LaoPu Gold stock surges as Chinese New Year gold demand rises

What happened LaoPu Gold’s stock hit a record high yesterday, surging 9.96% to close at HK$296 ($37.94) on the Hong Kong Stock Exchange. It briefly pushed the company's market value above HK$50 billion ($6.4 billion), though some of those gains were pared back today, with the stock ending 3.55% lower. Since listing in Hong Kong in June last year, LaoPu's stock price has skyrocketed 347.13%. The luxury jeweler reported robust Chinese New Year holiday sales, with some first-tier city stores seeing over 30% YoY growth and queues forming outside outlets. Its Buddhism-inspired heritage gold collections and promotional activities drove both in-store and online sales, with several products selling out immediately after launch. This performance stands in stark contrast to struggles faced by larger competitors, cementing LaoPu’s position as a rising star in China’s luxury jewelry market. The Jing Take The strong showing by LaoPu Gold signals broader momentum in China’s gold market ahead of the Lunar New Year, despite record-high prices hovering around $2,650 per ounce. Traditional jewelers like Chow Tai Fook and Luk Fook have faced headwinds, with the former closing 180 mainland stores in the first half of 2024 amid a 26.4% YoY same-store sales decline. However, LaoPu’s luxury positioning and fixed-price strategy — similar to global brands like Cartier and Tiffany — have helped it buck the trend. While traditional gold jewelry consumption fell 26.7% YoY in mainland China during the first half of 2024, according to the China Gold Association, premium brands are showing resilience. The outlook for the sector is mixed. Physical gold demand is receiving support from China’s central bank, which added 330,000 troy ounces to its reserves in December, marking its second consecutive month of purchases. Analysts at Goldman Sachs project that gold prices could reach $3,000 per ounce by Q2 2026, driven by central bank demand and geopolitical uncertainty, including the fallout of US President-elect Donald Trump’s return to office. For retailers, the upcoming Spring Festival could provide a boost. Merchants in major cities like Zhengzhou and Shenzhen report strong interest in snake-themed jewelry for the Lunar New Year, with some stores selling 2kg to 3kg daily, despite prices around 700 RMB ($95) per gram. However, the sector faces challenges from China’s property crisis, deflation, and high youth unemployment. LaoPu’s success suggests a shifting market dynamic, where premium positioning and cultural resonance may trump traditional weight-based pricing. With plans to add 15 new stores across Asia in the next three years, the company’s strategy of quality over quantity appears to be paying off, even as larger rivals struggle to maintain growth in an increasingly complex market. The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

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Premium pricing powers LaoPu Gold past peers

How Bottega Veneta weaved China’s forever it bag