Citibank: Sets the target price for Luk Fook Gold at HKD 1,162, making it the top pick in the Chinese jewelry sector

MaticHoleFiller · 2026-03-30T04:06:02+00:00

Citigroup's latest research report indicates that Lao Pu Gold's first-quarter performance exceeded expectations, with projected revenue of 16.5 billion to 17.5 billion yuan. The firm maintains a "Buy" rating with a target price of HKD 1162. Although falling gold prices may suppress demand, Lao Pu Gold still demonstrates robust growth potential, showing profit expectations above market consensus, with relatively low short-term downside risk.

MaticHoleFiller

2026-03-30 04:06:02

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Citigroup released a research report stating that Lao Pu Gold (06181) had previously issued an earnings upgrade announcing strong performance for 2025, and the latest first-quarter earnings guidance far exceeded expectations, with both revenue and profit margins higher than the bank’s and market forecasts. In the first quarter of this year, revenue reached 16.5 to 17.5 billion RMB, more than doubling year-on-year, accounting for 41% to 44% and 45% to 47% of the bank’s and market’s full-year revenue forecast for 2026, respectively. The bank maintains a “Buy” rating on Lao Pu Gold, with a target price of 1,162 HKD, corresponding to a 24x price-to-earnings ratio for 2026.

Citigroup believes that investors are focusing on future sales momentum after fluctuations in gold prices and are noting discussions regarding financing possibilities, which have put pressure on recent stock prices. Citigroup’s scenario analysis supports its earnings forecasts that are above market consensus, with sufficient inventory to meet short-term sales. Lao Pu Gold is Citigroup’s top pick in the Chinese jewelry sector.

Considering the recent significant drop in gold prices, the bank expects demand from price-sensitive customers to be pressured, estimating that such customers account for about 40% of first-quarter revenue this year, or 7 billion RMB. Under a pessimistic scenario assumption, even if this portion of revenue is completely lost, Lao Pu’s revenue this year could still reach approximately 37 billion RMB, indicating low downside risk.

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Editor: Shi Lijun

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