower economic growth, but still sees potential upside.