Bank of America Securities: Maintaining the “Neutral” Rating of Old Stores Gold (06181) and raising the target price to HK$399

The Zhitong Finance App learned that Bank of America Securities released a research report saying that it maintained the “neutral” rating of Old Store Gold (06181), slightly lowered this year's earnings forecast per share from RMB 38.82 to RMB 38.1 in response to the performance of the first half of the year, and raised the target price from HK$350 to HK$399. It believes that although the current price valuation of gold from old stores is not expensive, considering the risk of weak consumer sentiment and increased competition, it is believed that profit visibility is still low.

Old Shop Gold's adjusted net profit increased 84% year-on-year in the first half of the year, in line with the bank's expectations and the profit forecast issued earlier by the company. Management pointed out that sales growth slowed in the second quarter, mainly because gold prices began to fall after the company adjusted prices at the end of February, and consumer sentiment for gold and jewelry also weakened. The promotions launched from the end of June to the beginning of July effectively stimulated demand, and emphasized that sales will continue to be promoted through product innovation, customer service and store network expansion.