A Laopu Gold retailer in Tsim Sha Tsui, Hong Kong.Shanshan Kao/Forbes Asia
Xu Gaoming, who began his profession as a clerk in a neighborhood fisheries bureau within the Eighties, is China’s latest billionaire after the profitable itemizing of his Laopu Gold jewellery firm in Hong Kong final week.
The entrepreneur, 59, has amassed a wealth of $1 billion, based on Forbes estimates. His internet value relies on a stake in Laopu Gold, identified in China because the “Hermès of Gold Jewellery” for the frilly designs of its earrings, necklaces and bracelets, and their lofty costs. Laopu Gold shares have surged as a lot as 97.5% because the firm raised HK$787.7 million ($100.8 million) by promoting 19.5 million shares at HK$40.5 a chunk final week.
The Beijing-based firm stated it is going to use the raised funds to extend its model consciousness and develop internationally.
Shanshan Kao/Forbes Asia
Its jewellery options distinctive craftsmanship, imperial patterns and such Chinese language cultural parts corresponding to gourds, or hu lu, an emblem of each success and safety within the native tradition. Certainly one of its bracelets retails for as a lot as 44,680 yuan ($6,145).
With gold costs surging, some rich clients take into account Laopu Gold’s merchandise as investments. The corporate noticed gross sales greater than double to three.2 billion yuan ($437 million) in 2023 from 2022, based on its prospectus. Revenue jumped nearly 5 occasions to 416.3 million yuan.
Laopu Gold merchandise are supplied on Alibaba and JD.com, however most gross sales are at 33 brick-and-mortar outlets in 14 Chinese language cities.
“Laopu Gold positions itself as a distinct segment model within the gold-based jewellery market,” says Blair Zhang, a Shanghai-based senior luxurious and style analyst at analysis agency Mintel. “The corporate attaches a variety of significance to sustaining its high-end picture. It focuses on fairly sophisticated craftsmanship to construct a differentiation technique.”
Laopu Gold didn’t reply to e-mailed requests for remark.
Born in 1964 in Hunan Province, Xu acquired a job within the fisheries bureau within the metropolis of Yueyang, close to scenic Dongting Lake in southeastern China, when he was about 20 years outdated, based on native media stories. He did a correspondence course from Huazhong Agricultural College and acquired a level in 1988, based on the corporate’s prospectus.
He labored for the town authorities for greater than ten years. In 1995, Xu launched a startup to promote vacationer souvenirs and different culture-related merchandise, based on native media stories. He established Laopu Gold in 2016, specializing in what the corporate describes as “heritage gold jewellery” in its prospectus.
Two of Xu’s relations are on the board of administrators. His son, Xu Dongbo, is a shareholder however doesn’t seem to have any administration position, based on the prospectus. The corporate had beforehand hoped to record in mainland China, however two efforts in 2021 and 22 didn’t pan out after native authorities requested why its revenue margins have been a lot greater than the trade common and about some doubtlessly problematic transactions with associated events.
Laopu Gold stated in its prospectus that it had resolved these two points. It additionally attracted outstanding traders together with Chinese language net large Tencent and China Southern Asset Administration for its itemizing in Hong Kong.
However Laopu Gold faces steep competitors. Chow Tai Fook, the jewellery model run by Hong Kong billionaire Henry Cheng, is a market chief as a result of it covers all product segments, Zhang says, and is attempting to win over extra youthful customers with fashionable designs.
Zhang Yi, founding father of Guangzhou-based consultancy iiMedia Analysis, says different points Laopu Gold faces embrace rising materials and lease prices, which could eat into earnings. What’s extra, since gold costs can’t surge eternally, customers may cease contemplating jewellery a very good funding choice sooner or later.
When that day comes, Zhang says the corporate should depend on its distinctive designs to maintain curiosity up. He likened Laopu Gold’s merchandise to antiques, mentioning that it’s the cultural parts which have buoyed their costs through the years.
“When it comes to cultural heritage, I believe Laopu Gold has constructed up its skills on this regard already,” says Zhang. “Thus far, the corporate actually has developed a fairly profitable differentiation technique.”