đ° The only constant in the world is change. In an environment of great uncertainty or a market downturn, being stable and growing just a little bit can make you surpass most other peopleďź
đš $LAOPU GOLD(06181)$/ $Franco-Nevada(FNV)$/ $SPDR Gold MiniShares Trust(GLDM)$ offer exceptional opportunities to trade against current uncertainty.
đŁ Stay tuned, supercharge purchasing power through CashBoost!
Introduction
The US CPI data in January 2025 exceeded expectations across the board. In the future, the disturbance of inflationary pressures such as food items in the US may continue for some time. In addition to inflation, the US and Hong Kong stocks have also experienced continuous fluctuations in the past two weeks, coupled with the impact of the earnings season. The future trend is pretty confusing. The entire market seems to lack a clear storyline or there is such a stock that everyone thinks has a promising future.
Last few days, US technology stocks collectively weakened, dragging down the S&P and Nasdaq for three consecutive declines; the rise of Chinese stocks suddenly stopped, and Alibaba fell more than 10%.
Gold, as a safe-haven asset and a common tool for fighting inflation, has risen a lot in the past year. However, the repeated expectations of the Fed's interest rate cuts, the uncertain policies of the US government, the Russia-Ukraine war, the Middle East war and other volatile factors seem to be still not going away in the short term, and gold-related stocks still have opportunitiesďź
Gold! Gold! Gold!
The "Hermès" of the gold industry: $LAOPU GOLD(06181)$
With the basic satisfaction of material things, emotional value is becoming more and more expensive and what people desire, whether it is giving gifts to idols in the live broadcast room, metaphysics, "Pop Mart" or gold jewelry.
Company Overview
Established in 2016, $LAOPU GOLD(06181)$ is recognized by the China Gold Association as a pioneer in promoting the "Ancient Gold Craft" concept. The brand seamlessly blends traditional craftsmanship with modern design, offering high-end gold jewelry that embodies cultural significance.
Recent Stock Performance
The company's growth has been remarkable. In 2024, Laopu Gold made a significant debut on the Hong Kong Stock Exchange (HKEx) on June 28th, with its share price soaring over 70% on the first day of trading. By the end of 2024, the company was expecting a net profit of approximately 1.4-1.5 billion yuan, representing a year-on-year growth of about 236%-260%. Now, its stock price has reached 530 HKD, with a market capitalization of 90 billion HKD.
Growth Dynamics
$LAOPU GOLD(06181)$'s success can be attributed to its unique brand positioning. In a market where many gold-related products tend to be mass-produced, Laopu Gold caters to consumers who value traditional craftsmanship and are willing to pay a premium for products that are not only made of gold but also carry cultural and artistic value.We can also say that Laopu Gold satisfies those customers who are willing to pay for emotional value or brand value.
Revenue and Cash Flow: Since its IPO, Laopu Gold has demonstrated strong revenue growth, especially in the high-end jewelry segment. Its gross profit margin has remained above 40% for four consecutive years (the industry average is 20%-30%), mainly due to its high-end positioning and "one-price" sales model. The demand for these culturally rich products remains robust.
Market Valuation: Currently, Laopu Gold's market capitalization positions it as a mid-tier player within the jewelry industry. Despite a higher valuation, the company's strong brand influence and market potential suggest promising prospects for sustained growth.
Strategy: With its high-end positioning, Chinese style and capital narrative, Laopu Gold has benefited from the rise in gold prices and event-driven (such as opening stores in Singapore). It has launched the "Gold Health" series (such as antibacterial gold jewelry) to increase added value by combining the health trend. It has also deployed "Gold+Metaphysics" live broadcasts, with a single GMV of over 10 million. By focusing on product design and craftsmanship, Laopu Gold has introduced limited-edition and customized high-end collections, enhancing its brand premium.
Other: Through continuous integration of online and offline channels, Laopu Gold has amassed a substantial following in the Chinese market. Collaborations with various luxury platforms have expanded its sales avenues. Looking ahead, the company plans to enhance its global presence through partnerships with international brands.
Laopu Gold stands out in the gold jewelry sector, leveraging its unique brand narrative and premium market positioning to capture investor attention. Despite operating in a highly competitive environment, the company's commitment to innovation and a high-margin product portfolio underscores its potential for sustained growth.
The "Subscription King" of the Gold World: $Franco-Nevada(FNV)$
Mining stocks that do not mine, the risk-averse cash flow machines. As the world's largest royalty & streaming company, $Franco-Nevada(FNV)$ prepays funds in exchange for the right to share in the future output of mining companies. The light asset model enables it to enjoy leveraged benefits during the gold price rise cycle while avoiding mining cost risks.
Company Overview
Franco-Nevada is a Canada-based streaming and royalty company. Instead of directly engaging in mining operations, the company earns a percentage of revenue from production, which shields it from the operational risks typically associated with the mining sector. With a global portfolio spanning multiple continents, Franco-Nevada offers investors broad exposure to precious metalsâprimarily gold and, to a lesser extent, other metalsâwhile maintaining lower capital expenditure requirements and reduced production risk.
Recent Stock Performance
FNV's stock has shown steady strength, buoyed by rising gold prices and investor confidence in its resilient business model. The stock has been trading at robust levels, reflecting the marketâs recognition of its consistent cash flow and low-risk profile.
Growth Dynamics
$Franco-Nevada(FNV)$ âs reputation as a reliable income-generating asset makes it particularly attractive during periods of economic uncertainty.
Revenue and Cash Flow:Franco-Nevada consistently generates strong free cash flow from its extensive portfolio of royalty and streaming agreements, dividends have increased for 16 consecutive years. The companyâs revenue is driven by production volumes and rising commodity prices, which have provided a stable and predictable cash flow stream over multiple quarters. In addition, FNV has double compound leverage. For every 1% increase in gold prices, FNV's cash flow per share increases by 2.5% (compared to about 1.2% for ordinary mining companies).
Market Valuation:Despite its robust performance, Franco-Nevada trades at a moderate valuation relative to high-growth peers. Its forward EV/S (Enterprise Value-to-Sales) ratio reflects a market consensus that values stability and low operational risk over explosive, short-term growth.
Strategy:Franco-Nevada focuses on expanding its portfolio through strategic acquisitions and long-term agreements. By selectively partnering with high-quality mining operations worldwide, the company continuously enhances its asset base while mitigating exposure to individual project risks. This diversified approach not only supports current earnings but also positions the company for sustainable growth in varying market conditions.
Other:The companyâs disciplined financial management is evident in its regular dividend payments and share buyback programs, further enhancing shareholder value. And Institutional holdings accounted for 78% of total holdings.
Technically, FNVâs stock has broken through previous resistance levels and continues to attract steady institutional interest. While its price movements are less volatile compared to high-risk, high-growth stocks, the enduring strength of its fundamentals also offers significant potential.
The world's second largest gold ETF: $SPDR Gold MiniShares Trust(GLDM)$
$SPDR Gold MiniShares Trust(GLDM)$ can be called a geopolitical "thermometer" and is also one of the volatility arbitrage tools. GLDM offers investors a simple, cost-effective way to gain exposure to physical gold without the challenges of owning and storing metal directly. As an ETF that tracks the spot price of gold, GLDM has emerged as a favored vehicle for both retail and institutional investors seeking to hedge against market volatility and inflation.
Overview
GLDM is structured to mirror the performance of gold by holding physical gold bullion as its underlying asset. Each share corresponds to approximately 1/10 ounce of physical gold, tracking the gold price through gold bars certified by the London Bullion Market Association (LBMA). Managed by SPDR, this ETF provides direct exposure to the price movements of gold while maintaining low expense ratios and high liquidity. Its design ensures that investors can participate in the gold market with ease, enjoying a transparent and efficient investment vehicle that closely tracks the marketâs fluctuations.
Recent Performance
In recent trading sessions, GLDMâs share price has closely followed the upward trend in gold prices. This strong correlation to the physical gold market has attracted increased investor attention, especially in times of economic uncertainty. Affected by the Fed's interest rate cut expectations and the Middle East geopolitical conflicts, the gold price has risen by about 15% since June 2024, and GLDM has risen by 13.5% during the same period. In the past month, GLDM has risen by about 14.11%
Advantage
Net Asset Value (NAV) : $SPDR Gold MiniShares Trust(GLDM)$ âs NAV is directly linked to the market price of gold, ensuring that its value accurately reflects the underlying asset. This direct tracking makes it a reliable barometer for the gold market. The 60-day correlation with the US stock market is -0.3, which is an effective tool for diversifying portfolio risks.
Cost : Unlike traditional equities, GLDM isnât valued by revenue or earnings but rather by the value of its physical gold holdings. The management fee rate is 0.18%, which is significantly lower than similar products (such as GLD's 0.40%).Its low management fees enhance its appeal, making it a cost-efficient option for investors seeking gold exposure.
Liquidity: The primary strategy behind GLDM is to offer a liquid, straightforward investment that allows investors to benefit from the movements in gold prices. This approach provides a defensive play in turbulent markets, giving investors a hedge against inflation and economic downturns without the need for physical storage. Its average daily trading volume exceeds 20 million shares, and the assets under management exceed US$60 billion, making it the world's second largest gold ETF.
OtherďźGLDM has event-driven opportunities. During the Russia-Ukraine conflict, the daily fund inflow hit a record of US$500 million. Implied volatility often jumps during geopolitical crises.
GLDMâs robust liquidity and tight tracking of goldâs spot price make it an attractive tool for both short-term trading and long-term portfolio diversification. Its ease of trading allows investors to quickly adjust their exposure to gold in response to changing market conditions.
Summary
Although gold is a good safe-haven asset, a stronger dollar could push down its price. The risk ranking is: 6181> FNV> GLDM
$LAOPU GOLD(06181)$ : It has consumer attributes and is sensitive to gold prices, but whether it can truly become the "Pop Mart" or "Hermès" of the gold industry remains to be verified.
$Franco-Nevada(FNV)$ : Although FNV has solid cash flow and low operating risk, its valuation and liquidity may be affected during periods of overall market sentiment or economic recession.
$SPDR Gold MiniShares Trust(GLDM)$ : Pure gold price beta tool, suitable as a portfolio ballast.
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