JP Morgan: Increases target price of LAOPU GOLD (06181) to HKD 1296 by June next year, reiterates "Overweight" rating.

J.P. Morgan issued a research report stating that it has made slight adjustments to the profit forecast for LAOPU GOLD (06181) for the years 2025-2027, and has extended the target price until June 2026. The new target price based on discounted cash flow method is HK$1296, equivalent to 24 times the forecasted P/E ratio for 2027. The bank anticipates that under the drive of brand value, product innovation, and strong value proposition, the momentum of LAOPU GOLD will continue, especially in a market that values national pride. The investment rating of "hold" is reiterated. LAOPU GOLD is one of the bank's preferred stocks in the Chinese consumer goods industry. J.P. Morgan hosted a luxury and gold jewelry tour in China on September 24-25 and October 8, engaging with the management, store managers, and experts of LAOPU GOLD. Key points include: (1) Clear signs of brand asset enhancement - consumers are willing to queue even after the end of price increases or promotions; (2) Strong retail sales growth momentum during August and September (excluding time differences due to price adjustments in 2024/25); (3) New products launched for holiday arrangements, including plans to introduce new lacquerware within the year (e.g. applying the gold-bodied process to new products); in 2026, the focus in mainland China will be on optimizing channels, including optimizing store locations and expanding store areas (target area exceeds 150 square meters, while currently most are less than 100 square meters) to further enhance brand assets. However, there is still ample room for store expansion, as Hong Kong has 50 eligible shopping centers, and as of the first half of 2025, LAOPU GOLD has entered 29 of them. The performance of the newly opened 400 square meter boutique store at the Hong Kong International Financial Center aligns with the bank's observations, with waiting times typically ranging from 1-2 hours since opening, once again proving the increase in brand value of LAOPU GOLD.