JPMorgan Chase & Co. reiterated its “Overweight” rating on Laopu Gold following a 22% slide in the jeweler’s stock price in April, calling the current valuation an attractive entry point for investors.
The bank maintained its HK$1,296 price target for the Hong Kong-listed shares, arguing that investor concerns over gold price volatility and a potential share placement are overblown. “We believe recent festive demand has been resilient, the likelihood of a near-term placement is low, and channel upgrade continues,” the bank said in a note dated April 29.
JPMorgan raised its earnings forecasts for Laopu Gold for this year and next by 5% to 8%. The bank projects the current valuation corresponds to a price-to-earnings ratio of just 10.7x for 2026 and 8.7x for 2027, suggesting a significant re-rating is possible. The HK$1,296 target is equivalent to a 19x P/E ratio for the next fiscal year.
The report positions Laopu Gold as a top pick in the China consumer sector, suggesting the recent stock weakness presents a buying opportunity. The bank’s confidence in the gold retailer aligns with its broader bullish view on the underlying commodity. Other JPMorgan reports note that record purchases by global central banks in recent years provide a strong support level for gold prices, underpinning demand for retailers like Laopu.
This positive analyst action provides a strong counter-narrative to the stock's recent performance, which has been hit by investor fears. Investors will likely watch the company’s next sales update for confirmation of the resilient demand thesis outlined by the bank.
This article is for informational purposes only and does not constitute investment advice.
