PRECIOUS METALS | Morgan Stanley: Laopu Gold's Strong Q1 Performance and Earnings Outlook

Morgan Stanley has released a report highlighting Laopu Gold's robust performance in the first quarter of this year. According to Jin10, the company is expected to see its earnings per share double year-on-year in the first half. The stock is currently trading at 13 times its projected 2026 price-to-earnings ratio, presenting an attractive valuation. While the management has not commented on capital-raising needs, they have acknowledged tight cash flow. The report notes that the recent significant decline in gold prices introduces uncertainty in market demand, yet it also serves as a test of the brand's strength to support ongoing revaluation. Morgan Stanley has raised its revenue and net profit forecasts for Laopu Gold by 13% to 14%, predicting annual increases of 55% and 66% respectively by 2026, reaching 42 billion RMB and 8 billion RMB. Despite maintaining the group's target price at 1,010 HKD, Morgan Stanley has adjusted the target price-to-earnings ratio from 23 times to 20 times, citing gold price volatility and unclear demand as reasons. The rating remains at 'overweight.'