China’s Laopu Gold stock reaches HK$1,000 after investors’ H-share conversion

Beijing-based Laopu Gold, known for its handmade jewellery, has won approval from the Hong Kong stock exchange to convert 40.39 million unlisted shares held by three shareholders into H shares, accounting for nearly 24 per cent of the total shares issued. Full circulation allows major shareholders of all Hong Kong-listed mainland companies to convert their unlisted stock into ordinary tradable shares.

The approval came as Laopu’s stock has outshone gold since listing last year, even with bullion prices soaring to record highs. On 2 April, Laopu’s shares fell 8 per cent, trimming some of the 19 per cent gains made a day earlier when they hit a record HK$868.00. The stock has risen more than 2,000 per cent from its initial public offering price of HK$40.50 in June 2024. Meanwhile, gold prices have gained nearly 35 per cent over the same period, hitting new peaks along the way.

The shares rose after the company on Monday announced a 254 per cent year-on-year jump in net profit to 1.47 billion yuan (US$202 million) in 2024. Revenue jumped 168 per cent to 8.5 billion yuan last year. “Laopu’s current valuation appears inflated following a recent rally,” said Kenny Ng, a strategist at Everbright Securities International, who also highlighted risks from an imminent lock-up expiry period. However, Jefferies raised its target price for Laopu’s stock to HK$1,068 per share following the strong earnings.