2026 Annual Report Season | Old Shop Gold's Annual Sales Double: 16 Billion in Inventory, Can Brand Premiums Alone Safely Navigate the Gold Price Volatility Cycle?

On March 26, international gold prices continued to fluctuate, reaching a low of $4,415 per ounce. Amid the clamor of the gold market experiencing repeated fluctuations and a “roller coaster” trend, the high-end gold jewelry brand Lao Pu Gold released its performance report for 2025, presenting a picture that is starkly different from the short-term trends in gold prices.

The report shows that the company achieved sales of 31.375 billion yuan, a year-on-year increase of 220.3%; operating income reached 27.303 billion yuan, a year-on-year increase of 221.0%; and net profit was 4.868 billion yuan, a substantial year-on-year growth of 230.5%. At a time when the price of gold, a highly cyclical commodity, is experiencing violent fluctuations, Lao Pu Gold claims that the core driver of its performance growth is not the rise in gold prices, but brand premium.

High Inventory Risk Behind Performance Surge

The dramatic background of Lao Pu Gold’s performance explosion in 2025 is the significant upward shift in international gold prices, which undoubtedly increased the overall popularity of gold as an asset and expectations for its value preservation, objectively creating a favorable macro environment for all gold jewelry brands.

Lao Pu Gold’s management has repeatedly emphasized that its high growth logic is not limited to rising gold prices. The company’s founder and chairman Xu Gaoming stated, “Lao Pu has largely freed itself from its correlation with gold prices.” The company explained that the performance growth mainly stems from the continuous expansion of its brand influence, creating an absolute market advantage that drives substantial revenue increases for both online and offline stores.

Alongside its impressive performance, Lao Pu Gold’s inventory scale has soared. As of the end of 2025, the company’s inventory balance reached 16.044 billion yuan, a staggering increase of 292.5% compared to the 4.088 billion yuan at the end of 2024, marking a historical high since its listing.

The financial report explains that the inventory mainly consists of a sharp increase in raw materials, semi-finished products, and finished products, primarily to meet the increased product demand for the Spring Festival peak season. Due to rapid growth in same-store sales, combined with a large-scale store expansion and new store development plan in the second half of the year, the company needed to increase its input in advance to ensure supply, which also resulted in the inventory turnover days rising from 195 days to 216 days.

In a rising gold price cycle, high inventory signifies potential revaluation gains, but once gold prices enter a downtrend or experience violent fluctuations, such a massive inventory will become a heavy cost burden and source of impairment risk. This constitutes one of the core concerns of the market regarding Lao Pu Gold’s business model.

Brand Premium Strategy Builds a Moat

In response to the sharp question of “how to make money during a down cycle in gold prices,” Lao Pu Gold provided a clear answer at its performance briefing on March 24: brand premium.

Xu Gaoming confidently stated, “Do not think that Lao Pu can only make money when gold prices are rising; we can also make money when they are falling.” He elaborated that during a down phase in gold prices, the company will rely on its four core capabilities: product strength, brand power, channel strength, and customer service strength, to maintain a unique sales performance in the market.

Creating a domestic luxury brand in China that can compete with top international brands has always been Lao Pu Gold’s core narrative. The foundation supporting its premium capability is summarized in four aspects: the genuine consumer value and craftsmanship of the products; the cultural essence and aesthetic level contained in the products; a unique and recognizable after-sales service system; and a continuously iterated and optimized high-end channel network.

Corresponding to its core narrative is its offline channel layout (stores), which is the most direct embodiment of its premium strategy.

In 2025, Lao Pu Gold added 10 new stores and optimized and expanded 9 stores. By the end of the year, it had a total of 45 directly-operated stores in 16 cities worldwide, all located in 34 well-known high-end commercial centers with strict admission requirements, including SKP and Wanda Plaza, all adjacent to top international luxury brands.

This site selection strategy is viewed by management as “a core competitive advantage that distinguishes it from other brands.” To support channel expansion and corresponding stocking, Lao Pu Gold raised over 5.4 billion Hong Kong dollars through two placements in 2025, the vast majority of which is clearly earmarked for store expansion, optimization, and gold raw material reserves.

At the product level, Lao Pu Gold continues to deepen its moat with “ancient method gold.” In 2025, the company innovated its ancient gold craftsmanship, launching a new product that combines pure gold with lacquer ware and mother-of-pearl craftsmanship, reinforcing its recognition as “the number one brand in Chinese ancient handcrafted gold.”

Meanwhile, high-value customer groups have become its “ballast stone” against market volatility. The financial report shows that in 2025, Lao Pu Gold added 260,000 new members, bringing the total membership to 610,000, with a repurchase rate of 35%. Even more noteworthy is its single-store output efficiency; in 2025, the company’s same-store sales grew by 161% year-on-year, with sales performance in a single mall exceeding 3 billion yuan, which management claims has surpassed some top international luxury brands.

Premium Model Faces Market Reality Test

Although Lao Pu Gold has constructed a business logic centered on brand premium, attempting to detach performance from the direct correlation with gold price fluctuations, its operations are fundamentally tied to this special commodity, making its claimed “ability to traverse cycles” continuously face real market tests.

A direct piece of evidence is that even by adopting a “fixed price” model, the dramatic fluctuations in gold prices still impact the company’s gross profit margin. The financial report shows that in the first three quarters of 2025, despite the company having implemented two price increases, due to the continued rapid rise in gold prices, its gross profit margin still fell to about 37.6%; it was not until October, after the third price adjustment, that the gross profit margin returned to over 40%. This reveals the lagging nature of its pricing strategy adjustments relative to raw material price changes, and that cost transmission is not without pressure.

Currently, the gold market is in a highly uncertain environment. The recent rebound in gold prices has not alleviated market concerns; multiple commercial banks have issued risk warnings for precious metal trading, indicating significant price volatility and rising uncertainty. For Lao Pu Gold, with inventory as high as 16.044 billion yuan and an increase in inventory turnover days, if the trend of gold prices enters a downward trajectory or experiences prolonged wide fluctuations, its inventory management, cash flow, and profitability will face enormous pressure.

Xu Gaoming has projected sales performance of 19 to 20 billion yuan and net profit of 3.6 to 3.8 billion yuan for the first quarter of 2026 to showcase brand momentum, but this forecast still requires the final test of the market.

Lao Pu Gold’s business model heavily relies on continuously maintaining and enhancing its brand premium. This requires ongoing investment in product innovation, craftsmanship standards, customer service, and channel experience to build insurmountable barriers. Any misstep in quality, design, or service could damage its carefully constructed high-end image, thereby shaking the foundation of its premium.

As of the market close on March 26, Lao Pu Gold’s stock price was reported at 618 Hong Kong dollars per share, with a market capitalization of 109 billion Hong Kong dollars. Compared to last August when the stock price exceeded 1,100 Hong Kong dollars per share, it has now dropped over 40%. This also reflects investors’ cautious attitude toward whether the company can truly break away from the cyclical attributes of gold while remaining optimistic about its growth story.