Bank of America Securities: Cut the target price for Old Town Gold (06181.HK) to HKD 350, with second-quarter earnings below expectations.

According to information obtained by Zhitong Fintech APP, Bank of America Securities has released a research report stating that based on the earnings forecast for Lao Pu Gold (06181.HK) in the first half of the year, both revenue and profit in the second quarter have significantly slowed year-on-year and quarter-on-quarter. Calculating with the median forecast, revenue in the second quarter fell 23% year-on-year, while net profit remained flat year-on-year, with revenue and profit down 82% and 83% quarter-on-quarter, respectively. The bank believes that part of the revenue weakness has been offset by better profit margins, as the decline in gold prices is expected to boost gross margins to over 40%. Since the second quarter is a low season for gold and jewelry demand, coupled with the company possibly launching more promotional activities and new products in the second half of the year, the bank currently expects improvements in revenue and profit in the third and fourth quarters. It also indicated that if gold prices stabilize, some pent-up demand may be released. Bank of America Securities has lowered its earnings estimates for Lao Pu Gold for 2026 and 2027 by 15% and 20%, respectively, to 6.7 billion and 7.3 billion RMB, and has reduced the target price from 774 HKD to 350 HKD, reaffirming a "neutral" rating.