Laopu Gold has hit a valuation of over 5.2 billion yuan ($735.1 million) after the completion of its first and only private financing round.
The Chinese gold jewellery brand, which uses ancient Chinese gold craftsmanship techniques in jewellery making, secured 225 million yuan ($31.8 million) in the funding round, which is also the firm’s pre-IPO financing. Laopu Gold is moving towards an initial public offering (IPO) in Hong Kong and filed for a public listing earlier this month.
Its pre-IPO deal was led by BA Capital, a Chinese private equity (PE) firm investing in high-growth consumer brands, with the participation of a fund managed by Fosun International’s equity investment unit Fosun Capital.
After the deal, BA Capital picked up a combined stake of 3.35% in Laopu Gold through two subsidiaries. Fosun Capital’s investment gave it an equity interest of 0.96%.
Laopu Gold, founded in 2009, is positioned as a high-end brand focusing on the design, manufacturing, and sale of heritage gold jewellery. It operates 29 boutiques in commercial centres across Chinese cities like Beijing, Guangzhou, Shenzhen, Hangzhou, Chengdu, and Macau.
The company hired China Securities as its sole sponsor and filed the prospectus on November 10, seeking a public listing on the main board of the Hong Kong Stock Exchange. It has yet to disclose how much it intends to raise from the public share sale.
A rapid increase in demand for high-quality products, especially among the young generation in China, has contributed to an accelerated expansion of the market size for heritage gold jewellery.
The country’s overall sales revenue of heritage gold jewellery is expected to reach about 202.5 billion yuan ($28.6 billion) by 2027 from 97.3 billion yuan in 2022, representing a compound annual growth rate (CAGR) of 15.8%, according to a Frost & Sullivan report cited in its prospectus.
Laopu Gold posted strong revenue growth in the past few years despite the adverse impact of the pandemic.
Its revenue was close to 1.3 billion yuan ($183.4 million) in 2022, versus 895.5 million yuan in 2020 with a CAGR of 20.2% in the three years. In the first half of 2023, the firm posted a revenue of over 1.4 billion yuan ($197.5 million), which already surpassed last year’s total, its prospectus shows.
Its net profit stood at 196.8 million yuan ($27.8 million) in H1 2023.