Core Viewpoint - Morgan Stanley has adjusted its profit forecasts for Lao Pu Gold (06181) for 2025-2027 and extended the target price to June 2026, setting a new target price of HKD 1296, which corresponds to a 24 times projected P/E ratio for 2027. The firm expects Lao Pu Gold's momentum to continue, driven by brand value, product innovation, and a strong value proposition, particularly in a market that values national pride. The investment rating remains "Overweight" [1]. Group 1 - The report indicates clear signs of brand asset enhancement, as consumers are willing to queue even after price increases or promotions have ended [1]. - Retail sales maintained strong growth momentum during August-September, excluding the time lag from price adjustments in 2024/25 [1]. - New products are being launched for holiday arrangements, with plans to introduce new lacquerware within the year, applying gold-thread craftsmanship to new products [1]. Group 2 - In 2026, the focus in mainland China will be on optimizing distribution channels, including optimizing store locations and expanding store sizes, with a target area exceeding 150 square meters, while most current stores are under 100 square meters [1]. - There is still ample room for store expansion, as there are 50 eligible shopping centers in Hong Kong, and as of the first half of 2025, Lao Pu Gold has entered 29 of them [2]. - The performance of the newly opened 400 square meter boutique at the Hong Kong International Financial Centre aligns with observations from the firm, as queue times have typically been 1-2 hours since opening, further demonstrating the enhancement of Lao Pu Gold's brand value [2].

Core Viewpoint - Morgan Stanley has adjusted the profit forecast for Lao Pu Gold (06181) for 2025-2027 and extended the target price to June 2026, setting a new target price of HKD 1296, which corresponds to a 24x P/E ratio based on the 2027 forecast. The firm maintains an "Overweight" investment rating, highlighting Lao Pu Gold as a preferred stock in the Chinese consumer goods sector. Group 1 - The brand value and product innovation are driving Lao Pu Gold's momentum, particularly in a market that values national pride [1] - Strong retail sales growth was observed during August-September, excluding the timing differences of price adjustments for 2024/25 [1] - New products are being launched for holiday arrangements, with plans to introduce new lacquerware within the year, applying gold-thread craftsmanship to new products [1] Group 2 - There is ample room for store expansion, with 50 eligible shopping centers in Hong Kong, of which Lao Pu Gold has entered 29 as of mid-2025 [2] - The performance of the newly opened 400 square meter boutique at Hong Kong International Financial Centre aligns with observations, with queue times typically ranging from 1-2 hours since opening, further demonstrating the enhancement of Lao Pu Gold's brand value [2]