Key Takeaways
Citigroup reiterated its "Buy" rating on Laopu Gold (06181.HK), placing the jeweler on a 30-day upside watch with a HKD 1,162 price target.
The bank's positive outlook is driven by the 618 online promotion period from May 15 to June 20, which it expects to be a significant positive driver for sales, a Citi research report said.
The report noted that investor concerns about a slowdown in same-store sales growth have already been factored into the current valuation. Citi explained that volatile sales at the Beijing SKP mall store were due to price-sensitive surrogate shoppers, a factor that exaggerates both downturns and uptrends.
The HKD 1,162 price target implies a 99% upside from Laopu's May 14 closing price of approximately HKD 583. The report suggests the stock has room for a significant re-rating given the limited downside risk to profitability.
The report positions the 618 festival as a key test for consumer demand. Investors will be watching for sales data from the event to confirm if a re-rating is justified, with the results likely influencing the stock's direction through the end of June.
This article is for informational purposes only and does not constitute investment advice.
