Latest news with #LaopuGold
Daily Mail
5 days ago
- Business
- Daily Mail
Is now the time to view luxury brands as cheap thrills?
Fear stalks the luxury goods industry which brings us brandy, champagne, baubles, £10,000 handbags and £150,000 watches – not to mention £520 bucket hats for this summer's 1990s style revival, sparked by the Oasis concerts. Shares in industry behemoth LVMH are down by more than 30 per cent over the past 12 months to €472 (£409) as a result of a slump in demand and factors such as the availability of 'super-fake' bags – that can only be distinguished from the real thing by X-ray technology. In April 2023 shares in LVMH, which owns Dior, Louis Vuitton, Moet Hennessy, Sephora, Tiffany, Tag Heuer and 69 other brands, reached €903 (£783). LVMH boss Bernard Arnault became the world's richest man; he's now number eight in the league. A fightback is currently being led by LVMH and the other names in this €364billion (£316billion) industry of gloss and glamour – Burberry, EssilorLuxottica, Hermes, Kering and Richemont – hinting that it may be time to start bargain shopping for luxury goods shares. But the performance of an Asian newcomer suggests that these European players will have to muster all their creativity to regain their lustre. Over the past year, there has been a 928 per cent leap in the shares of Laopu Gold, a Chinese group founded in 2009. The company's jewellery and watches embody 'guochao' – that is, heritage, a quality currently most appealing to Chinese consumers. Since China is the world's largest luxury goods market, this homegrown bling movement is more bad news for LVMH and the rest. It also indicates what Gillian Diesen of Pictet Asset Management calls a shift to 'hard luxury' that is more about lasting quality. Laopu pieces are made of 24-carat gold, a plus when the gold price is forecast to rise further. LVMH and the other European players have already lost about 50m customers worldwide in the past two years as post-pandemic 'revenge spending' has receded against a tough macro-economic background. Tariffs may exacerbate the situation in the US. In the worst-case scenario, management consultants Bain estimates that the sector could shrink by a further 5 to 9 per cent this year. The companies' forthcoming second-quarter results will underline the headwinds they face. But Diesen argues that this will draw attention to luxury goods shares. Investors looking to diversify will conclude that the valuation of some companies is 'untenably low'. Diesen says: 'Despite low short-term expectations, there is little reason to suggest that premium brand spending will not return to its normal long-term average levels of growth, even in China. 'These companies have high gross profit margins, strong balance sheets, plenty of pricing power and long heritage which should see them through more volatile times.' The allure of a £10,000 bag may be lost on you, but you are gambling on the luxury goods sector's ability to adapt and innovate if you have savings in such popular funds as Finsbury Growth & Income and Fundsmith, which hold Burberry and LVMH respectively. The Pictet Premium Brands fund owns EssilorLuxottica, the Ray-Ban sunglasses business, and Hermes. If you want to bet on luxury, here's what you need to bear in mind: WHAT'S GONE WRONG? 'A lack of innovation and excessive price rises' are the key reasons for the travails of the luxury goods groups, says Mamta Valechha, analyst at Quilter Cheviot. Some items are now vastly more expensive. The Lady Dior bag, the style beloved of Princess Diana, costs about 75 per cent more than in 2019, and the largest version is £5,600. Valechha says: 'Many of the aspirational consumers who fuelled the post-pandemic sales explosion are now questioning the perceived value of these goods, with even names such as Chanel finding there is a limit to its pricing ambitions.' The disaffection among Gen Z consumers over pricing has boosted the popularity of 'super-fake' bags, which are said to look the real thing and cost £500 rather than £5,000. LVMH and other companies are trying to catch more of this generation by launching relatively more affordable, entry-level pieces. A £480 Dior travel pouch provides the look for less. There's also that £520 bucket hat for a 1990s Oasis vibe. BURBERRY At this week's annual general meeting chief executive Joshua Schulman pledged to concentrate on those areas where it has 'authority', which is the industry-speak for design flair and pricing power. At Burberry this means a focus on its trenchcoats and other outerwear, including Oasis-style hats and parkas, rather than expensive handbags. Schulman said: 'I'm optimistic that our best days lie ahead.' At 1317.5p, the shares are 21 per cent lower than three years ago but – 75 per cent higher over the past 12 months. Analysts consider it a 'hold'. ESSILORLUXOTTICA This French-Italian company is not only the world's number one manufacturer of spectacles, but also at the forefront of technology with its AI-powered glasses. Such is the potential of these wearable devices that Meta, owner of Instagram, Facebook and Whatsapp, has acquired a stake. Shares are €244 (£211.50) but analyst Louise Singlehurst, of Goldman Sachs, has set a target price of €285 (£247). HERMES The €251billion (£217.5billion) French house makes the Kelly and Birkin bags that are a badge of wealth and continue to be deemed to be worth their £10,000-plus price tag. Earlier this year Hermes became, briefly, a more valuable company than LVMH. There are now some questions as to whether it can continue to defy headwinds. Yet, the majority of analysts still reckon the shares – currently at €2,367 (£2,051)– to be a 'buy'. KERING Shares in Kering have tumbled by 16pc since the start of the year and are now about 60 per cent down since 2022. The cause of the French company's woes are the problems at its Gucci and Saint Laurent divisions. But Luca de Meo, the former chief executive of Renault, is taking the top job with a mission to turn around its fortunes. For the moment, analysts are unconvinced he can quickly arrest the decline, which means that these shares represent a gamble on his talents. LVMH Eleven of the analysts who follow LVMH rate it a 'hold', but nine have a 'buy' recommendation, based presumably on the assessment that Arnault will use his considerable ingenuity to revive the business. The 76-year old, known as the 'wolf in cashmere', has always prided himself on a rigorous approach, saying that 'a company, even if it's successful, should be managed as if it could go under within 12 months'. I plan to take a flutter on the basis that Arnault will wish to bow out on a high. His planned retirement age seems to be 85. RICHEMONT This Swiss group is best known for its jewellery 'houses' – Cartier and Van Cleef & Arpels. These brands were benefiting from the weakness of the yen which encouraged visitors from elsewhere to splash the cash in Japan. Figures this week, however, showed that these purchases had slowed thanks to the strengthening of the yen. But sales elsewhere have been strong, suggesting that shoppers perceive the jewellery to be more of a store of value at present than clothing. If you want to back this trend, the analysts who rate Richemont a 'buy' have set a target price of 224 Swiss francs (£208), against the current 141.8 (£132).
Business Times
7 days ago
- Business
- Business Times
What is Laopu Gold? Its stock soared 2,000% and now it's opened a store in Marina Bay Sands
[SINGAPORE] Up-and-coming Chinese jewellery label Laopu Gold has made waves in the past year with both consumers and investors alike. There has been rapidly rising demand for its offerings – and a stock price that has soared more than 2,000 per cent since its blockbuster Hong Kong listing at an initial public offering price of HK$40.50 last year. Currently, it is at HK$874.50 as at Wednesday's close. Analysts are getting bullish on the stock, and one fund manager has trounced more than 90 per cent of his peers by buying into Gen Z-favoured names such as Laopu Gold. Now, the jeweller is expanding outside of China and has selected Singapore as its first destination, with the opening of its first international boutique at Marina Bay Sands (MBS) marking a key milestone in the brand's ambitious regional expansion strategy. The Singapore store, which has drawn long queues during peak hours, is the first of four planned outside of China, according to Chinese news media. That is as the company positions itself as a serious contender to global names. It plans to open a store in Japan, but the two other locations have not been confirmed. A Bloomberg article in July cited analysts saying that Laopu poses a 'serious threat' to Western luxury brands. The owner of Cartier, Richemont, has warned investors about Laopu's rise, according to reports. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The Singapore store The Singapore store opened on Jun 21, with its location just outside the MBS casino. Long queues formed during the weeks following its opening. The store features a product selection based on the existing range, with pricing broadly in line with those at stores in China, UOB KayHian analysts noted. It also launched a new Gold Cross series for the store opening, incorporating Christian elements. 'The company's Singapore store recorded a two-hour wait time during peak time, with a higher proportion of local customers compared to the tourist-heavy Hong Kong and Macau stores, according to management,' said Nomura in a note on Jul 3. 'Management highlighted that future design direction remains rooted in Chinese aesthetics with heritage gold craftsmanship, but international designers have also been introduced to elevate the product's premium/international perception,' it added. Unlike the Singapore store, its store in Tokyo will focus on promoting cultural exchange with non-Chinese communities and emphasising finely crafted gold jewellery tailored to local aesthetic preferences, said UOB KayHian analysts. A different kind of gold business What sets Laopu apart is fundamentally its pricing model. Unlike traditional Chinese jewellers that price by weight and link daily pricing to international gold markets, Laopu uses a fixed-price model that factors in design, symbolism and craftsmanship. Its exclusivity is drawn in part from a strategy pulled from the playbook of its Western competitors. Rising gold prices have pushed investors towards bullion and coins, and gold jewellery sales in China fell around 24.7 per cent to 532 tonnes. But Laopu twice raised prices on its designer jewellery. The business again upped prices of these goods by 5 to 12 per cent last month, said a Reuters report. Laopu is eschewing the spot price for gold to which other domestic competitors peg their selling rates, charging a premium for design and branding. Nomura highlighted, citing Laopu's management, that its pricing mechanism involves at least two annual price increases, with no reductions even if gold prices fall. 'Management believes that fixed pricing and its proprietary gold designs... could help decouple product pricing from gold price fluctuations. This, according to management, will help maintain Laopu's gross margin trend in the long term,' said Nomura. Founded in 2009 by Xu Gaoming – then a government clerk in Hainan's fisheries department – Laopu Gold was officially established as a brand in 2016. It focuses on traditional Chinese designs and craftsmanship. Products include jewellery, ornaments, tableware and seasonal gifts, with a strong emphasis on high-end, goldware pieces marketing at luxury-level branding. Laopu's financials A source with direct knowledge of Laopu's business said its annual sales approached 10 billion yuan (S$1.8 billion) in 2024, up from 3.18 billion yuan in the previous year, said a Reuters report. 'Laopu's average store revenue is nearly 300 million yuan, compared with the average single-store revenue of most international jewellery brands in China, which generate around 100 million yuan to 200 million yuan annually,' the source said. Its gross profit margin has also been stable, at above 40 per cent for three years prior to its first-half 2024 review, according to Phillip Securities Hong Kong. A bigger trend? Laopu's rise underscores a larger shift in Chinese brands muscling in on the global scene, such as electric vehicle giant BYD and toy maker Pop Mart. One such brand is Seres Group, an automaker once best known for its 30,000 yuan minivans, which has overtaken BMW and Mercedes-Benz Group to become China's hottest high-end automaker, with its Aito M9 sport utility vehicle taking the title of the country's bestselling car above 500,000 yuan. Another is Mao Geping Cosmetics, a premium skincare brand founded in 2000, which saw its revenue and profit jump more than 30 per cent last year, even as foreign rivals such as L'Oreal struggled with disappointing sales in China, said a Bloomberg report. Chinese brands may have stolen market share from Nike in sportswear and L'Oreal in beauty, but they still struggle to threaten global luxury players which charge a premium for storytelling, heritage and design. While Laopu might have overtaken 96-year-old chain Chow Tai Fook this year, the road ahead is far from easy. Chow Tai Fook has since introduced its own heritage gold jewellery line, and a number of smaller brands are now mimicking Laopu's ornamental approach, intensifying domestic competition. Still, analysts from Nomura note that Laopu's brand-led approach and focus on product innovation places it in a strong position to defend its lead in a crowded and fast-evolving market. Investing in gold While Laopu Gold is more akin to a luxury consumer good, investments in gold can take various forms such as bullions, futures contracts, gold mining stocks such as CNMC Goldmine and exchange-traded funds (ETFs). This means that, for example, a Laopu Gold bangle with specific designs is more of an artisan item, while an one-ounce Pamp Suisse gold bar is considered a standard investment product. Securities such as gold ETFs also track the price of gold and are backed by physical bullion held in secure vaults, while Laopu Gold does not. 'Gold ETFs are cost-effective with lower storage and insurance costs, as compared to physical gold, and they come with minimal tracking error, meaning they closely mirror the actual price of gold,' said Dan Chang, trading representative at PhillipCapital, in an interview with The Business Times. As for Laopu assets, their sale (and re-sale) values could vary a bit more independently of gold prices, though there is some correlation. For example, a Laopu Gold necklace could sell for S$2,000 even if the gold content is worth only S$1,300. This is because of the excess value of design and branding, whereas an SPDR Gold Shares ETF directly tracks the price of gold. In another circumstance, reselling a Laopu Gold asset may yield 60 to 70 per cent of its purchase price – unless it is a collectible. Comparatively, selling a gold bar or ETF is more straightforward and transparent to investors due to their value pegged to current gold prices. That said, the steady rise in the price of gold, which currently trades at around double its level in 2022, has given Laopu a boost as buyers see its wares as a place to park their cash amid uncertain times.
Business Times
7 days ago
- Business
- Business Times
What is Laopu Gold? This Gen Z darling soared 2,000% and now it's opened a store in Marina Bay Sands
[SINGAPORE] Up-and-coming Chinese jewellery label Laopu Gold has made waves in the past year with both consumers and investors alike. There has been rapidly rising demand for its offerings – and a stock price that has soared more than 2,000 per cent since its blockbuster Hong Kong listing at an initial public offering price of HK$40.50 last year. Currently, it is at HK$874.50 as at Wednesday's close. Analysts are getting bullish on the stock, and one fund manager has trounced more than 90 per cent of his peers by buying into Gen Z-favoured names such as Laopu Gold. Now, the jeweller is expanding outside of China and has selected Singapore as its first destination, with the opening of its first international boutique at Marina Bay Sands (MBS) marking a key milestone in the brand's ambitious regional expansion strategy. The Singapore store, which has drawn long queues during peak hours, is the first of four planned outside of China, according to Chinese news media. That is as the company positions itself as a serious contender to global names. It plans to open a store in Japan, but the two other locations have not been confirmed. A Bloomberg article in July cited analysts saying that Laopu poses a 'serious threat' to Western luxury brands. The owner of Cartier, Richemont, has warned investors about Laopu's rise, according to reports. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The Singapore store The Singapore store opened on Jun 21, with its location just outside the MBS casino. Long queues formed during the weeks following its opening. The store features a product selection based on the existing range, with pricing broadly in line with those at stores in China, UOB KayHian analysts noted. It also launched a new Gold Cross series for the store opening, incorporating Christian elements. 'The company's Singapore store recorded a two-hour wait time during peak time, with a higher proportion of local customers compared to the tourist-heavy Hong Kong and Macau stores, according to management,' said Nomura in a note on Jul 3. 'Management highlighted that future design direction remains rooted in Chinese aesthetics with heritage gold craftsmanship, but international designers have also been introduced to elevate the product's premium/international perception,' it added. Unlike the Singapore store, its store in Tokyo will focus on promoting cultural exchange with non-Chinese communities and emphasising finely crafted gold jewellery tailored to local aesthetic preferences, said UOB KayHian analysts. A different kind of gold business What sets Laopu apart is fundamentally its pricing model. Unlike traditional Chinese jewellers that price by weight and link daily pricing to international gold markets, Laopu uses a fixed-price model that factors in design, symbolism and craftsmanship. Its exclusivity is drawn in part from a strategy pulled from the playbook of its Western competitors. Rising gold prices have pushed investors towards bullion and coins, and gold jewellery sales in China fell around 24.7 per cent to 532 tonnes. But Laopu twice raised prices on its designer jewellery. The business again upped prices of these goods by 5 to 12 per cent last month, said a Reuters report. Laopu is eschewing the spot price for gold to which other domestic competitors peg their selling rates, charging a premium for design and branding. Nomura highlighted, citing Laopu's management, that its pricing mechanism involves at least two annual price increases, with no reductions even if gold prices fall. 'Management believes that fixed pricing and its proprietary gold designs... could help decouple product pricing from gold price fluctuations. This, according to management, will help maintain Laopu's gross margin trend in the long term,' said Nomura. Founded in 2009 by Xu Gaoming – then a government clerk in Hainan's fisheries department – Laopu Gold was officially established as a brand in 2016. It focuses on traditional Chinese designs and craftsmanship. Products include jewellery, ornaments, tableware and seasonal gifts, with a strong emphasis on high-end, goldware pieces marketing at luxury-level branding. Laopu's financials A source with direct knowledge of Laopu's business said its annual sales approached 10 billion yuan (S$1.8 billion) in 2024, up from 3.18 billion yuan in the previous year, said a Reuters report. 'Laopu's average store revenue is nearly 300 million yuan, compared with the average single-store revenue of most international jewellery brands in China, which generate around 100 million yuan to 200 million yuan annually,' the source said. Its gross profit margin has also been stable, at above 40 per cent for three years prior to its first-half 2024 review, according to Phillip Securities Hong Kong. A bigger trend? Laopu's rise underscores a larger shift in Chinese brands muscling in on the global scene, such as electric vehicle giant BYD and toy maker Pop Mart. One such brand is Seres Group, an automaker once best known for its 30,000 yuan minivans, which has overtaken BMW and Mercedes-Benz Group to become China's hottest high-end automaker, with its Aito M9 sport utility vehicle taking the title of the country's bestselling car above 500,000 yuan. Another is Mao Geping Cosmetics, a premium skincare brand founded in 2000, which saw its revenue and profit jump more than 30 per cent last year, even as foreign rivals such as L'Oreal struggled with disappointing sales in China, said a Bloomberg report. Chinese brands may have stolen market share from Nike in sportswear and L'Oreal in beauty, but they still struggle to threaten global luxury players which charge a premium for storytelling, heritage and design. While Laopu might have overtaken 96-year-old chain Chow Tai Fook this year, the road ahead is far from easy. Chow Tai Fook has since introduced its own heritage gold jewellery line, and a number of smaller brands are now mimicking Laopu's ornamental approach, intensifying domestic competition. Still, analysts from Nomura note that Laopu's brand-led approach and focus on product innovation places it in a strong position to defend its lead in a crowded and fast-evolving market. Investing in gold While Laopu Gold is more akin to a luxury consumer good, investments in gold can take various forms such as bullions, futures contracts, gold mining stocks such as CNMC Goldmine and exchange-traded funds (ETFs). This means that, for example, a Laopu Gold bangle with specific designs is more of an artisan item, while an one-ounce Pamp Suisse gold bar is considered a standard investment product. Securities such as gold ETFs also track the price of gold and are backed by physical bullion held in secure vaults, while Laopu Gold does not. 'Gold ETFs are cost-effective with lower storage and insurance costs, as compared to physical gold, and they come with minimal tracking error, meaning they closely mirror the actual price of gold,' said Dan Chang, trading representative at PhillipCapital, in an interview with The Business Times. As for Laopu assets, their sale (and re-sale) values could vary a bit more independently of gold prices, though there is some correlation. For example, a Laopu Gold necklace could sell for S$2,000 even if the gold content is worth only S$1,300. This is because of the excess value of design and branding, whereas an SPDR Gold Shares ETF directly tracks the price of gold. In another circumstance, reselling a Laopu Gold asset may yield 60 to 70 per cent of its purchase price – unless it is a collectible. Comparatively, selling a gold bar or ETF is more straightforward and transparent to investors due to their value pegged to current gold prices. That said, the steady rise in the price of gold, which currently trades at around double its level in 2022, has given Laopu a boost as buyers see its wares as a place to park their cash amid uncertain times.
Yahoo
7 days ago
- Business
- Yahoo
Asian Growth Companies With High Insider Ownership For July 2025
As of July 2025, Asian markets are navigating a complex landscape shaped by global tariff developments and domestic economic challenges. Despite these headwinds, growth stocks in the region have shown resilience, making companies with high insider ownership particularly intriguing for investors seeking potential opportunities. In this context, insider ownership can serve as a valuable indicator of confidence in a company's long-term prospects, especially when market conditions are uncertain. Top 10 Growth Companies With High Insider Ownership In Asia Name Insider Ownership Earnings Growth Zhejiang Leapmotor Technology (SEHK:9863) 15.6% 60.6% Vuno (KOSDAQ:A338220) 15.6% 109.8% Techwing (KOSDAQ:A089030) 18.8% 68% Suzhou Sunmun Technology (SZSE:300522) 35.4% 77.7% Shanghai Huace Navigation Technology (SZSE:300627) 24.3% 23.5% Oscotec (KOSDAQ:A039200) 12.7% 98.7% Novoray (SHSE:688300) 23.6% 28.2% M31 Technology (TPEX:6643) 30.8% 63.4% Laopu Gold (SEHK:6181) 35.5% 42.3% Fulin Precision (SZSE:300432) 13.6% 43.7% Click here to see the full list of 597 stocks from our Fast Growing Asian Companies With High Insider Ownership screener. Let's uncover some gems from our specialized screener. Beijing Fourth Paradigm Technology Simply Wall St Growth Rating: ★★★★★☆ Overview: Beijing Fourth Paradigm Technology Co., Ltd. is an investment holding company that offers platform-centric artificial intelligence solutions in China, with a market capitalization of HK$27.35 billion. Operations: The company generates revenue from its Sage AI Platform (CN¥3.68 billion), Sagegpt AIGS Services (CN¥562.50 million), and Shift Intelligent Solutions (CN¥1.02 billion). Insider Ownership: 21.5% Beijing Fourth Paradigm Technology is poised for significant growth, with earnings projected to increase by 96.93% annually and revenue expected to grow at 22.5% per year, outpacing the Hong Kong market. Despite a low forecasted return on equity of 7.4%, the company trades at a substantial discount to its estimated fair value. Recent board changes and auditor appointments reflect strategic shifts, while insider ownership remains stable without significant recent trading activity. Navigate through the intricacies of Beijing Fourth Paradigm Technology with our comprehensive analyst estimates report here. Insights from our recent valuation report point to the potential undervaluation of Beijing Fourth Paradigm Technology shares in the market. RemeGen Simply Wall St Growth Rating: ★★★★★★ Overview: RemeGen Co., Ltd. is a biopharmaceutical company focused on discovering, developing, and commercializing biologics for autoimmune, oncology, and ophthalmic diseases in Mainland China and the United States, with a market cap of approximately HK$40.54 billion. Operations: RemeGen Co., Ltd. generates revenue of approximately CN¥1.91 billion from its biopharmaceutical research, service, production, and sales activities. Insider Ownership: 11.1% RemeGen is positioned for robust growth, with revenue expected to increase by 25% annually and earnings projected to grow at a substantial rate of 66.61% per year, surpassing the Hong Kong market. Despite recent share price volatility and no significant insider trading activity, the company remains focused on expanding its innovative drug pipeline. Recent strategic moves include a licensing agreement with Vor Bio worth over US$4 billion in potential milestones and amendments to its corporate bylaws. Take a closer look at RemeGen's potential here in our earnings growth report. Insights from our recent valuation report point to the potential overvaluation of RemeGen shares in the market. Changsha Jingjia Microelectronics Simply Wall St Growth Rating: ★★★★★☆ Overview: Changsha Jingjia Microelectronics Co., Ltd. operates in the semiconductor industry, focusing on the design and development of electronic components, with a market cap of CN¥38.85 billion. Operations: The company's revenue primarily comes from its Computer, Communications and Other Electronic Equipment Manufacturing segment, totaling CN¥460.42 million. Insider Ownership: 36.3% Changsha Jingjia Microelectronics is projected to achieve significant growth, with revenue expected to rise by 46.7% annually, outpacing the Chinese market. Earnings are forecasted to grow at 111.85% per year as the company aims for profitability within three years. Despite a challenging financial year with a net loss of CNY 165.12 million in 2024, no recent insider trading activity has been reported, indicating stable insider confidence amidst declining dividends and sales figures. Delve into the full analysis future growth report here for a deeper understanding of Changsha Jingjia Microelectronics. Upon reviewing our latest valuation report, Changsha Jingjia Microelectronics' share price might be too optimistic. Make It Happen Explore the 597 names from our Fast Growing Asian Companies With High Insider Ownership screener here. Interested In Other Possibilities? The latest GPUs need a type of rare earth metal called Neodymium and there are only 27 companies in the world exploring or producing it. Find the list for free. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks analysis only considers stock directly held by insiders. It does not include indirectly owned stock through other vehicles such as corporate and/or trust entities. All forecast revenue and earnings growth rates quoted are in terms of annualised (per annum) growth rates over 1-3 years. Companies discussed in this article include SEHK:6682 SEHK:9995 and SZSE:300474. Have feedback on this article? Concerned about the content? with us directly. 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CNBC
07-07-2025
- Business
- CNBC
This Chinese jeweler is using traditional techniques to challenge Cartier — and it's starting in Singapore
SINGAPORE / BEIJING — A Chinese company with a new twist on gold jewelry is taking aim at global luxury giants with its first overseas store. Laopu Gold opened in Singapore on June 21, just outside the Marina Bay Sands casino. During the first two weekends, wait times stretched from one to two hours, according to an employee. Echoing the sleek front of the nearby Patek Philippe store, Laopu's windows showed off a delicately crafted golden deer and lotus sutra urn, gleaming against black display panels, as if in a museum. The company uses traditional Chinese gold crafting techniques inspired by ancient royal jewelry. Jessie Lim, a 52-year-old Singaporean, said she entered the store with low expectations but left with a bracelet on her wrist and a butterfly necklace on her daughter's neck — a total purchase of at least $4,000. "The designs are very exquisite. Even the wings of the butterfly are double-layered," she said. "There are also diamonds [inset into the pieces]." In a sign of growing global attention, San Antonio Spurs' player Victor "Wemby" Wembanyama also picked up one of Laopu's "hulu" gourd-shaped pendant necklaces while visiting Beijing last month, the athlete's China representatives told CNBC. The 21-year-old French basketball player has rocked the gold necklace in recent public appearances, including a New York City sports show. He became a brand ambassador for LVMH last year. A 12,520 yuan ($1,747) version of the hand-crafted gourd-shaped pendant is Laopu's most popular piece on Chinese e-commerce site Tmall. A pricier gourd (29,250 yuan) made of gold threads ranked fifth. Laopu has excited investors with its surging China sales — up 166% to 9.8 billion yuan ($1.37 billion) in 2024, according to its annual report. The company's shares have skyrocketed by well over 2,000% since its public offering price of HK$40.50 in Hong Kong in June 2024. While Laopu is an obvious beneficiary of surging gold prices, its success contrasts with that of European luxury giants, which have seen their China sales drop amid lackluster domestic consumption. In May, Cartier-parent Richemont warned investors that Laopu's rise pressures the European company "to be creative and to develop ways to make our brands desirable." For its Singapore venture, Laopu launched an exclusive diamond inlaid gold cross for local customers, in addition to a wide range of products such as the popular hulu necklace, which draws on Chinese folk beliefs and Taoist culture. Several days after the store opening, the wait was still one hour long on a weekday, said Xew Ling, a 60-year-old owner of a local construction business. She instead returned the next day, when the wait was only about 30 minutes. To avoid Laopu's long lines, people working near the iconic Singapore landmark have even taken advantage of weekday lunch breaks. "The whole office bought not just one piece, but three," Juliana Go, a 58-year-old Singaporean, said of her daughter and her co-workers. Go had to see Laopu for herself, noting its designs didn't always adhere to traditional impressions of Chinese design. Pearls are "out," she said, adding that gold has investment value. To maintain its exclusivity, Laopu rarely offers discounts, instead raising its prices at least twice a year, with no reductions even if gold prices fall, Nomura analysts said in a report Wednesday, citing a call it hosted earlier that same day with the Chinese company's management. Nomura added that the company plans to open a store in Japan next year. The question remains whether Laopu can make it into the ranks of European luxury once initial excitement around the Singapore store fades. "So far so good, but I'm not sure whether they will continue to be successful or not," said Li Jie, a professor and director of the Luxury Brand Research Center of Shanghai Jiao Tong University. He said Laopu's rise over the last two or three years is based on 16 years of effort, and a product that effectively addresses the functional, emotional and social needs of middle-class Chinese consumers. Many Chinese companies overemphasize the functional or emotional value of their brands, he said. For the global market, he said, Chinese brands need to move slowly and steadily to consistently build their reputation, such as through the hosting of events. Part of Laopu's success so far is due to its exclusivity. Chow Tai Fook, a nearly 100-year-old Hong Kong jeweler, has more than 6,500 stores. But as of December, its gross profit margin was 29.5%, versus 41.2% for Laopu Gold, which has taken a more selective approach with fewer than 50 stores. Li, who is also vice president of The Price Association of China, said he worked with Chow Tai Fook several years ago to develop a heritage line of jewelry, but it didn't take off partly due to management changes. Laopu has since captured the same high-end segment with targeted products, recovering from a soft patch nearly a decade ago when it had to close some stores, Li said. Laopu's management declined to be interviewed for this story. It wasn't until late 2016 that Laopu's founder, Xu Gaoming, took direct leadership of product research and development, which now has 20 employees in the departments, according to public records. In a broader management shakeup, Xu became chairman in November 2023. Laopu's first overseas venture still stayed close to home, pointed out Oliver Wyman consultant Dave Xie. Singapore has a large ethnic Chinese population, while a visa-free policy has attracted many Chinese tourists. Xie added that other Chinese companies, such as cosmetics brand Florasis, have used heritage-inspired product design and packaging to attract global consumers. Laopu Gold's story is unfolding at a pivotal moment for Chinese brands — from the craze over Pop Mart's Labubu collectible to BYD's electric cars — as they try to expand globally, despite trade tensions. Within China, local brands have already captured seven of Tmall's top 15 luxury handbag rankings, said Ashley Dudarenok, founder of ChoZan, a China market consultancy. Overseas, growing interest in Chinese brands is "accelerated by generational preferences for authentic heritage over legacy prestige and geopolitical realignments favoring Eastern manufacturing," she said. As for Laopu, if it can "balance authentic storytelling with universal appeal, its trajectory could very well mirror the early global ascent of premier European houses," added Dudarenok, who noted that its combination of gold craftsmanship and strategic choice of Marina Bay Sands as its first international flagship store form a "formidable foundation" for becoming a global luxury brand. The Singapore integrated resort has more than 170 luxury brands, according to Hazel Chan, senior vice president of retail at Marina Bay Sands. "Laopu Gold is one of the new-to-market brands we are welcoming this year," she said in a statement. "Their first international boutique outside of China will further elevate one of our most in-demand categories, luxury watches and jewelry." Fashion brand Shanghai Tang, Kering-owned Chinese jewelry brand Qeelin and Haidilao Hot Pot also have stores at Marina Bay Sands. While many more Chinese companies will likely become premium global players, every success story could coincide with many failures, said Chen Luo, head of China consumers research at BofA Global Research. But they are giving Western brands a run for their money, Luo said, noting how Chinese companies have had to adapt to fast-changing consumer demands at home. "My view is that a lot of Western companies, especially U.S. companies, they have got too easy a life."
