Since its Hong Kong IPO in June 2024 at HK$40.50, this Beijing-based luxury jeweler has delivered one of the most spectacular stock rallies.
Its shares are up over 1,800% – turning a HK$40,000 investment into more than HK$750,000 in just over a year.
At HK$131 billion market cap, this is Laopu Gold (SEHK: 6181) – a Chinese heritage jewelry brand that’s called the “Hermès of gold”.
So… how did a gold jewelry giant outperform even tech stocks?
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This is a different kind of gold
The story starts with Laopu’s unique positioning in China’s luxury market. Firstly, its business model stands apart from its major peers like:
- Chow Tai Fook (1929.HK): A market leader with extensive retail network
- Luk Fook (590.HK): Traditional gold retailer focused on mass market
- Chow Sang Sang (116.HK): Heritage brand but struggling with growth
- Lao Feng Xiang (600612.SS): Mainland competitor with commodity-style pricing
Now, Laopu Gold isn’t a mass market jeweler. Unlike traditional gold retailers that sell jewelry by weight plus processing fees, Laopu Gold operates like a luxury fashion house.
It sets fixed prices for its “heritage gold” pieces. And this fixed price is detached from daily gold price fluctuations.
You see, this isn’t our grandmother’s gold jewelry. Laopu Gold specializes in what it calls “ancient technique gold”.
This uses traditional Chinese craftsmanship methods that date back centuries to create pieces inspired by imperial designs and Buddhist motifs – distinguishing itself from its peers. Its results speak volumes.
In 2024, Laopu Gold achieved gross margins of 41.2% – nearly doubling Chow Tai Fook’s 24% gross margins and miles ahead of Lao Feng Xiang’s mere 9% gross margins.
What’s more, Laopu Gold’s average store generates over CNY300 million in revenue each year, making it the highest-performing jewelry brand per location in China.
What makes Laopu Gold different from its peers?
Traditional jewelry giants like Chow Tai Fook that operate over 6,500 outlets. However, Laopu Gold takes the opposite approach.
It has just 36 boutiques, all located in premium malls alongside brands like Louis Vuitton and Cartier. In a way, Laopu Gold deliberately brands itself on a scarcity strategy.
And it’s working.
During Chinese New Year 2024, customers queued up to eight hours outside Laopu Gold’s stores. It’s the same exclusivity playbook that makes Hermès’ Birkin bags so coveted.
The luxury gold giant raises prices 2-3x per year regardless of gold price movements. Plus, it doesn’t offer discounts even when gold prices fall. This luxury positioning allows it to charge over CNY1,200 per gram.
Meanwhile, its competitors sell similar weight gold for ~CNY900 per gram. Again, pure luxury branding strategy.
Laopu Gold is a massive growth story
Laopu Gold’s financial numbers are impressive. In 2014, its revenues exploded 168% to CNY8.5 billion in 2024.
Meanwhile, net profits surged 254% to CNY1.5 billion. For 1H2025, management forecasts another 241-255% revenue growth, with a net profit growth of 279-288%. This is in line with analysts’ projections.
What’s more, its “same-store” sales grew over 120% in 2024. Today, it’s targeting CNY1 billion in average store revenue. This is expected to triple its current performance.
With only 36 stores generating these financial results, the scalability potential is enormous.
To put things in perspective, Laopu Gold’s return on equity (ROE) has been staggering so far, reaching ~54% in 2024. This is also more than double its peers within the same sector.
That’s why it commands a far higher valuation.
What’s driving Laopu’s aggressive expansion strategy?
Laopu Gold is going global. Its first overseas store opened at Singapore’s Marina Bay Sands in June 2025, positioned alongside global luxury brands.
Early reports suggest 1-2 hour wait times during peak periods, indicating strong initial demand.
Its global expansion makes sense. Singapore’s mix of Chinese consumers and tourists makes it an ideal first step. If successful, it could unlock massive valuation premiums as investors price in global luxury brand potential.
Management also has ambitious expansion plans:
- Tokyo store opening in 2026, targeting cultural exchange with non-Chinese consumers
- Four Southeast Asian stores planned by 2026
- Potential expansion into other international markets
- Domestic focus on Tier 1 and Tier 2 cities with high disposable income
Small payout today, future big dividend growth?
Laopu Gold immediately paid its first dividends in 2024: HK$6.88 per share (yield is ~1%). At first glance, this is disappointing.
Compared to other traditional jewelers like Chow Tai Fook, Laopu Gold’s payout is meager.
But take a step back, this is Laopu Gold’s first year post its IPO. Though yield was low even compared to other consumer stocks, it’s a sign management is committed to reward shareholders in the future.
Think about this: a company’s management and its board of directors voting for a dividend pay out signals confidence in the company’s future profits.
Otherwise, a dividend cut would impact share price performance. In this case, Laopu Gold just went IPO.
Would Laopu Gold eventually become a dividend compound?
So far, the company’s payout ratio and dividend policy aren’t clearly established. But its potential for future growth is enormous if it continues to maintain its high profitability and if expansion plans deliver.
What are the major risks facing Laopu Gold?
Despite its impressive performance, I want to flag some concerns.
First, Laopu Gold’s strong shares performance has led to a high valuations of 32x forward PE, which trades at a significant premium to peers.
As the lockup of IPO investors expired in June this year, ~121 million shares has become tradable, creating selling pressure.
In fact, shares were already down 29% from its July 2025 peak of HK$1,108 per share. This suggests profit-taking by early investors.
Next, gold price sensitivity: jewellers product pricing Gold prices have been on an uptrend due to a weaker US dollar currency and inflation.
Though Laopu Gold’s management said they’ve detached their products from gold price volatility through fixed pricing, this remains untested when gold prices sell off.
No matter what, its jewelry still contains significant gold content. A sharp gold sell off could test consumer’s perception of value.
I won’t be surprised if competition is intensifying. The thing is, what worked well for Laopu Gold can be replicated too.
Established players like Chow Tai Fook are already copying Laopu Gold’s “heritage gold” concept. The key thing here is brand strength and exclusivity will be critical.
My final thoughts
Laopu Gold has built something remarkable. This is a true Chinese luxury brand that commands pricing power and cultural roots. So far, its execution has been brilliant, with a sound global ambition.
Its growth story comes with a hefty price tag at a 32x forward P/E ratio, which reflects Mr. Market’s optimism for the stock.
This means, if Laopu Gold experienced a marginal drop in its earnings, it could shake up its share price performance.
Having said that, if you believe Chinese luxury brands can compete globally and that Laopu Gold can maintain its exclusivity while scaling internationally, it’s worth looking at its growth story.
Its Singapore store success so far and planned Tokyo expansion could validate its global expansion.
However, for dividend investors, shares of Laopu Gold’s yield is still very low. But if the company’s global growth story kicks off, it could see a massive dividend growth in the future.
