The stock price of Laopu Gold fell after the announcement of the profit, and has retreated by 30% from its high.

On July 27, according to the data of Metropolis Trading, the 2025 Hong Kong stock market "king of new consumption" gold store, the old store, posted a happy profit. It is expected that the net profit in the first half of 2025 will reach 2.23 billion to 2.28 billion yuan, a year-on-year growth rate of 279% to 288%. Tax-included revenue exceeded 13.8 billion to 14.3 billion yuan, an increase of more than 240%.However, the capital market reacted coldly: the stock price fell 3.07% the next day to HK$741, and the market value shrank to HK$127.9 billion, a retreat of more than 30% from the historical high of HK$1108 on July 9.

2025 Hong Kong stock new consumption track is running wild

Laopu Gold's surge in the first half of 2025 is the epitome of the capital carnival of Hong Kong stocks 'new consumption track.

According to Hang Seng Consumer Index data, the cumulative increase of this sector during the year reached 18%, far exceeding the performance of the Hang Seng Index during the same period. Laopu Gold became the strongest engine with an increase of 214.5% during the year. Together with Bubble Mart and Mixue Group, it is called the "Three Sisters of New Consumption in Hong Kong stocks". The total market value of the three giants exceeded HK$720 billion, accounting for nearly 40% of the weight of the Hong Kong stock consumer sector.

Generation Z consumers are willing to pay a premium for cultural narratives and personalized experiences, and the old-fashioned "intangible cultural heritage craftsmanship + luxury goods operation" model is just stepping on the pulse of this era.The peak single-day passenger flow of its SKP stores in Beijing exceeded 3000 people. From February to March, GMV surged by nearly 300% year-on-year. It not only boosted the overall passenger flow of the mall, but also drove consumer stocks such as Shenzhou International and Tongcheng Travel to rise by more than 4%. Hang Seng Consumer ETF rebounded nearly 16% from April lows.

The enthusiasm of the capital market is more reflected in the drastic changes in capital flows.Southbound Capital purchased net Hong Kong stocks of HK$725.9 billion during the year, a record high for the same period. Among them, the optional consumer sector gained 28% of its holdings, ranking first among all industries.The siphon effect of Laopu Gold is particularly significant: on June 30, its share price surged by 18% in a single day to exceed HK$1000, directly triggering new consumer stocks such as Broco and Guming to rise by more than 6%, driving the market value of the sector to increase by more than 20 billion in a single day. Hong Kong dollars.

Pacific Securities said that the Hong Kong stock consumption track has shifted from "cost-effective competition" to "emotional value realization". Efficient channels such as discount stores and member supermarkets have become a new formula for capital betting, with quality-to-price ratio, health, and cultural identity.

Dark side of high growth

Behind this seemingly eye-catching report card, a game about valuation bubbles, business models and market trust is brewing.InvalidParameterValue

The explosion of Laopu Gold's performance was due to the dual drive of brand premium and channel expansion.

In 2024, its revenue surged by 167.5% year-on-year, and its net profit increased by 253.9%, far exceeding the negative growth performance of traditional giants such as Chow Tai Fook and Lao Fengxiang.

However, structural risks lurk under the bright data-the inventory size has soared from 1.268 billion yuan in 2023 to 4.088 billion yuan in 2024, a year-on-year increase of 222.4%; accounts receivable have expanded from 376 million yuan to 801 million yuan during the same period, and superimposed interest-bearing loans have increased sharply from 130 million yuan to 1.37 billion yuan, and the actual interest rate has climbed to 5%.

What is even more serious is the cash flow dilemma: the cash flow from operating activities in the first half of 2024 was only 67 million yuan, less than 12% of the net profit of 588 million yuan for the same period.This inversion of "high profits, low cash" exposes the overdraft of the capital chain by its growth model driven by credit sales and hoarding.

There are three reasons for upside down.

First, the expansion of Laopu gold is highly dependent on inventory hoarding.At the end of 2024, the inventory scale soared to 4.088 billion yuan, far exceeding that of Chow Tai Fook. However, every new store needs to be equipped with 50 million yuan in distribution funds. According to the plan of 100 stores, a 5 billion yuan inventory fund pool needs to be accumulated. The combined turnover efficiency deteriorates, resulting in a serious shortage of cash flow.

Second, Laopu Gold's direct sales model should have "paid off both money and goods", but Laopu Gold is actually caught in the accounting period constraints of shopping mall channels.Due to the adoption of a "monthly settlement system" with high-end shopping malls such as SKP, the amount of accounts receivable has expanded and the turnover rate has declined.For example, in 2023, the company's top five customers accounted for 38.07% of revenue, of which SKP's single store sales were 153 million yuan, but the payment back cycle was as long as 45 days, forming a paradox of "higher sales, tighter cash flow".

Third, although Laopu's "one-stop price" model supports gross profit margins, it sacrifices liquidity.The average price of its products reaches 80,000 yuan/piece, and the consumer repurchase cycle is 3-5 years, resulting in an average monthly sales volume of only 120-150 pieces in a single store, which is far from enough to support the display inventory of 380 kilograms/store.In order to maintain a high premium, the company is forced to invest huge sales expenses, but every 1 percentage point increase in sales expense ratio will erode the net profit margin by 0.6-0.8 percentage points, resulting in a continued decline in cash conversion efficiency.

Institutional attitudes are polarized

Regarding the current old-shop gold, investors 'attitudes are polarized.

Nomura, Puyin International and others are bullish, setting target prices at HK$1148 and HK$1198, believing that same-store growth and store expansion (9 new stores planned to exceed expectations in 2025) will absorb high valuations; However, UBS warned that there is a "bubble" in the expected net profit of 5.5 billion yuan for the whole year. If the rise in gold prices slows down, gross profit margins will be under pressure.

It is worth noting that the current P/E ratio (TTM) of Laopu gold is as high as 80 times, far exceeding the industry average (22 times for Chow Tai Fook and 8 times for Lao Fengxiang), and even exceeding the combined market value of the three major jewellers in Hong Kong stocks.

The paradox of Laopu gold is that its growth is highly bound to the gold bull market, but it cannot escape the strangulation of the cyclical law.From January to April 2025, the price of gold rose by 34%, and the company only raised the price by 10% in February, resulting in a decline in the gross profit margin of pure gold products in the second quarter.To maintain profits, it is forced to adopt a more aggressive price increase strategy, but this will further weaken value for money and test consumers 'willingness to pay for the "brand story."

The more far-reaching risk is that the consumer and investment attributes of gold jewelry are being separated: when gold prices fluctuate at high levels, consumers may turn to pure investment products such as gold bars or wait for promotional discounts, causing store growth to slow down.However, whether attempts to expand the international market (such as the Sands Store in Singapore) can open up new volumes still need to verify the acceptance of its cultural premium in overseas markets.