Latest news with #LaopuGold
Forbes
20 hours ago
- Business
- Forbes
Why Laopu Gold Is One Of The Hottest Luxury Stocks Right Now
Beijing,China Most of you know by now that I've long emphasized the two powerful forces driving gold demand: the Fear Trade and the Love Trade. The Fear Trade is what most Western investors are familiar with. It's the flight to safety during times of uncertainty, driven by concerns over inflation, interest rates, geopolitical risk and more. Gold has historically been sought as a safe haven during crises and recessions. The Love Trade, on the other hand, is based on cultural affinity, religious tradition and rising household incomes, particularly in India and China, the two biggest consumers of the precious metal. Accounting for roughly 60% of global gold demand, the Love Trade is about buying physical gold as a symbol of status and celebration. This brings me to Laopu Gold, a Hong Kong-listed company we recently took a position in, as we believe it sits at the very heart of China's Love Trade. Founded in 2009, Laopu Gold is a homegrown luxury brand with a deep focus on traditional Chinese goldsmithing. Its name, Laopu, literally means 'Old Shop,' a nod to the company's emphasis on cultural pride and nostalgia. Laopu's business model involves selling high-purity 24-karat gold pieces using a fixed-price, high-margin model. More than just a jewelry retailer, Laopu is selling exclusivity and exquisite design, which may be why some people think of the company as the 'Hermès of gold.' The stunning results speak for themselves. Shares of Laopu Gold have surged over 2,300% since 2024 IPO Its stock has soared more than 2,300% over the 12-month period through June 4, 2025. Year-to-date, it's up 315%—all while much of the Chinese economy has seen lukewarm recovery at best. In an investment note dated May 28, JPMorgan projects Laopu's annual revenue will reach nearly $20 billion this year, representing a 135% increase over 2024. Net income is forecast to reach $3.8 billion, up from last year's $1.5 billion. Perhaps even more impressively, the company reported a gross margin of over 41%, nearly double that of Chow Tai Fook, China's largest traditional jeweler. Laopu's average store revenue exceeded 100 million yuan, the highest in the country for gold retail. It wasn't just Laopu's stock performance that drew us to the company; it was also the story. As I've shared with you many times before, gold plays an important, auspicious role in Chinese culture. The yellow metal is given at births, worn at weddings and handed down as heirlooms. Young Chinese consumers aged 18–34 now account for over a third of gold jewelry sales, according to Bloomberg's Chongjing Li. Laopu has tapped directly into this demand. Their boutiques—36 of them so far, with at least eight more planned this year—are strategically located in some of China's most prestigious malls and shopping districts, with lines sometimes stretching around the block. Their designs often go viral on Chinese social media. Since the start of this century, China's GDP per capita has increased over 13-fold, from under $1,000 in 2000 to approximately $12,600 in 2023. (For comparison's sake, India's GDP per capita has grown sixfold over the same period, or less than half as fast.) While there are signs of a slowdown, especially due to the real estate and demographic headwinds, we believe China's long-term picture still supports growing discretionary spending in Tier 1 and Tier 2 cities. That's where Laopu operates, and that's where the luxury gold market is most resilient. China's GDP per capita has increased 13-fold this century We believe Laopu is well-positioned to benefit from a shift in Chinese consumer behavior toward premium domestic brands. Much like how Moutai dominates high-end liquor or how BYD is overtaking Western electric vehicles (EVs) in China, Laopu is making the case that a Chinese company can lead in luxury jewelry. They've also begun international expansion, with stores opened in Singapore's Marina Bay Sands and Hong Kong's IFC Mall. No stock goes up forever, of course, and Laopu's meteoric rise has raised a few eyebrows. The company trades at earnings multiples some would call elevated (trailing 12-month price-to-earnings of 87x), and skeptics have compared Laopu to a 'story stock' riding retail hype. We're watching the fundamentals closely. But as investors who've followed the gold market for decades, we've seen that price often follows passion—especially in culturally driven demand markets. Laopu isn't a typical miner or ETF proxy for gold prices. We believe it's a pure play on China's cultural and increasingly affluent relationship with gold. And at a time when Western luxury brands are losing ground in China, Laopu's ascent feels like a secular trend, not a speculative flash. It's riding the Love Trade, and it's doing so in the most important gold market on Earth.
Business Times
6 days ago
- Business
- Business Times
Laopu Gold's 2,300% rally faces test after stock hits HK$1,000
A BREATHTAKING rally in Laopu Gold is facing a critical test after its stock price hit HK$1,000 (S$164), a rare milestone that may deter retail investors due to the steep price tag. The jewellery maker soared more than 2,300 per cent since its listing in late June 2024 to set a new record earlier on Thursday (Jun 5), emerging as the new face of Chinese luxury and outperforming over 500 peers in the Hang Seng Composite Index. Its share price far surpasses the second-most expensive stock in Hong Kong: bubble tea maker Mixue Group which is trading at around HK$580. While Laopu's ascent underscores market zeal towards China's new consumption stocks catering to Gen Z demand, investors will likely demand more to purchase shares at this level. With a minimum trading unit set at 100 shares by the company, it means a buyer must shell out HK$100,000 – the equivalent of US$12,750 – to gain exposure to Laopu. Share price moves on Thursday illustrate the point. The stock fell as much as 8.5 per cent after reaching HK$1,015 earlier in the session. Peer Chow Tai Fook Jewellery Group slid more than 1 per cent in Hong Kong while Chow Tai Seng Jewellery slumped 8.2 per cent on the mainland. Another crucial test will be a Jun 27 lockup expiry of 121.4 million shares. That's more than double the current number of free-float shares. The stock posted its worst weekly drop since its listing in December last year, just before the expiry of a six-month lockup on 10.8 million shares. 'Laopu is excessively expensive in my view, based on cash flow, even though growth looks promising,' said Yu Dingheng, fund manager at Shenzhen Flying Tiger Investment & Management. 'HK$1,000 is going to be a tough hurdle.' BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Companies listed in Hong Kong can set their own minimum trading units – known as a 'board lot' – ranging from dozens to thousands of shares. While investors can place orders for odd lots including a single share through brokerages, these transactions typically take longer to match and can incur higher fees. Bloomberg reported in March that the financial hub's exchange was discussing options to lower the threshold for investors to buy some of the most expensive stocks to boost trading activity. The retail portion of Laopu's initial public offering was nearly 600 times oversubscribed, prompting the company to increase the number of shares allocated to individual investors by six times to 11.2 million. Laopu currently trades at nearly 32 times forward earnings, above Chow Tai Fook's ratio at around 16. Laopu has yet to indicate any plans for a stock split, a common strategy taken by high-flying firms to cheapen the value of each share and make it more affordable. Tencent Holdings performed a five-for-one split in 2014, shortly after share prices peaked at above HK$600. Zai Lab divided each share into 10 in 2022, lowering the price to around HK$35. BLOOMBERG
Bloomberg
6 days ago
- Business
- Bloomberg
Laopu Gold Soars 2,300% to Become Hong Kong's Priciest Stock
A breathtaking rally in Laopu Gold Co. has pushed its stock price to above HK$1,000 ($127), a rare milestone that reflects the jewelry maker's emergence as the new face of Chinese luxury. The stock has soared more than 2,300% since its listing in late June 2024, trouncing more than 500 peers in Hang Seng Composite Index during the period. At HK$1,000 per share on Thursday, it far surpasses the second-most expensive stock in the financial hub: bubble tea marker Mixue Group which is trading at just above HK$600.
Business Times
16-05-2025
- Business
- Business Times
China's Pop Mart-loving Gen Z fuels big gains for investors
[NEW YORK] China's attempt to offset the damage of tariffs is getting a helping hand from Generation Z (Gen Z), which is spending big on everything from toys to bubble tea. The country's younger generation of shoppers is on a spree of what analysts call emotional consumption, defying a wider malaise in China's economy. Revenues at Gen Z favourites such as toymaker Pop Mart International Group, jewellery firm Laopu Gold and drinks chain Mixue Group have soared, fuelling breakneck moves in their stock prices. The spending boom offers a glimmer of hope for the world's second-largest economy, where an export-led growth model is under threat from trade tensions with the US, even amid a recent reprieve. Beijing has made boosting consumption and stimulating domestic demand priority No 1 as it attempts to redefine its economic model. The moves also underscore the huge profits on offer for investors in China's stock market, despite recent selling pressure caused by tit-for-trade moves between the US and China. The tariff pause between the world's two largest economies was needed to put a wider rally in the country back on track. Gen Z consumer stocks, though, had already roared ahead. Devoted to hobbies Gen Z consumption in China is a tale of two extremes. The over 250-million-strong army of shoppers, often defined as those born between 1995 and 2010, pinch pennies when it comes to everyday items such as bubble tea or noodles. They are willing to spend big on their hobbies, blowing hundreds or even thousands of US dollars on toys, celebrity merchandise and trendy jewellery. These consumers are not all that different from their Gen Z counterparts in the US, an extremely online bunch who drink less alcohol than their parents, look for small-ticket bargains, have few plans to buy property, and splurge on niche brands and hobbies their parents just do not understand. A NEWSLETTER FOR YOU Friday, 2 pm Lifestyle Our picks of the latest dining, travel and leisure options to treat yourself. Sign Up Sign Up 'The new consumer is self-indulgent, devoted to hobbies, less price sensitive, and spends on things they can connect to emotionally or those that provide sensory pleasure,' said Li Shouqiang, a fund manager at Shenzhen JM Investment Management. 'Essentially, anything that their elders consider frivolous.' Liu Meixuan, a 26-year-old e-commerce employee, offers a typical example: She buys cheap drinks from tea chain Chagee Holdings, using coupons to lower the price even further – but she also estimates she has spent as much as US$9,600 on trading cards featuring Korean pop stars. Gen Z spending alone will not be enough to turn around China's economy, which is still recovering from a years-long property slump, fighting against deflation and dealing with the impact of US tariffs. Although the world's two largest economies have agreed to a temporary reduction of levies, the detente came too late to avoid a hit to Chinese manufacturers and a lasting deal is still far from guaranteed. The idiosyncratic spending habits of Gen Z also mean it is tough for investors to spot winners in advance, since a disparate group of companies reap the benefits. Pop Mart and Bloks Group make toys. Mixue and Guming Holdings sell tea and other drinks. Laopu Gold, a jeweller offering traditional Chinese designs, became a Gen Z must-have after blowing up on social media. But the potential gains on offer for investors are eye-popping. Those five stocks have all more than doubled this year. Mao Geping Cosmetics whose celebrity make-up artist founder has burnished its appeal with Gen Z, has seen its shares jump almost 80 per cent. Auntea Jenny (Shanghai) Industrial, another tea seller which listed in Hong Kong last week, is already around 13 per cent higher since then. 'These businesses have clearly read the room and adapted to trends, which are likely here to stay,' said Mark Tanner, managing director of consultancy China Skinny in Shanghai. Their wild stock moves have shaken up the corporate landscape in China, creating a new crop of national champions. Pop Mart was worth less than either Mattel or Hasbro late last year but is now bigger than the two companies combined. Laopu Gold, a minnow compared to industry giant Chow Tai Fook Jewellery Group at the time of its listing in June, now has a greater market value despite having a fraction of its stores. Gen Z's obsession with hobbies has, predictably, led to clashes with their parents. Zhuo Xiaodou, a 20-year-old in Shenzhen, is so dedicated to collecting Formula One model cars – at a cost of as much as a few hundred US dollars a pop – that he scrimps on food to pay for them. To his parents, who send him money to get through college, this is just 'a waste', said Zhuo. 'They don't see the point.' Qi Jiaxiang, a 17-year-old high school student in the Hebei province, said his father's childhood in the countryside makes it hard for him to relate to his son's hobbies, which include a growing collection of badges featuring comic book characters. Investors are siding with the younger generation. Shares that were hot plays for Gen X and Gen Y consumption have dragged in comparison. High-end liquor maker Kweichow Moutai, once an investor favourite, hit an all-time high in 2021 and has lost a third of its value since then. Those of appliance maker Haier Smart Home are down this year, while rival Midea Group's shares are up just a few per cent. The new new thing Investors are now turning their attention to a series of initial public offerings planned by Chinese consumer companies that have Gen Z appeal, hoping to replicate Laopu Gold's more than 15-times jump since its listing last year. Collectible card maker Kayou, which sells in Pop Mart-style blind boxes, has filed a prospectus with the Hong Kong stock exchange, as has the popular fast food chain Guangzhou Xiao Noodles Catering Management. Toymaker Miniso Group Holding is considering spinning off and listing its Top Toy brand in Hong Kong, Bloomberg News previously reported. These deals are all likely to benefit from a continued spending spree among the cohort, who say they have no plans to change their consumption behaviour anytime soon. Icy Yang, a 30-year-old consultant in Shanghai, is among the Pop Mart mega-fans who helped drive a surge in the company's profits last year. She already owns dozens of the company's dolls, and recently teamed up with friends to participate in an online sale of its latest Labubu doll, a popular model. 'My only regret is that it never occurred to me to put as much as I have spent on the toys into Pop Mart's shares,' she said. 'I'd be so rich.' BLOOMBERG
Bloomberg
15-05-2025
- Business
- Bloomberg
China's Pop Mart-Loving Gen Z Fuels Big Gains for Investors
China's attempt to offset the damage of tariffs is getting a helping hand from Generation Z, which is spending big on everything from toys to bubble tea. The country's younger generation of shoppers is on a spree of what analysts call emotional consumption, defying a wider malaise in China's economy. Revenues at Gen Z favorites such as toymaker Pop Mart International Group, jewelery firm Laopu Gold Co. and drinks chain Mixue Group have soared, fueling breakneck moves in their stock prices.
