The stock price of Laopu Gold has increased tenfold in 9 months since its listing. Has it become the "new Moutai"? | Kejin · Big Consumption

Author｜Chen Sizhu

Editor｜Xie Yunzi

Since entering 2025, with the continuous rise in gold prices, the prices of gold jewelry have also increased.

According to 36Kr's analysis, the prices of pure gold jewelry from gold and jewelry brands including Chow Tai Fook, Luk Fook Jewellery, and CHJ Jewellery have generally approached 870 yuan per gram. Additionally, according to data from the China Gold Association, during the Spring Festival in 2025, national gold consumption increased by 13% year-on-year. This can be regarded as a recovery in gold consumption in recent years.

Looking at a longer time frame, the parallel rise in gold prices and consumption stratification have intensified consumers' wait-and-see mentality, putting pressure on gold consumption stores.

Publicly available information shows that in 2024, China's gold consumption decreased by 9.58% year-on-year. Among them, the consumption of gold jewelry decreased by 24.69% year-on-year. A salesperson at a gold store told 36Kr that in the past two years, people have been more cautious in their consumption of gold jewelry.

Among many gold and jewelry brands, Lao Pu Gold, whose product prices far exceed the gold price, seems to be an exception. Before the Spring Festival, 36Kr found during a visit that there was a long queue at Lao Pu Gold in Wangfujing Department Store, and most people had been queuing for more than an hour.

The booming consumer market has also driven a double increase in performance and stock prices. Calculated based on the closing price of 423 Hong Kong dollars per share on February 10, Lao Pu's stock price has increased by more than 944% compared to the issue price of 40.5 Hong Kong dollars per share in June last year, with a market value of 71.219 billion Hong Kong dollars, becoming a rare "ten-bagger" in the Hong Kong stock market, showing a momentum similar to that of "New Moutai".

While other brand gold stores are continuously closing and experiencing declining performance, what makes Lao Pu Gold "stand out" and how long can this momentum last?

Before the Spring Festival, there was a long queue at Lao Pu Gold store; photographed by 36Kr

Fixed-price Gold Jewelry, Making a Profit of 3.5 Billion

Although the brand is named "Lao Pu", it is actually a rising star, and its listing process has not been smooth.

In 2009, Lao Pu Gold opened its first store in Beijing, specializing in selling ancient gold jewelry, and the company was established in 2016. Four years later, Lao Pu Gold submitted materials to the China Securities Regulatory Commission for the first time. Unfortunately, due to issues such as related transactions, Lao Pu Gold's initial listing application was not approved.

In June 2023, its second attempt to list on the main board of the Shenzhen Stock Exchange also ended in failure. In November of the same year, Lao Pu Gold, which had to "abandon the A-share market and turn to the Hong Kong stock market", submitted a prospectus to the Hong Kong Stock Exchange and was successfully listed on June 28 of last year.

Unlike other gold jewelry brands, in Lao Pu Gold's official introduction, it is prominently stated that it is the first brand in China to promote the concept of "ancient gold" with a gold-making process inherited from the Qing Dynasty. In terms of management, Lao Pu Gold also strictly adheres to the "three no principles" - that is, it does not sell hard gold or K gold, but only focuses on ancient pure gold; it does not sell by the gram, but at a fixed price; and it does not do franchising, but only operates directly.

Looking at the specific products, Lao Pu Gold, which adheres to the fixed-price strategy, has product prices mostly concentrated in the range of 10,000 to 50,000 yuan.

The prospectus shows that among the sales of all Lao Pu Gold products, the proportion of "pure gold products" is 24.3%, and "pure gold inlaid products" reaches 40.7%. In addition, products priced between 50,000 and 250,000 yuan account for 19%. More high-end products, such as cultural and collectible items like gold bowls, gold kettles, and gold Buddha, with prices exceeding 250,000 yuan, account for 6.7% of sales.

Lao Pu Gold, which has a similar narrative to international luxury brands, attracts a flood of middle and high-end consumers. The management of Lao Pu Gold has always been clear that "it aims to have the same high-end positioning as Van Cleef & Arpels."

Based on the price estimates from Lao Pu Gold's Tmall flagship store by 36Kr, the average gold price of its products is mostly above 1,000 yuan per gram. The extremely high premium brings a high gross profit, making the company's performance very impressive.

The prospectus shows that from 2020 to the first half of 2023, Lao Pu Gold's net profits were 88 million yuan, 114 million yuan, 94.529 million yuan, and 216 million yuan, respectively.

In its first financial report after going public, Lao Pu Gold also maintained a high growth trend.

In the first half of 2024, Lao Pu Gold's revenue reached 3.520 billion yuan, an increase of 148.34% year-on-year; the net profit attributable to the parent company was 588 million yuan, an increase of 198.75% year-on-year. According to the financial report data, 61% of its revenue in the first half of the year came from pure gold inlaid products, and the overall gross margin was 41.3%.

Compared with industry peers, Chow Tai Fook's gross margin for the first half of the fiscal year 2025 was 31.4%, while Chow Sang Sang's was 28.3% in the first half of 2024. Lao Feng Xiang's gross margin in the middle of 2024 was 9.21%, and China Gold's was only 4.39%.

Under this development trend, brokerage firms are also optimistic about the subsequent development of Lao Pu Gold. CICC predicts that the company's revenue in 2024 will be 7.5 billion yuan, an increase of 136% year-on-year; the net profit attributable to the parent company will be 1.2 billion yuan, an increase of 187% year-on-year; Goldman Sachs has also raised its net profit forecast for Lao Pu Gold from 2024 to 2026 by 11% to 26%.

Financial report data of leading gold enterprises in the first half of 2024; charted by 36Kr

How Long Can Lao Pu Gold Stay Popular?

"Currently, the competition for mall spaces among gold jewelry brands is very fierce. If a shopping center wants to accommodate three gold jewelry brands, nearly ten brands will participate in the competition, but Lao Pu Gold has an absolute advantage."

In the observation of Du Bin, the secretary-general of the Brand Professional Committee of the Shanghai Shopping Center Association, high-end shopping centers have a positive attitude towards the settlement of Lao Pu Gold. The reason is that it has extremely high traffic and the brand itself is also new.

Unlike Chow Tai Fook, which is actively seeking market penetration and rapid store openings, as of June 30, 2024, Lao Pu Gold has only 33 self-operated stores nationwide, mainly located in high-end shopping centers such as SKP and Mixc.

Frost & Sullivan also shows that as of last April, Lao Pu Gold's coverage rate in China's top ten high-end shopping centers is 80%, ranking first among Chinese gold and jewelry brands and approaching luxury brands like Tiffany & Co.

Despite the small number of stores, Lao Pu Gold still has extremely high user stickiness and has brought considerable revenue.

According to the prospectus data, in 2023, the number of Lao Pu Gold members exceeded 93,000. Members who make purchases 1 to 5 times a year contribute 2.286 billion yuan to the company's revenue, accounting for 71.5% of the total revenue; members who make purchases 6 to 30 times contribute 12.1% of the revenue.

Zhao Lingyi, the chief analyst of retail e-commerce at Shenwan Hongyuan, believes that Lao Pu Gold's high-end luxury positioning is unique and differentiated, breaking the mental occupation of high-end consumers in China by high-end luxury jewelry brands. In the current situation where consumption is polarized, high-net-worth individuals are still willing to pay for high-premium quality goods. The success of Lao Pu Gold also seems to point out a reference direction for gold jewelry brands that are trapped in the "cycle dilemma".

Of course, in the context of the overall slow growth of the gold market and the increasingly fierce industry competition, the development of Lao Pu Gold is not clear.

"The popularity of Lao Pu Gold may not last long." In Du Bin's view, the handmade ancient gold craftsmanship that Lao Pu Gold mainly features does not have a strong technical advantage in the industry.

In recent years, more and more leading enterprises have entered the ancient gold track.

Public data shows that in 2023, the total income of the top five gold and jewelry brands' ancient gold products was approximately 72.4 billion yuan, accounting for 46.1% of the overall share of the ancient gold market in China. However, the sales revenue of Lao Pu Gold's "ancient gold jewelry" only accounts for 2% of the national total share. Judging from the revenue scale alone, there is still a considerable gap between Lao Pu Gold and other leading enterprises.

In contrast, Lao Pu Gold's sales expense ratio has been increasing year after year, while its investment in research and development is slightly insufficient.

In the first half of 2024, Lao Pu Gold's sales and distribution expenses were 532 million yuan, an increase of 113% year-on-year. Lao Pu Gold explains this as an increase in shopping center rents, employee costs, and advertising expenses. In contrast, Lao Pu Gold's research and development expenses during the same period were only 6.56 million yuan.

Comparing with other domestic gold and jewelry companies horizontally, Lao Feng Xiang's research and development expenses during the same period were 16.78 million yuan, CHJ Jewellery's were 29.06 million yuan, and DR's were 9.345 million yuan. As a brand that stands out for its design and craftsmanship, if Lao Pu Gold wants to maintain its advantage, it still needs to continuously increase its investment in research and development.

In the medium and long term, industry investors are still optimistic about the gold price and Lao Pu Gold.

In Zhao Lingyi's view, if the gold price can maintain a relatively moderate growth trend in the future, it will also promote the sales of gold jewelry. For Lao Pu Gold at present, if it wants to continue to maintain the top luxury brand name, it needs to create a deeper brand value and turn its attention to the international market to enhance its popularity globally.

From this perspective, it is not easy for Lao Pu Gold to maintain an extremely high growth rate in the future.

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