Laopu Gold’s Searing Rally Cools as Sales Slip, Bullion Falls

Why It Matters

The decline tests Laopu’s ability to sustain luxury‑level mark‑ups when bullion prices fall, a key risk for investors and the broader premium jewelry sector in China.

Key Takeaways

• Laopu's physical store sales fell 10%‑15% YoY Mar‑May.
• Tmall sales dropped 71% in April, 66% in May.
• Spot gold down >20% from Jan peak, pressuring premiums.
• Shares lost >50% since July 2025, erasing $13 bn market value.
• Citigroup cut 2026 price target to HK$700 (~$90) per share.

Pulse Analysis

Laopu’s meteoric rise was built on a fixed‑price strategy that emphasized design and brand cachet rather than the weight‑based pricing common among Chinese jewelers. By charging roughly a 55% premium to traditional gold retailers, the company tripled revenue last year, buoyed by a bull market in bullion that lifted consumer confidence in high‑margin luxury pieces. However, the recent 20%+ retreat in spot gold has exposed the fragility of this model, as price‑sensitive shoppers gravitate toward weight‑based offerings that track metal prices more closely.

The contrast with industry heavyweight Chow Tai Fook underscores a broader market shift. While Chow Tai Fook continues to grow on weight‑based sales—accounting for 64% of its six‑month revenue—Laopu’s fixed‑price collections have struggled to maintain momentum amid falling gold prices. The divergence highlights a consumer segmentation where affluent buyers still seek premium designs, but a larger base prefers the perceived safety of weight‑linked value. Laopu’s aggressive rollout of eight new collections this year and store upgrades aim to reinforce brand loyalty, yet the underlying demand elasticity remains a concern.

Investor sentiment has turned sharply negative, reflected in a more than 50% share price decline and a $13 billion market‑value wipe‑out since its July 2025 peak. Citigroup’s near‑40% price‑target cut to HK$700 (≈$90) signals skepticism about near‑term earnings, although the bank notes a growing cohort of loyal customers less tied to bullion swings. The path forward for Laopu hinges on whether its brand equity can decouple sales from gold price cycles, a test that will shape the premium jewelry landscape in China for years to come.