Laopu Gold Shares Slide After Share-Placement Plan

By Megan Cheah

Shares of Laopu Gold slid in Hong Kong after the Chinese jewelry retailer announced a share-placement plan and alongside wider declines by gold-related stocks following a sharp fall in the precious metal's prices.

The stock declined as much as 8.3% on Wednesday to HK$703.00, its largest fall since July. It closed 8.2% lower at HK$704.00.

Laopu Gold plans to raise 2.72 billion Hong Kong dollars, equivalent to US$350 million, through the placement of 3.7 million shares, it said in a Wednesday filing. The HK$732.49 placing price marked a 4.5% discount to the stock's closing price on Monday.

The proceeds will largely be used to build its inventory reserves in preparation for peak sales periods, said Laopu Gold. Procurement costs have increased thanks to the continued rise of gold prices, the company said.

Laopu Gold's share placement was likely within market expectations, but investors may question if the funds raised will be sufficient for the retailer, Citi analysts said in a note. "Considering the rapid sales growth, it is necessary to build inventory in advance to prepare for the peak seasons," they said.

Nonetheless, Laopu Gold's inventory needs could moderate next year as the company's store expansion and same-store sales are likely to slow, the Citi analysts said. Strong gold prices and Laopu Gold's latest round of price increases could also enhance the company's 2026 earnings visibility, they add.

That said, gold prices made their biggest decline in over a decade overnight, possibly due to investors locking in profits from the yellow metal's historic rally as well as signs of easing U.S.-China tensions. Gold's pull-back likely weighed on Chinese gold-related stocks, including Laopu Gold.

Write to Megan Cheah at megan.cheah@wsj.com

(END) Dow Jones Newswires

October 22, 2025 04:51 ET (08:51 GMT)