Goldman Sachs: Lowering the target price of old gold (06181) to HK$560, the second-quarter results fell short of expectations, and the stock price reaction was negative

The Zhitong Finance App learned that Goldman Sachs released a research report stating that it lowered the target price of old gold (06181) from HK$650 to HK$560 to maintain the “buy” rating.

Goldman Sachs expects the revenue of old gold stores to be between RMB 19.8 billion and RMB 20.5 billion in the first half of this year, with adjusted net profit of about RMB 4.3 billion to RMB 4.4 billion, lower than the bank's expectations of RMB 21 billion and RMB 4.8 billion. The bank estimates that net profit for the second quarter will be around 560 million to 610 million yuan, which is also 40% to 45% lower than Goldman Sachs's forecast.

The bank believes that sales and profit margins for the second quarter were lower than market expectations, mainly affected by increased sales pressure due to the pullback in gold prices. At the same time, the ratio of employee costs and administrative marketing expenses rose due to the deleveraging effects brought about by store upgrades and brand investment. It is expected that its stock price will react negatively after the results are announced.

Goldman Sachs lowered the net profit forecast for old gold from 2026 to 2028 by 14% to 15%. The target price has a potential increase of about 41% compared to the current price. Looking forward to a normalization or recovery in gold prices, Goldman Sachs expects gold sales from old stores to see a bottom up. Currently, Goldman Sachs predicts that the price of gold will reach 4,900 US dollars per ounce by the end of this year, compared to the current price of about 4,100 US dollars.