Shouting to Hermès: Seven Secrets Behind the Financial Report of Lao Pu Gold
Author | Zhong Yixuan
Editor | Qiao Qian
"If those selling gold can't outperform those selling leather goods, we need to go back and reflect."
On April 1st, at the 2024 financial report performance meeting of Laopu Gold, founder Xu Gaoming used a joking remark to hit directly at Laopu Gold's ambition.
Behind the benchmarking against Hermès, Laopu Gold has almost created a miracle for a gold brand in the Hong Kong stock market. In 2024, Laopu Gold achieved sales of 9.8 billion yuan, a year-on-year increase of 166%; net profit reached 1.47 billion yuan, a year-on-year increase of 254%; gross profit was approximately 3.51 billion yuan, a year-on-year increase of 162.9%. As of the closing price on the day the financial report was released, it was HK$868 per share, a cumulative increase of 20 times compared to the issue price of HK$40.50 per share in June last year.
What supports this miracle is even only 36 stores and 350,000 members.
Even grander goals lie ahead. At the performance meeting, Xu Gaoming kept coming up with quotable quotes, once pushing the market sentiment to its peak. "In the future, the average store efficiency must exceed 1 billion yuan", "Stores with less than 500 million yuan in sales will be directly rejected", "We represent high - end luxury brands", "Laopu Gold always positions itself in a non - competitive state". In investment groups, some people are already asking for a collection of Xu Gaoming's classic quotes.
What kind of company is Laopu Gold exactly? Through what kind of operations has this company made gold start to have the experience attributes of luxury goods? Let's quickly depict it with 7 labels.
Achieve a store efficiency target of over 1 billion yuan and surpass Hermès
"Achieving a store efficiency of over 1 billion yuan for Laopu Gold stores is our pursuit. In the future, stores with a store efficiency of less than 500 million yuan may be removed."
When Xu Gaoming stated this goal, the only round of applause on that day erupted at the performance meeting.
In 2024, Laopu Gold achieved an average sales performance of approximately 328 million yuan in a single shopping mall, with an average store efficiency exceeding 200 million yuan, and the same - store sales growth reached 121%. According to Frost & Sullivan data, among all well - known jewelry brands (including international and domestic brands), Laopu Gold has jumped to the top in terms of single - mall revenue and sales per square meter in the Chinese mainland.
For any brand, especially high - end luxury brands, a store sales of 1 billion yuan is a dream goal. "A store efficiency of 1 billion yuan is enough for Laopu Gold to cover the rent levels in any corner of the world", Xu Gaoming also revealed that according to the data from the first quarter of 2025, the store efficiency of some Laopu Gold stores has already surpassed that of Hermès.
Currently, the investment in a single Laopu Gold store has exceeded 50 million yuan.
The next step is "goldware"
In the past, due to the characteristic that the higher the purity of gold, the softer its texture, most inlaying processes in the market were completed based on K - gold.
Laopu Gold is the first brand to launch full - gold inlaid diamonds. After overcoming this craftsmanship, this series of products has truly increased Laopu Gold's gross profit margin and also created more possibilities for self - wearing scenarios. The prospectus once disclosed that in 2023, the gross profit margin of Laopu's full - gold inlaid products was 8.9% higher than that of full - gold products.
As of mid - 2024, full - gold inlaid products accounted for 61% of Laopu Gold's total product revenue, while a year ago, this figure was 53%, basically balanced with the proportion of full - gold products.
But now, Xu Gaoming's ambition is no longer limited to gold jewelry, but to become a full - category gold brand. "Laopu's product positioning determines that our high - end customers are not focused on jewelry, but on goldware. To some extent, goldware has not received much attention from the public, peers, and investors. Laopu has not emphasized it much in the past. (Now) I have started to emphasize that Laopu is a full - category gold brand, not a gold jewelry brand."
According to the official website of Laopu Gold, the goldware series is mainly made of plain gold and is currently divided into two major series: antiques and collectibles. The products are basically displayed in the study exhibition hall of Laopu Gold stores. As early as last year, the pure - gold four treasures of the study series also sparked heated discussions on social media.
This year, Laopu Gold has officially established a high - end customer management department targeting the goldware - purchasing population.
Not selling gold, but selling luxury goods
The biggest difference from gold brands such as Chow Tai Fook is that Laopu Gold has deviated from the pricing logic of "gold price + processing fee", and all its products are sold at a fixed price.
According to Laopu Gold's prospectus, in 2023, full - gold products in the price range of 10,000 to 50,000 yuan accounted for 24.3% of the total revenue, and those in the range of 50,000 to 250,000 yuan accounted for 13.4%. For full - gold inlaid products, the proportions in the above two dimensions were 40.7% and 5.6% respectively.
This also makes Laopu Gold's gross profit margin far exceed that of its peers. In 2024, Laopu Gold's gross profit margin was 41.2%. By horizontal comparison, as of the third quarter of 2024, the sales gross profit margin of Lao Feng Xiang was only 6.5%, and the gross profit margin of Chow Tai Fook in the same period was approximately 31.4%.
Similar to luxury goods, Laopu Gold has maintained a price - increase pattern of about 2 - 3 times a year. An interesting phenomenon is that when the gold price soared last year and the daily gold price was constantly being refreshed, the fixed - price Laopu Gold seemed to have "lagging" and "certainty" in price increases.
Although constantly emphasizing its "luxury" positioning, when the gold price goes down, whether Laopu Gold, as a gold - related product, can still maintain a high premium will also face doubts. However, founder Xu Gaoming seems quite confident. At the performance meeting, he clearly stated that "he doesn't consider doing gold hedging" and firmly believes that Laopu has largely got rid of the influence of the gold price, saying that "the price will still increase in the future".
"Financially free" designers
In 2024, Laopu Gold's R & D expenses increased by 78.8% year - on - year to 19.2 million yuan, mainly used to increase the salaries of R & D personnel.
This R & D expense is not high. In contrast, Lao Feng Xiang's R & D expenses in 2023 were approximately 36.58 million yuan. However, Xu Gaoming said at the performance meeting that Laopu Gold is not a high - tech company. On the contrary, this indicator reflects the investment in intellectual capital.
In fact, Xu Gaoming himself serves as the chief designer of Laopu Gold. This founder "spends 70% of his time on product R & D". In 2023, Xu Gaoming's personal annual salary was 4.072 million yuan. According to the annual report, the current research and design team led by Xu Gaoming has a total of 20 members, accounting for 2% of the total number of employees.
To retain such a small and elite team, Laopu Gold's investment has long exceeded the paper R & D expenditure and is quite generous. Xu Gaoming mentioned at the performance meeting that "the market value of the original stocks held by them (the designer team) has exceeded 1 billion yuan."
In addition, Laopu Gold has always been known for its high salaries in the industry, with a salary level 2.8 times that of its peers. The prospectus once disclosed the details of Laopu Gold's sales and distribution expenses in 2023. Employee costs ranked first, accounting for 5.4% of the revenue. In the industry, the legend that the salesgirls at Laopu Gold "have an annual salary of 300,000 yuan" is also widely spread.
350,000 loyal members
As of the end of 2024, the number of Laopu Gold's loyal members has reached 350,000, compared with 200,000 in 2023.
In the prospectus, Laopu Gold once defined loyal members as those who have purchased products at least once. Senior loyal members are those who have accumulated consumption of more than 300,000 yuan - this level is gradually approaching the VIC (Very Important Client) threshold of luxury brand Gucci.
Loyal members are continuously injecting blood into Laopu. At the performance meeting, senior executives disclosed that currently 60% of Laopu Gold's sales revenue comes from repeat purchases.
The spending power of Laopu Gold's senior loyal members is even more astonishing. As of the end of 2023, customers with an annual consumption of more than 300,000 yuan accounted for less than 1%, but contributed more than a quarter of Laopu Gold's revenue. Users with an annual consumption of more than 1 million yuan accounted for only 0.1%, but contributed as much as 15.9% of the revenue.
VIC customers have always been the high - net - worth group that luxury brands most want to compete for and retain. Correspondingly, brands are also willing to create expensive experiences for them. This is why Laopu Gold, which wants to position itself as a "Chinese luxury brand", is willing to spend a lot of money on building a gold exhibition hall in the store and providing Evian mineral water and Godiva chocolates for customers.
Catching VIC means catching the future.
Entered 9 out of the top 10 shopping malls in China
If we include the Shanghai Plaza 66 store that is under renovation, as of today, among the top 10 high - end shopping malls in China, Laopu Gold has covered 9, only missing the Shanghai IFC Mall.
This is also the reason why Laopu Gold has always been praised by the outside world as "not like a gold brand, but more like a luxury brand". As of the end of 2024, Laopu Gold had 36 stores in 15 cities, mainly in the SKP and Mixc series.
Just 36 stores have created nearly 10 billion yuan in revenue for Laopu Gold. Laopu Gold's sales are mainly through offline stores. Last year, Laopu Gold's offline revenue was approximately 8.535 billion yuan, a year - on - year increase of 164.3%, accounting for 87.6% of the total revenue.
In addition to the lease relationship, the interest relationship between Laopu Gold and top - luxury shopping malls also lies in the commission split. For example, the joint - operation model is a common brand - cooperation method in SKP. The shopping mall and the brand split the turnover according to an agreed ratio, and usually there are also requirements for the turnover. Naturally, this ratio is directly related to the brand's bargaining power. For high - end luxury brands such as LV and Chanel, the commission rate is generally below 10%.
A detail worthy of attention is that since last year, Laopu Gold once created a queuing myth on the anniversary of the Beijing SKP store, which was also the most important node for it to break through the circle on social media. Xu Gaoming said at the performance meeting that "Laopu Gold didn't manipulate the traffic; it was all spontaneous."
But behind this "spontaneous" phenomenon is naturally the result of being bound by multiple interests. SKP launched full - reduction and point - accumulation activities to stimulate Laopu Gold's transactions. The points - redeemed cash vouchers and discount differences allowed purchasing agents to profit and promoted the popularity of Laopu. Finally, the shopping mall got a rebate from the high - volume sales, and the interests kept rolling, forming the source of Laopu Gold's low - cost traffic.
"I really got to know the Laopu Gold brand on the first day of the opening anniversary of Wuhan SKP." A Wuhan Laopu Gold consumer with an annual consumption of more than 700,000 yuan once told 36Kr.
Go overseas for growth
Laopu Gold has chosen Singapore and Japan as its first stops for going overseas.
Xu Gaoming revealed at the performance meeting that the first step for Laopu Gold to go overseas is to penetrate the Chinese community, and the second step is to target the non - Chinese community. Considering the differences in the gold - jewelry - wearing cultures between China and foreign countries, Laopu Gold will use goldware to attract customers. "Throughout history, regardless of China or foreign countries, the status of gold in utensils has always been supreme."
Currently, Laopu Gold has confirmed its settlement in the Marina Bay Sands Shopping Mall in Singapore - a well - known local landmark. The last Chinese brand to enter was Heytea.
However, as a brand closely related to Chinese traditional culture, going overseas not only means challenges in product structure, consumption habits, and cultural value orientation, but also a very different competitive environment. Different from the sluggish situation in China in recent years, Japan is still a growing market for high - end jewelry brands such as Van Cleef & Arpels and Cartier. Although Laopu Gold can use goldware to avoid some competition, as a brand whose core product is gold jewelry, it is still difficult to avoid a direct confrontation with its competitors.