Morgan Stanley: Upgrades Old Shop Gold's revenue and profit forecasts for this year by 13% to 14%, rating "Overweight"

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Morgan Stanley released a research report saying that Laopu Gold (06181) delivered strong performance in the first quarter this year. It expects earnings per share in the first half of the year to potentially jump by a multiple year over year. The stock’s valuation is quite attractive; it is currently trading at 13 times the 2026 forecast price-to-earnings (P/E) ratio. There is upward risk to earnings forecasts. Morgan Stanley maintains a group target price of 1,010 Hong Kong dollars, but due to gold price fluctuations and unclear demand, it has lowered the target P/E from 23 times to 20 times, with a rating of “Buy/Increase Holdings.”

The firm said management made no comment on its fund-raising needs, but admitted that cash flow is tight. It believes the recent sharp drop in the gold price has brought uncertainty to market demand, but at the same time is a good opportunity to test whether its brand strength can support continued revaluation.

Morgan Stanley has raised its forecasts for Laopu’s revenue and net profit by 13% and 14%, respectively. It expects that in 2026, they will increase by 55% and 66% year over year, respectively, to RMB 42.0 billion and RMB 8.0 billion. With uncertainty in the gold price, assuming that demand growth momentum will slow in the second quarter and the fourth quarter of this year, it believes its current forecast is sufficiently conservative.

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Responsible editor: Shi Lijun