Morgan Stanley Sees a 70%-80% Chance of a 30-Day Gain for Laopu Gold After Sharp Pullback
Morgan Stanley has issued a tactical bullish view on Laopu Gold (6181.HK), estimating a 70%-80% probability that the stock will post an absolute gain over the next 30 days.
Morgan Stanley has issued a tactical bullish view on Laopu Gold (6181.HK), estimating a 70%-80% probability that the stock will post an absolute gain over the next 30 days.
The bank's core rationale is that the stock has fallen 43% year to date, sharply underperforming the MSCI China Index, which is down 7%. Its valuation has declined to 7.5 times expected 2026 P/E, corresponding to an expected dividend yield of 8%.
The note identifies several near-term catalysts. Gold prices rose 7% in August; demand for fixed-price products improved month over month; Chow Tai Fook's July same-store sales growth in the double digits provided confirmation of industry demand; and store traffic has recovered.
In the medium term, Morgan Stanley expects dividends per share of HK$20-HK$22, implying a 10% LTM dividend yield.
In summary, Morgan Stanley says Laopu Gold's valuation looks highly attractive after its sharp year-to-date pullback. The bank cites recovering gold prices, improving demand and the prospect of high dividends as catalysts, and estimates a 70%-80% probability of an absolute share-price gain over the next 30 days.
The overall bias is positive for Laopu Gold. Morgan Stanley says the 43% year-to-date decline and the valuation reset to 7.5 times P/E have not yet priced in the near-term positives from higher gold prices, improving demand and potential for high dividends.
The catalysts identified in the note are: the release of interim results and payment of an interim dividend in late August; continued increases in gold prices; and promotional activity that could support a recovery in store traffic and sales.
The bank's core rationale is that the stock has fallen 43% year to date, sharply underperforming the MSCI China Index, which is down 7%. Its valuation has declined to 7.5 times expected 2026 P/E, corresponding to an expected dividend yield of 8%.
The note identifies several near-term catalysts. Gold prices rose 7% in August; demand for fixed-price products improved month over month; Chow Tai Fook's July same-store sales growth in the double digits provided confirmation of industry demand; and store traffic has recovered.
In the medium term, Morgan Stanley expects dividends per share of HK$20-HK$22, implying a 10% LTM dividend yield.
In summary, Morgan Stanley says Laopu Gold's valuation looks highly attractive after its sharp year-to-date pullback. The bank cites recovering gold prices, improving demand and the prospect of high dividends as catalysts, and estimates a 70%-80% probability of an absolute share-price gain over the next 30 days.
The overall bias is positive for Laopu Gold. Morgan Stanley says the 43% year-to-date decline and the valuation reset to 7.5 times P/E have not yet priced in the near-term positives from higher gold prices, improving demand and potential for high dividends.
The catalysts identified in the note are: the release of interim results and payment of an interim dividend in late August; continued increases in gold prices; and promotional activity that could support a recovery in store traffic and sales.