Chinese jeweller Laopu Gold shines as earnings nearly triple on sales bump at home, abroad
Overseas expansion should accelerate with new store openings and stronger engagement with non-Chinese customers, Goldman Sachs says
Robust growth at home and abroad nearly tripled Laopu Gold’s earnings in the first half of the year, with managers predicting even stronger momentum in the second half.
Net profit soared 290.6 per cent from a year earlier to 2.35 billion yuan (US$327 million) in the six months ended June 30, the Beijing-based company said in a statement on Wednesday. Revenue surged 251 per cent to 12.4 billion yuan.
Like its high-end peers, Laopu uses a relatively fixed pricing model, adjusting prices only two or three times a year to reflect fluctuations in gold rather than daily movements. Gold prices have jumped more than 20 per cent this year to around 760 to 780 yuan per gram, as investors seek safe-haven assets amid geopolitical risks and bet on a Federal Reserve rate cut in September.
Dubbed “the Hermes of gold” by Chinese consumers, the company recorded a 455 per cent jump in overseas revenue in the first half to 1.6 billion yuan, while sales at home increased 233 per cent to 10.8 billion yuan.
The bulk of Laopu’s sales comes from retail stores, which are situated in premium shopping centres in top-tier Asian cities to tap high-spending customers. As of June 30, the company owned and operated 41 stores across 16 cities, according to the statement.