Laopu Gold (6181.HK)_ APAC Consumer & Leisure Corp Day_ Solid momentum post price hike; look for GPM improvement in 2026

Summary of Laopu Gold (6181.HK) Conference Call Company Overview - Company: Laopu Gold (6181.HK) - Industry: Consumer & Leisure, specifically in the luxury goods sector Key Takeaways Sales Performance - Post Price Hike Sales: Management reported solid sales momentum following a price increase in October 2025, with no observed sales pressure. Long queues were noted in multiple cities during holiday seasons, indicating strong demand [1][2] - New Year Sales Growth: During the New Year period (January 1-5, 2026), company-level sales experienced triple-digit growth, with old store sales showing high double-digit year-over-year growth [2] Outlook for Chinese New Year (CNY) Sales - Positive CNY Sales Outlook: Management is optimistic about CNY sales, attributing this to increased brand awareness, channel expansion, and improved operational readiness compared to the previous year [3] Earnings Drivers for 2026 - GPM Improvement: Management anticipates that Gross Profit Margin (GPM) could reach 40% post-October price hike, factoring in VAT and promotions. The target is to maintain GPM above 40% into 2026 [7][9] - Store Network Expansion: The company opened 10 new stores and upgraded 8 stores in 2025, contributing to customer base expansion and increased consumption [9] - Competitive Advantage: Laopu's comprehensive capabilities and leading market position are seen as key competitive edges [9] Brand Positioning and Product Strategy - Brand Position Enhancement: Focus on upgrading store locations in the ML China market is planned for 2026. The brand is also making steady progress in VIC (Very Important Customer) management [4][12] - New Product Launches: The company continues to introduce new products during major holidays and events, with new products contributing less than 10% to sales annually since 2023. However, management sees potential in new products launched in 2025 to enhance brand competitiveness [11] Inventory and Operational Preparedness - Inventory Management: Management indicated that they are well-prepared for the CNY peak season following a share placement in October, with no further share placement plans currently [13] Risks and Price Target - Price Target: The 12-month price target is set at HK$1,088, representing a 74.2% upside from the current price of HK$624.50. Key risks include potential gold price declines, regulatory challenges in luxury consumption, and regional concentration [14][16] Additional Insights - Promotion Strategy: The brand's discount strategy aligns with shopping mall promotion calendars, which management believes helps expand sales without damaging brand equity [8] - Channel Strategy: While online sales are expected to increase, offline sales remain the priority, with no significant investment planned for online channels [10] This summary encapsulates the key points discussed during the conference call, highlighting Laopu Gold's current performance, future outlook, and strategic initiatives within the luxury goods sector.