Despite recent fluctuations in precious metal prices, Chinese jewelery company Laopujin still has significant upside potential, analysts say. Over the past two years, Hong Kong-listed Laopu has become an upstart on China’s luxury scene, reportedly captivating local audiences – and LVMH chairman Bernard Arnault – with its gold jewelery craftsmanship. Laopu’s popularity soared last year as gold prices soared, with the stock’s total return exceeding 160%. However, the precious metal’s price has fallen about 20% from its January high, hitting a four-month low of $4,097.99 on March 23. The company’s stock has fallen just 0.16% year-to-date after Laopu revealed on March 23 that its first-quarter net profit was at least 3.6 billion yuan (about $520.8 million). “Laopu is our top choice in China’s consumer sector,” JPMorgan analysts said in a note on Wednesday, noting the company’s “strategic resilience amidst the current volatility in the gold market.” “We see Laopu as well-positioned to benefit from experience-driven growth with a systematic approach (disciplined store count, direct-to-consumer (DTC) model, and differentiated quality of service maintained by a highly selected and trained team),” the analysts added. They also noted that while both the jeweler and JPMorgan expect gold prices to continue rising this year, Laopu has 17 years of experience in pricing products even when gold prices are depressed. JPMorgan is overweight on the stock, with a price target of HK$1,296 (approximately $165.63). This is more than double Lao Po’s Friday closing price of HK$617. Gaining fans The Beijing-based Chinese jewelry company has gained fans not only through its unique, locally-inspired designs, but also through regular product price increases and exclusive discounts, reinforcing its concept of investment products. Additionally, Laopu typically only opens stores in China’s highest-end shopping malls. “Gold prices retreated from a peak of $5,500/oz on January 29, 2026 to $4,500/oz on March 23, but Laopu implemented a price hike on February 28 when gold prices were $5,200,” HSBC analysts noted in a March 24 report. “We believe Laopu can partially decouple from gold price cyclicality through branding and product innovation,” HSBC analysts said. They rate the stock as a “buy”, but lowered Lao Po’s price target from HK$1,023.20 to HK$950, mainly due to higher costs due to gold price risk. Since the pandemic, Chinese consumers have generally become more price-conscious. While Western luxury brands are revamping their local strategies, Laopu represents a new wave of Chinese brands vying for the same market. According to Rothschild’s forecasts, Laop’s sales in 2025 are estimated to exceed Richemont’s jewelry sales in China last year, including Cartier. Brand Awareness vs. Gold Price “Brand strength drives ratings beyond gold,” Morgan Stanley analysts said in a March 24 report on Lao Po, rating it as overweight with a target price of HK$1,010. “If demand remains consistently strong for a quarter or two in an environment of falling gold prices, Laopu could prove to be a brand rather than a gold agent, and the stock could be meaningfully revalued,” analysts said. They pointed out that repeat purchases will account for 38% of Laopu’s sales in 2025, and the proportion will be even higher in the first quarter of 2026, while per capita spending last year increased from 50,000 yuan in 2024 to 85,000 yuan. However, Bank of America Securities downgraded Laopu’s rating from “buy” to “neutral” on March 26, taking into account fluctuations in gold prices and slowing economic growth. “We believe the rise in gold prices over the past two years has been one of the key drivers for gold and jewelery stocks, as demand for gold has been supported by the perception that gold is a good store of value,” the analysts said. The target price was lowered to HK$774 in Lao Po, still reflecting a 25% upside from Friday’s closing price. —CNBC’s Michael Bloom contributed to this report.
