HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>The value of Laopu lies in its innovation in business model,successfully breaking away from the low-profit attribute of the industry by following the pricing and operation methods of luxury goods.</li>
<li>However, Laopu cannot enjoy the valuation system of luxury brands because it cannot “escape” gold price cycle.So, when valuation of Laopu approaches that of luxury brands, it has overvaluation risks.</li>
<li>Current valuation has priced in overseas expansion, which however isn’t a done deal.During upward cycle of gold prices,it’s easy to optimistically linearly extrapolate Laopu’s growth potential<em>.Valuation</em> faces downward revision risk  </li>
</ul>


The value of Laopu lies in its innovation in business model,successfully breaking away from the low-profit attribute of the industry by following the pricing and operation methods of luxury goods.
However, Laopu cannot enjoy the valuation system of luxury brands because it cannot “escape” gold price cycle.So, when valuation of Laopu approaches that of luxury brands, it has overvaluation risks.
Current valuation has priced in overseas expansion, which however isn’t a done deal.During upward cycle of gold prices,it’s easy to optimistically linearly extrapolate Laopu’s growth potential.Valuation faces downward revision risk  


Laopu Gold (6181.HK) - The Business Model, the Concerns, the Valuation Outlook

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analysed the earning revision of component stocks of CSI 500 in the past month.</li>
<li>We tabulated stocks with the top impact on index's EPS, stocks' EPS revision, and revenue revision.</li>
<li>We highlighted EPS revision on Henan Shenhuo Coal &amp; Power, Guangxi Liugong Machinery, Inner Mongolia Dian Tou Energy, Suzhou Dongshan Precision Manufacturing, Shenergy, Maanshan Iron &amp; Steel, Yonghui Superstores.</li>
</ul>


We analysed the earning revision of component stocks of CSI 500 in the past month.
We tabulated stocks with the top impact on index's EPS, stocks' EPS revision, and revenue revision.
We highlighted EPS revision on Henan Shenhuo Coal &amp; Power, Guangxi Liugong Machinery, Inner Mongolia Dian Tou Energy, Suzhou Dongshan Precision Manufacturing, Shenergy, Maanshan Iron &amp; Steel, Yonghui Superstores.


CSI 500 Index Earning Revision (Jun): Henan Shenhuo Coal & Power, Guangxi Liugong Machinery

Equity Capital Markets

Mokingran Jewellery Group Ltd / Equity Capital Markets

<ul>
<li>The skyrocketing gold prices have driven up the prices of gold jewelry, but actually dampen the enthusiasm of many people to buy gold jewelry, which will directly affect MOKINGRAN's performance.</li>
<li>MOKINGRAN's prediction of gold price is incorrect. For an industry veteran, MOKINGRAN shouldn’t make such mistakes. The error in the judgment of important raw material trends is worth investors' vigilance.</li>
<li>We think that valuation of MOKINGRAN should be lower than that of <a href="https://www.smartkarma.com/entities/lao-feng-xiang-co-ltd" target="_blank" data-smartkarma-citation="entities:29910:1" rel="noopener">Lao Feng Xiang (600612 CH)</a>/<a href="https://www.smartkarma.com/entities/chow-tai-seng-jewellery-co-ltd" target="_blank" data-smartkarma-citation="entities:29414:1" rel="noopener">Chow Tai Seng Jewellery (002867 CH)</a>/<a href="https://www.smartkarma.com/entities/chow-tai-fook-jewellery-group" target="_blank" data-smartkarma-citation="entities:549:1" rel="noopener">Chow Tai Fook Jewellery (1929 HK)</a> and industry average.</li>
</ul>


The skyrocketing gold prices have driven up the prices of gold jewelry, but actually dampen the enthusiasm of many people to buy gold jewelry, which will directly affect MOKINGRAN's performance.
MOKINGRAN's prediction of gold price is incorrect. For an industry veteran, MOKINGRAN shouldn’t make such mistakes. The error in the judgment of important raw material trends is worth investors' vigilance.
We think that valuation of MOKINGRAN should be lower than that of Lao Feng Xiang (600612 CH)/Chow Tai Seng Jewellery (002867 CH)/Chow Tai Fook Jewellery (1929 HK) and industry average.


Pre-IPO Mokingran Jewellery Group (PHIP Updates) - Some Points Worth the Attention

Zhou Liu Fu Jewellery / Equity Capital Markets

<ul>
<li>The franchise model of Zhou Liu Fu is the biggest performance contributor, which is also the main reason for the Company's rapid expansion and high gross profit margin.  </li>
<li>However, the CSRC questioned the rationality of franchise model and thus rejected its A-share IPO. We think the high revenue growth/profit margin may not be sustainable in the long term.</li>
<li>Pre-IPO post-investment valuation was approximately 7.407 billion yuan. Zhou Liu Fu has applied for H-Share full circulation, which may put pressure on stock price performance after the lockdown period expires.</li>
</ul>


The franchise model of Zhou Liu Fu is the biggest performance contributor, which is also the main reason for the Company's rapid expansion and high gross profit margin.  
However, the CSRC questioned the rationality of franchise model and thus rejected its A-share IPO. We think the high revenue growth/profit margin may not be sustainable in the long term.
Pre-IPO post-investment valuation was approximately 7.407 billion yuan. Zhou Liu Fu has applied for H-Share full circulation, which may put pressure on stock price performance after the lockdown period expires.


Pre-IPO Zhou Liu Fu Jewellery - The Potential Risks and Concerns Brought by the Business Model

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC IPOs & Placements

<ul>
<li>
<a href="https://www.smartkarma.com/entities/zhou-liu-fu-jewellery-co-ltd" target="_blank" data-smartkarma-citation="entities:43706:1" rel="noopener">Zhou Liu Fu Jewellery Co., Ltd. (1716396D CH)</a> is looking to raise US$200m in its upcoming Hong Kong IPO. The bookrunners on the deal are CICC and China Securities.</li>
<li>Zhou Liu Fu Jewellery (ZLFJ) is a jewelry company in China with a network of offline stores and online sales channels.</li>
<li>According to F&amp;S, the firm is ranked among the five largest brands in the Chinese jewelry market between 2017 to 2023 in terms of number of stores in China.</li>
</ul>



Zhou Liu Fu Jewellery Co., Ltd. (1716396D CH) is looking to raise US$200m in its upcoming Hong Kong IPO. The bookrunners on the deal are CICC and China Securities.
Zhou Liu Fu Jewellery (ZLFJ) is a jewelry company in China with a network of offline stores and online sales channels.
According to F&amp;S, the firm is ranked among the five largest brands in the Chinese jewelry market between 2017 to 2023 in terms of number of stores in China.


China

Chow Tai Seng Jewellery Co., Ltd. manufactures and distributes jewelry products. The Company offers necklace, pendants, earings, rings, and other jewelry products. Chow Tai Seng Jewellery serves customers in China.

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Chow Tai Seng Jewellery (002867 CH)

Laopu Gold (6181.HK) - The Business Model, the Concerns, the Valuation Outlook

Laopu's innovative business model mimics luxury brands, but overvaluation risks arise due to gold price cycles impact and uncertain overseas...

Xinyao (Criss) Wang

CSI 500 Index Earning Revision (Jun): Henan Shenhuo Coal & Power, Guangxi Liugong Machinery

We analyzed CSI 500's consensus for Jun 2025 and highlighted changes of EPS in Henan Shenhuo Coal & Power (000933 CH), Guangxi Liugong Machinery...

Ke Yan, CFA, FRM

Pre-IPO Mokingran Jewellery Group (PHIP Updates) - Some Points Worth the Attention

Skyrocketing gold prices dampen enthusiasm for gold jewelry, impacting MOKINGRAN's performance. Incorrect gold price prediction raises investor...

Xinyao (Criss) Wang

Pre-IPO Zhou Liu Fu Jewellery - The Potential Risks and Concerns Brought by the Business Model

Franchise model drives rapid growth, but CSRC once questioned the rationality. There're doubts about sustainability of growth/profit margin. Share...

Xinyao (Criss) Wang

Zhou Liu Fu Jewellery Pre-IPO Tearsheet

Zhou Liu Fu Jewellery Co., Ltd. (1716396D CH) is looking to raise US$200m in its upcoming Hong Kong IPO. The bookrunners on the deal are CICC and...

Clarence Chu

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Laopu Gold (6181.HK) - The Business Model, the Concerns, the Valuation Outlook

​Laopu's innovative business model mimics luxury brands, but overvaluation risks arise due to gold price cycles impact and uncertain overseas...

Xinyao (Criss) Wang

CSI 500 Index Earning Revision (Jun): Henan Shenhuo Coal & Power, Guangxi Liugong Machinery

We analyzed CSI 500's consensus for Jun 2025 and highlighted changes of EPS in Henan Shenhuo Coal & Power (000933 CH), Guangxi Liugong Machinery...

Ke Yan, CFA, FRM

Pre-IPO Mokingran Jewellery Group (PHIP Updates) - Some Points Worth the Attention

​Skyrocketing gold prices dampen enthusiasm for gold jewelry, impacting MOKINGRAN's performance. Incorrect gold price prediction raises investor...

Xinyao (Criss) Wang

Pre-IPO Zhou Liu Fu Jewellery - The Potential Risks and Concerns Brought by the Business Model

​Franchise model drives rapid growth, but CSRC once questioned the rationality. There're doubts about sustainability of growth/profit margin. Share...

Xinyao (Criss) Wang

Zhou Liu Fu Jewellery Pre-IPO Tearsheet

Zhou Liu Fu Jewellery Co., Ltd. (1716396D CH) is looking to raise US$200m in its upcoming Hong Kong IPO. The bookrunners on the deal are CICC and...

Clarence Chu

Laopu's innovative business model mimics luxury brands, but overvaluation risks arise due to gold price cycles impact and uncertain overseas...

Skyrocketing gold prices dampen enthusiasm for gold jewelry, impacting MOKINGRAN's performance. Incorrect gold price prediction raises investor...

Franchise model drives rapid growth, but CSRC once questioned the rationality. There're doubts about sustainability of growth/profit margin. Share...