JP Morgan says Laopu Gold (06181.HK) Q2 sales slowdown looks cyclical not
structural. Gross margin exceeded expectations and management has clearer plans
to manage gold-price volatility. VIC initiatives and overseas expansion should
raise medium-term growth visibility, while liquidity and dividends provide
downside protection. JP Morgan still expects a gradual earnings recovery,
forecasting Q3 and Q4 profit of about RMB800m and RMB1.2bn. Near-term sales
remain dependent on gold prices; Mid-Autumn and National Day holidays are the
next monitoring points. JP Morgan maintains an Overweight rating and HK$891
target price.