With the release of the latest interim results, market concerns over whether gold price volatility has dragged down sales at LAOPU GOLD now have an answer: the worst-case scenario has not materialized, though actual performance still landed near the lower end of the previously guided range.

On August 25, LAOPU GOLD published its first-half 2026 results. The company achieved sales performance of RMB 22.779 billion and revenue of RMB 19.808 billion, up 60.6% and 60.3% year-on-year respectively. Adjusted net profit reached RMB 4.317 billion, a year-on-year increase of 83.6%.

The market had previously worried that falling gold prices would widen the price gap between LAOPU GOLD and traditional gold jewelry, suppressing sales, while slower sales could trigger operating deleverage under fixed costs and further erode profit margins.

However, based on the official interim report, the worst has not materialized. In the first half, LAOPU GOLD's gross margin rose to 41.3% from 38.1% in the same period last year, while net margin climbed to 21.5% from 18.4%.

The company attributed the margin improvement mainly to lower-cost inventory, product price adjustments, and economies of scale: inventory stocked ahead of time at the end of 2025 carried relatively lower costs, a round of product price hikes was completed at the end of February, and continued revenue growth helped dilute certain fixed expenses.

As of the end of June, the company's inventory had increased to RMB 19.018 billion from RMB 16.044 billion at the end of 2025, a rise of approximately RMB 2.973 billion. Among this, finished goods grew by RMB 5.556 billion to RMB 16.072 billion, while raw materials and semi-finished products declined. Inventory turnover days extended from 216 days to 271 days.

For LAOPU GOLD, stockpiling is part of normal operating investment. The company operates a fully direct-retail model, where store displays and gold products require substantial inventory, and processing cycles are longer than for standard standardized gold jewelry.

At the reporting period end, LAOPU GOLD's inventory write-down provision stood at just RMB 9.19 million, showing no obvious impairment pressure.

Better than expected, sales collections and profit growth have already outpaced the cash consumed by new stockpiling, with procurement investment narrowing relative to operating scale.

In the first half, the company recorded net operating cash inflow of RMB 2.008 billion, reversing three consecutive years of net outflows from 2023 to 2025.

The improvement in operating cash flow may also be linked to a shift in the company's store expansion focus this year. As of the end of June, the company operated 45 self-owned stores, unchanged from the end of 2025, covering 35 premium shopping centers across 16 cities.

For 2026, the company's priority is not large-scale store count increases but optimizing the location and size of 10 to 12 existing stores, with six already completed as of the results announcement date.

With limited net new store openings domestically, the funding demand for initial stock replenishment at new locations in the second half is likely to decline compared with 2025. Inventory management may also shift from "stockpiling for expansion" toward improving sales and turnover efficiency at existing stores.

This also means LAOPU GOLD's next phase of growth will need to be increasingly carried by existing stores. Whether current shopping centers can further unlock output becomes more critical.

For now, the foundation for this growth remains solid.

According to Frost & Sullivan data, in the first half of 2026, LAOPU GOLD achieved average sales performance exceeding RMB 500 million across the 35 shopping malls it entered, ranking first globally among luxury groups in both per-store sales and sales per square meter.

Overseas markets are also contributing incremental growth. In the first half, the company's overseas revenue reached RMB 3.317 billion, up 107.8% year-on-year, with the revenue share rising from 12.9% to 16.7%. During the period, one new store was added in Macau.

Meanwhile, the company's customer base continues to expand. As of the end of June, LAOPU GOLD reported approximately 730,000 loyalty members, an increase of 120,000 from the end of last year, representing growth of nearly 20%.

With gold prices rebounding, the external pricing pressure facing LAOPU GOLD has eased compared with the second quarter.

After international gold prices fell to around USD 4,000 per ounce in mid-July, they climbed back above USD 4,600 by late August.

The stabilization and recovery of gold prices mean the price gap between LAOPU GOLD and traditional gram-priced gold jewelry is no longer widening rapidly, giving the company more room in pricing, promotions, and restocking.

But for LAOPU GOLD, the story ahead cannot continue to revolve solely around gold price movements.

What a premium consumer brand truly needs to establish is not adaptability to any single gold price trend, but the ability to sustain demand through product differentiation, brand recognition, and pricing power whether gold prices rise, fall, or swing sharply.

Overseas expansion, store efficiency gains, and membership growth are providing LAOPU GOLD with more of this kind of buffer space.