Laopu Gold (6181.HK): 2H26F sales could face a drag from multiple fronts

Laopu Gold’s tepid sales momentum continued into 3Q26F with no meaningful improvement from 2Q26 (2Q26 revenue declined by c.30% y-y), based on our estimate; the main headwinds for Laopu's sustained sales weakness include: (1) the meaningful correction in gold prices in 3Q26, especially in June, July and September, with spot gold price testing levels close to USD4k/ounce (gold prices in October further reached new lows of 2026); the significant gold price correction has reduced consumers’ demand for Laopu, especially in the entry-level, non-core consumer cluster, in our view; (2) the negative wealth effect from the sharp correction in China’s A-share market since July 2026, especially the correction of tech-related stocks; (3) the implementation of more stringent taxation on China’s wealthy, which has impacted Laopu’s target consumers’ spending willingness/capacity as well, in our view. All of these headwinds have emerged from the macro side; Laopu, in our view, still holds its unique a