On September 24, LAOPU GOLD fell 3.06% in regular trading to HK$342.2, with turnover of HK$215 million, extending its losing streak to four consecutive sessions.

On the news front, Citigroup published a research note flagging that LAOPU GOLD has stepped up promotional discounts in shopping malls during Q3, which while supportive of sequential sales growth, will weigh on gross margins quarter-over-quarter. The bank estimated that Q3 revenue needs to rise 18% sequentially to RMB 3.9 billion simply to maintain Q2-level net profit. For H2 overall, Citigroup projects revenue declining 15% to 39% year-over-year, with net profit margin narrowing to 16.8%-19.2%. The bank maintained a Buy rating with a target price of HK$507.

Q2 earnings had already shown a sharp sequential slowdown due to the rapid pullback in gold prices, and the market remains in wait-and-see mode ahead of the Mid-Autumn and National Day holiday sales data, keeping near-term earnings visibility low and continuing to suppress the share price.

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