Laopu Gold's Gross Margin Falls Below 40%: Analysis of Brand Premium Capability

Based on collected data and in-depth analysis, here is the detailed research report on Laopu Gold’s gross margin falling below 40%:

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Laopu Gold (06181.HK) shows a continuous downward trend in gross margin:

Time Period	Gross Margin	Markup Rate	QoQ Change
2022	41.9%	72.1%	Stable
2023	41.9%	72.1%	Flat
2024	41.2%	70.1%	Down 0.7pct
2025H1	38.1%	61.6%	Down 3.1pct

: In H1 2025, the gross margin fell below the 40% threshold for the first time, a 3.8 percentage point drop from its peak [1][2].

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Brand	Gross Margin	Markup Rate	Positioning
Chow Tai Seng	45.0%	81.8%	Mid-to-high end
Laopu Gold	38.1%	61.6%	High-end Ancient Gold
Chow Tai Fook	35.0%	53.8%	Mass chain
Chow Sang Sang	25.0%	33.3%	Mid-to-high end
Lao Feng Xiang	10.0%	11.1%	Mass market

Laopu Gold still maintains a relatively high gross margin among domestic peers, but it is no longer higher than Chow Tai Seng [3].

Brand/Type	Gross Margin	Markup Rate
Hermès	70.0%	233.3%
Chanel	68.0%	212.5%
LVMH	65.0%	185.7%
Laopu Gold	38.1%	61.6%
Fashion Industry Average	40-50%	140%

: Compared to top international luxury brands, Laopu Gold’s gross margin gap reaches 27-32 percentage points, and the markup rate gap is 3-4 times [4][5].

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• Pressure from rapid gold price increases is transmitted, and there is a time lag in product price adjustments
• The “fixed price” model cannot fully transmit raw material cost increases [1]

• All stores are located in top commercial districts like SKP and Taikoo Hui, leading to high rental costs
• Sales expense ratio is as high as 18.2%, significantly higher than peers [3]

• Shenzhen Shuibei supply chain has strong replication capabilities, with “same-source products” circulating at low prices
• Market share is only 2% (ranked 7th in the ancient gold market), and brand barriers have not yet been fully established [6]

• Compared to true luxury brands: second-hand markets still recycle based on “real-time gold prices”
• Has not formed pricing power independent of raw materials, and has weak anti-cyclical capabilities [6]

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1. Current Status
   : Laopu Gold has a leading advantage in the domestic ancient gold track, but there is a clear gap with international luxury brands
2. Nature of Bottlenecks
   : The gross margin falling below 40% reflects phased challenges in pricing power and cost transmission capabilities
3. Key to the Future
   : Need to build a complete luxury brand narrative and break away from the “raw material binding” model to break through the premium ceiling

: The wholesale markup rate benchmark for the fashion industry is 120%-160%, and that for the luxury industry can reach over 200% [4][5]. Laopu Gold’s 61.6% markup rate is at a mid-level, and there is still significant room for improvement to reach the premium capability of true luxury brands.

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[1] Securities Times - “Laopu Gold: Rapid Gold Price Rise and Price Adjustment Delay Lead to Slight Gross Margin Drop to 38.1%” (https://stcn.com/article/detail/3202332.html)

[2] Shanxi Securities Research Report - “In-depth Analysis of Laopu Gold (06181.HK)” (https://pdf.dfcfw.com/pdf/H3_AP202409261640051580_1.pdf)

[3] Debang Securities - “Laopu Gold (6181.HK): Ancient Craft Heritage, Luxury Operation” (https://pdf.dfcfw.com/pdf/H3_AP202408011638808680_1.pdf)

[4] McKinsey & Company - “The State of Luxury Goods in 2025” (https://www.mckinsey.com/industries/retail/our-insights/state-of-luxury)

[5] Joor - “Markup vs. Margin: A Guide for Wholesale Fashion Brands” (https://www.joor.com/insights/markup-vs-margin-a-guide-for-wholesale-fashion-brands)

[6] FashionNetwork - “How Will Laopu Gold Support Premiums Next?” (https://www.fashionnetwork.cn/share/4369.html)