\u3000\u3000 Chow Tai Seng Jewellery Company Limited(002867) (002867)
Investment logic
Middle and high-end jewelry head brand, with bright growth in gold business: the company’s main business is inlay and plain gold. Inlay is a traditional advantageous category. Plain gold has increased rapidly in recent years, with 1h21 revenue of 1.2 billion yuan (+ 86%), accounting for 5pct to 44%, and super inlay has become the largest category. The autumn order meeting of 21 years will launch the extraordinary gufajin series, hoping to share the growth dividend of gufajin. Gufajin has strong fashion, is used for large jewelry, and the processing cost per gram is high. It meets the consumption upgrading needs of Yueji. It has accounted for 16% of the sales of gold jewelry in 20 years (compared with 17 years + 12pct).
The opening of stores under the provincial agent model has accelerated, and the income of single stores has increased: the company promoted the provincial agent model and expanded stores in August of 21. The net number of stores opened in q1-3 is 8 / 68 / 105, and 4119 as of Q3; Under the introduction of provincial service providers and exhibition mode, franchisees’ procurement is included in the on balance sheet revenue, and the apparent revenue increases rapidly. The franchise revenue of 1-3q21 is 4.64 billion yuan, + 133%; Regardless of the impact of mode change, the income of 1h21 franchise stores increased by 73.7% under the low base, close to the level of 1h19, and the operation quality was improved; The provincial agent model slowed down the turnover of 3q21 accounts receivable and accelerated the inventory turnover.
Over the past 21 years, the industry has experienced a high boom, with the share of head brands increased and the brand strength highlighted: the retail sales of gold jewelry 21q1-4 increased by 76% / 31% / 13% / 5% respectively, a compound increase of 9% / 8% / 10% / 9% compared with the same period in 19 years, of which the gold price increased by 15% / 14% / 6% / 5%. It can be seen that 21h1 is mainly driven by the rise of gold price, and the volume and price of H2 have a single digit growth. It is expected that the volume of 22h1 is expected to recover further, including wedding needs, gift giving and self pleasing; In the medium and long term, the old trees bloom new flowers, and the consumption upgrading of Yueji starts another spring in the industry (high-line to low-line cities, coastal to inland areas). 2) Pattern: Cr5 has increased from 14.3% in 16 years to 21% in 20 years. Leading companies have advantages in offline store expansion / single store revenue growth, online multi platform layout / self broadcast proportion and other aspects, with strong comprehensive operation ability and constant strength.
Profit forecast and investment suggestions
The company’s profit and operating indicators are better than those of the same industry. In the future, we hope to benefit from the provincial generation model, accelerate the expansion of stores, refine the operation of stores + upgrade the gold category, improve the unit price and help the growth of single store revenue. It is estimated that the company’s revenue in the 21st-23rd year will be 9.70/13.06/16.25 billion yuan, an increase of 91% / 35% / 24% at the same time. The net profit attributable to the parent company was 1.37/16.5/1.97 billion yuan, with an increase of 35% / 21% / 19%, and EPS was 1.25/1.51/1.80 yuan. Give 15 times PE for 22 years, target price 22.62 yuan / share, and give “buy” rating for the first time.
Risk tips
Terminal retail is weak, industry competition intensifies, accounts receivable / inventory turnover slows down, and sales restrictions are lifted.
