Chinese jeweller Laopu Gold shines as earnings nearly triple on sales bump at home, abroad

Wed Aug 20 2025

Robust growth at home and abroad nearly tripled Laopu Gold’s earnings in the first half of the year, with managers predicting even stronger momentum in the second half.

Net profit soared 290.6 per cent from a year earlier to 2.35 billion yuan (US$327 million) in the six months ended June 30, the Beijing-based company said in a statement on Wednesday. Revenue surged 251 per cent to 12.4 billion yuan.

The Hong Kong-listed jeweller attributed its rapid growth to its premium positioning, noting that 77.3 per cent of its customers also shopped for international luxury brands such as Louis Vuitton and Cartier, citing data from Frost & Sullivan. The high-end strategy also boosted gross margins, which climbed despite higher costs from rising gold prices.

Like its high-end peers, Laopu uses a relatively fixed pricing model, adjusting prices only two or three times a year to reflect fluctuations in gold rather than daily movements. Gold prices have jumped more than 20 per cent this year to around 760 to 780 yuan per gram, as investors seek safe-haven assets amid geopolitical risks and bet on a Federal Reserve rate cut in September.

Dubbed “the Hermes of gold” by Chinese consumers, the company recorded a 455 per cent jump in overseas revenue in the first half to 1.6 billion yuan, while sales at home increased 233 per cent to 10.8 billion yuan.

The bulk of Laopu’s sales comes from retail stores, which are situated in premium shopping centres in top-tier Asian cities to tap high-spending customers. As of June 30, the company owned and operated 41 stores across 16 cities, according to the statement.

The company expanded its footprint in Hong Kong with a location in IFC Mall in Central in April. It also opened a shop in Singapore in June.

Momentum in Singapore was likely to pick up as customer traffic rises during the summer holiday season, Goldman Sachs analysts said in a report on Wednesday. Overseas expansion was likely to accelerate further with new store openings and stronger engagement with non-Chinese customers, they added.

New sales channels and store optimisations would boost revenue and net profit in the second half, company executives said.

Inventory turnover days – a metric of how fast a company’s inventory moves – dropped to 150 in the first half from 195 in 2024. The company could raise prices for a second time this year this month, which would further support its gross profit margins, Goldman analysts said.

Laopu declared an interim dividend of 9.59 yuan per share, implying a 72.1 per cent dividend payout ratio, versus the US investment bank’s estimate of no dividend.

Shares in Laopu jumped 8.8 per cent to HK$782 on Wednesday. The stock has gained 196 per cent in 2025 and more than 800 per cent over the past 12 months.

Source: https://www.scmp.com/