Recent Hong Kong-listed new consumer companies have begun disclosing their interim results and holding earnings conferences. POP MART and its IP retail sector undoubtedly represent the strongest and most certain growth direction in new consumption. However, other new consumer companies such as LAOPU GOLD have shown performance that missed expectations to some degree. The "Hong Kong Three Sisters" are following different scripts.

On August 20, POP MART held its earnings conference, where the launch of Mini Labubu not only unlocked PPMT's social attributes but also formed an investment consensus among investors that "growth sustainability for the next 1-2 years is becoming increasingly clear." In contrast, despite LAOPU GOLD delivering impressive results with 25H1 sales of 14.18 billion yuan (up 249% YoY), revenue of 12.35 billion yuan (up 251% YoY), net profit attributable to shareholders of 2.27 billion yuan (up 286% YoY), and Non-GAAP net profit of 2.35 billion yuan (up 291% YoY), it failed to ignite market sentiment and instead caused market cooling.

In terms of stock performance, since the lock-up expiry, LAOPU GOLD has experienced negative catalysts including downward guidance revisions, cornerstone investor sell-offs, and placement rumors. Around the interim results announcement, the stock price fell to HK$700 per share, indicating the market clearly does not recognize the 290% growth rate. The market is still waiting for LAOPU GOLD's "POP MART moment."

LAOPU GOLD Chairman Xu Gaoming once said at an earnings conference: LAOPU GOLD has decoupled from correlation with international gold prices and no longer depends on premiums generated from gold's intrinsic material value. This brand positioning that goes against market logic has created the current LAOPU GOLD, but also brings concerns.

**01 Customer Base Expansion Challenges**

Part of LAOPU GOLD's brand strength comes from Golden Treasure and Wenhouse No.1, which primarily sold Buddhist eight-treasure gold and jade items to high-net-worth customers with transaction values exceeding 300,000 yuan. Starting in 2023, as gold prices rose rapidly, "fixed-price" gold pricing adjustments lagged relatively, and LAOPU GOLD, selling only "fixed-price" products, benefited from industry acceleration.

Customer base expansion enabled LAOPU's performance to double but also created contradictions in core customer structure stratification. Historically accumulated high-net-worth customers almost never came for "gold investment," but new customers drawn in by jewelry expansion include those coming for "gold" rather than "LAOPU." The real question is: can these customers be retained long-term?

Specifically:

**1) Short-term perspective:** LAOPU achieved 14.18 billion yuan revenue in H1 (up 249% YoY), with gold price increases undoubtedly contributing significantly to sales volume. If gold prices plateau in H2, this "buying on rises" demand will likely naturally decline, and sales volume will contract accordingly. Once sales fluctuate with gold prices, it means the company has obvious cyclical attributes, and cyclical stocks are valued lower than consumer stocks.

LAOPU's high base in January-February came from concentrated cross-city customer flows. The queuing crowds in H2 indeed haven't replicated early-year enthusiasm, indicating that H1's expansion factors haven't continued. For the company, this explosive growth has certain randomness, and whether expansion occurs is difficult to "artificially control."

What the company can proactively do is continue tilting product structure toward premium pieces priced between 100,000-300,000 yuan, converting new large-scale members into VIC core users as much as possible. Simultaneously upgrading store areas and services, combined with 10-15% modest price increases, to offset demand decline after gold price stabilization.

i) LAOPU mall store locations and formats still have optimization space, with many stores still located on B1 levels or higher floors, creating suboptimal consumer experiences like island stores and mobile stores, essentially transitional store formats from earlier periods.

ii) According to LAOPU's three-year expansion plan, the company plans to open 15 new stores over three years (5 already opened in 2025, with 2 more under construction), with 10 in mainland China (including Hong Kong and Macau) and 5 in Southeast Asian countries like Singapore and Japan. New stores will still bring considerable incremental growth throughout the year, sufficient to support overall performance growth at the 500 million yuan level, so even if same-store sales decline slightly, it won't break the business logic.

**2) Long-term perspective:** The best business model for luxury goods is stable cash flow growth under zero capex, with growth core being: significantly improving customer spending levels by deeply mining existing member value (rather than expanding stores), using this as the core engine for same-store growth.

LAOPU GOLD membership will likely exceed 1 million by end of 2025. For a mid-to-high-end brand operating only in first-tier cities, a 1 million regular member base is approaching the ceiling. For LAOPU GOLD's next phase, it needs strong average transaction value growth to prove itself.

Customer groups that expanded in 2024 differ from those in 2025. Last year's new members had high overlap with luxury jewelry brands like Cartier and Van Cleef & Arpels, while this year's new members come more from non-luxury users (one group being traditional gold product consumers, another being people who previously didn't pay attention to or purchase gold).

For LAOPU following a "luxury business model," the problems brought by demographic expansion are obvious - declining average transaction values. For LAOPU, this is a challenge with both risks and opportunities.

i) In 2023, LAOPU GOLD's member repeat purchase rate was below 2, meaning new users haven't completed sufficient repurchases. Especially as the brand welcomed significant member base expansion over the past two years while the membership system itself is still in early stages, there's considerable room to convert "large numbers" into "high frequency" through product stratification, privilege upgrades, and scenario operations.

ii) Simultaneously, LAOPU's product structure includes lower-ticket gold jewelry (male:female ≈ 3:7) and high-end ornamental crafts and gold items (male:female ≈ 7:3). LAOPU faces generational contradictions in the customer groups it wants to target for average transaction value improvement.

iii) The company has high growth expectations and high-net-worth customer stickiness expectations, and has been adjusting strategies since 2025 to strengthen brand endorsement. For example, LAOPU's new store opening strategy has shifted from seeking high-traffic ground floor locations to multi-floor, multi-store concepts. LAOPU has also introduced more VIC exclusive services - Singapore's popular new products are offered through member center targeted invitations to high-net-worth customers via appointment-only limited releases.

Membership operation system integration requires time validation. Business model success will definitely be reflected in financial data, which is the underlying logic for why LAOPU's gross margin changes cause stock price fluctuations.

**02 LAOPU's "Cash Shortage"**

FY2024 operating cash flow was an outflow of 1.23 billion yuan, and 25H1 operating cash flow was an outflow of 2.215 billion yuan. Although LAOPU achieved dual growth in revenue and profit, it's obviously not a cash-abundant company.

According to company announcements, LAOPU GOLD added 1.81 billion yuan in bank loans, plus 2.698 billion HKD net proceeds from new share issuance. The company invested almost all operating proceeds and financing into inventory and store expansion. LAOPU doesn't employ inventory hedging measures.

For gold jewelry companies like Chow Tai Fook and Chow Sang Sang, they generally use financial derivatives to lock in gold prices and hedge precious metal price risks. Choosing hedging means unable to capture full upside benefits during gold bull cycles, but also avoiding partial downside losses during bear cycles. For luxury groups like Hermès and Cartier, they can raise prices to transfer risks.

For LAOPU, whether it has truly "substantially decoupled from correlation with international gold prices" as Chairman Xu claimed remains questionable. From current actions, LAOPU is very confident in its constructed blueprint. LAOPU's leveraged development brings more market imagination but also requires bearing more performance pressure. LAOPU GOLD still needs to prove itself.