HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<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 (6168 HK)</a>'s 1H25 results are healthy, but there are challenges, including weak revenue growth and higher R&amp;D costs.  </li>
<li>Growth is almost entirely driven by online sales, but its plan to expand offline stores rapidly may erode net profit in the near term. </li>
<li>The stock has become the most expensive one in the sector, based on its PERs of 22.4x CY25F and 21.4x CY26F. Its 3-year EPS CAGR of 6.8% is uninspiring.</li>
</ul>



Zhou Liu Fu Jewellery (6168 HK)'s 1H25 results are healthy, but there are challenges, including weak revenue growth and higher R&amp;D costs.  
Growth is almost entirely driven by online sales, but its plan to expand offline stores rapidly may erode net profit in the near term. 
The stock has become the most expensive one in the sector, based on its PERs of 22.4x CY25F and 21.4x CY26F. Its 3-year EPS CAGR of 6.8% is uninspiring.


Zhou Liu Fu (6168 HK): 1H25 Is Fine, but Still......

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

<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

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>
<a href="https://www.smartkarma.com/entities/laopu-gold-co-ltd" target="_blank" data-smartkarma-citation="entities:44036:1" rel="noopener">Laopu Gold (6181 HK)</a> missed global index inclusion in May following completion of full circulation. The primary placement in May then improved chances of index inclusion in August.</li>
<li>The stock rose nearly 60% in the 2 months following the placement and has lost more than a third of its value from the peak in the last month.</li>
<li>The stock could be added to both global indices with one inclusion at the end of August and one in mid-September. That could provide short-term support for the stock.</li>
</ul>



Laopu Gold (6181 HK) missed global index inclusion in May following completion of full circulation. The primary placement in May then improved chances of index inclusion in August.
The stock rose nearly 60% in the 2 months following the placement and has lost more than a third of its value from the peak in the last month.
The stock could be added to both global indices with one inclusion at the end of August and one in mid-September. That could provide short-term support for the stock.


Laopu Gold (6181 HK): Potential Inclusion in Both Global Indices

Chief Executive Officer, Emmer Capital Partners Limited

Manishi Raychaudhuri

Chief Executive Officer

Emmer Capital Partners Limited

Emmer Capital Partners is an Asia Pacific focused financial advisory firm engaging in strategic financial asset allocation advice, bespoke thematic research and advising early-stage companies and connecting them to investors. Emmer Capital provides macro-economic and multi-asset investment strategy inputs to institutions, family offices, private wealth managers, private equity, and corporate boards directly and through independent research platforms. Emmer Capital also advises a wide range of startup companies on fund raising and business strategy. Emmer Capital's active engagement with the print and electronic media reaches a broad spectrum of investors across the globe.

<ul>
<li>Since inception on May 15, our Model Portfolio (up 6.2%) underperformed the MSCI Asia-ex-Japan index (up 7.87%) due to underperforming stock picks in India, ASEAN and China consumer proxies.</li>
<li>The main themes: China's changing consumption and investment patterns, Korea's improving corporate governance, continuing global infrastructure investments and India's earnings disappointment. Korea, HK/China remain overweight; India is downgraded to Neutral.</li>
<li>We exclude Meituan, Titan, Infosys, Bharat Dynamics, Krafton. We include Laopu Gold, Lonking Holdings, China Hongqiao, AIA and Hyundai Engineering and Construction. We are now Neutral Industrials and Underweight Technology.</li>
</ul>


Since inception on May 15, our Model Portfolio (up 6.2%) underperformed the MSCI Asia-ex-Japan index (up 7.87%) due to underperforming stock picks in India, ASEAN and China consumer proxies.
The main themes: China's changing consumption and investment patterns, Korea's improving corporate governance, continuing global infrastructure investments and India's earnings disappointment. Korea, HK/China remain overweight; India is downgraded to Neutral.
We exclude Meituan, Titan, Infosys, Bharat Dynamics, Krafton. We include Laopu Gold, Lonking Holdings, China Hongqiao, AIA and Hyundai Engineering and Construction. We are now Neutral Industrials and Underweight Technology.


Asian Equity: Changes to Model Portfolio: Korea, HK/CN Overweight. India Neutral; ASEAN Underweight

Equity Analyst - Asia Consumer Sector, Investory

Devi Subhakesan

Equity Analyst - Asia Consumer Sector

ASIA CONSUMER: INSIGHTS AND INVESTMENT IDEAS

Investory

Investory is a Singapore-based boutique independent equity research firm founded in January 2017 with a primary focus on consumption themes across Asia-Pacific.

We aim to generate investible ideas based on consumption trends and outlook. We screen our ideas on several parameters - product potential, long-term growth and management commitment being the most critical.  We follow a fundamental analysis approach in our stock selection process and are not restricted by market cap.

We aspire to grow into a leading source of unbiased research, free of conflict of interest, for investors yearning for independent and disciplined analysis. 

We also undertake bespoke research mandates to support our Institutional clients’ investment needs.

Our team comprises of professionals with extensive experience in the Asian equity markets, in areas ranging from research, servicing institutional clients and investment management.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/laopu-gold-co-ltd" target="_blank" data-smartkarma-citation="entities:44036:1" rel="noopener">Laopu Gold (6181 HK)</a>’s stock has fallen nearly 30% since its July 8 peak and declined another 4% yesterday despite an upbeat 1H2025 profit update.</li>
<li>The company’s positive profit alert reported revenues and profits up more than 2.5x year-on-year, exceeding market expectations.</li>
<li>The ongoing share price weakness despite strong results likely reflects a combination of technical factors, such as lock-up related selling, and broader fundamental concerns.</li>
</ul>



Laopu Gold (6181 HK)’s stock has fallen nearly 30% since its July 8 peak and declined another 4% yesterday despite an upbeat 1H2025 profit update.
The company’s positive profit alert reported revenues and profits up more than 2.5x year-on-year, exceeding market expectations.
The ongoing share price weakness despite strong results likely reflects a combination of technical factors, such as lock-up related selling, and broader fundamental concerns.


Laopu Gold (6181 HK): Strong Earnings, Soft Share Price – What’s Driving the Disconnect?

China

Laopu Gold is a leading Chinese designer, manufacturer, and retailer of heritage gold jewelry, offering products with Chinese culture-inspired designs and craftsmanship. The company sells pure gold, gem-set, and non-gold jewelry through both offline retail stores and online platforms, and provides maintenance and repair services. Founded in 2009, its headquarters are located in Beijing, China.

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Laopu Gold (6181 HK)

Zhou Liu Fu (6168 HK): 1H25 Is Fine, but Still......

Zhou Liu Fu has a healthy 1H25, but faces challenges with weak revenue growth and higher R&D costs. Expansion of offline stores may impact net...

Osbert Tang, CFA