Core conclusion
After the outbreak, gold consumption started the recovery cycle due to the double vibration of supply and demand: 1. The normal return of market demand. Affected by the epidemic, gold consumption demand was deferred, and the year-on-year growth rate of Q3 in 2020 exceeded the growth rate of total social income, opening the trend of rapid recovery. In addition, gold jewelry consumption in 2020q2 / Q3 / Q4 achieved continuous positive growth month on month, with 25.8% / 16.7% / 9.1% respectively; 2. The periodic rise in gold prices boosted investment purchases. In 2020, affected by the epidemic at home and abroad, the tense economic situation stimulated the risk aversion attribute of gold, investment purchases recovered, and the rise of gold price exceeded 400 yuan / g; 3. Brand side process innovation to comply with the rise of national tide. The gold ornamentation and rejuvenation brought by the new technology will become a favorable support for a new business cycle. Overall, the sales of gold, silver and jewelry above the Q3 and Q4 limits increased by 8.7% / 14.4% year-on-year in 2020 and 28% year-on-year in 2021; 2019-2021 growth rate of retail sales of gold, silver and jewelry cagr8 03%。
The boom continued until the Spring Festival and Valentine's Day sales in 2022, strengthening the optimistic expectation of the future market. After the recovery momentum in 2021, gold consumption hit another record in the beginning of 2022. According to industry research, the sales volume of several gold shopping malls in Beijing increased by 30% year-on-year in the seven days of the Spring Festival in 2022; From the first day of the first month to the fifteenth day of the first month, the sales of gold jewelry increased by 12% year-on-year. According to the analysis, we believe that there are mainly the following reasons: 1) a relatively serious epidemic occurred in Xi'an in December. In addition, covid-19 confirmed cases occurred in about 20 provinces across the country, and the overall consumption was restrained at the end of the year; 2) The number of people returning home for the Chinese new year increased year-on-year, driving the recovery of overall consumption. According to the data of the Ministry of communications, as of February 7, the Spring Festival transportation had sent 539 million passengers, an increase of about 42.8% over the same period in 2021. 3) In addition, Valentine's Day is separated from the Spring Festival, which is conducive to the continuity of gold consumption. Valentine's day in 2021 is located on the third day of the first month, which coincides with the peak consumption of the Spring Festival, while Valentine's day in 2022 is located on the 14th day of the first month, which is conducive to the Spring Festival consumption and maintains the sustainability of the overall gold consumption. 4) Gufajin's consumption boom superimposed the attributes of the Spring Festival peak season to support the consumption boom in the beginning of the year. Among the buyers of this year's Spring Festival, the post-90s and post-00s account for more than 20%.
Head brands are expected to benefit and continue to increase their market share. In recent years, the concentration of jewelry industry has been increasing. According to Euromonitor data, CR10 of China's jewelry industry has increased from 17.2% in 2016 to 25.5% in 2020. We expect that the concentration of China's jewelry industry will continue to increase in the future, mainly for the following reasons: 1) the overall supply of the jewelry industry is relatively stable and the entry threshold is low, but the quality and authenticity of products are difficult to judge. Consumers need big brands for credit endorsement. 2) The demand for Guochao makes consumers prefer head brands with stronger brand design ability and supply chain advantages. 3) The optimization of digital management ability of head brand and the implementation of provincial representative model can strengthen the management of franchisees, fill the defects of cross regional management and promote the expansion of stores in the sinking market.
Suggestions: Chow Tai Fook, Chow Tai Seng Jewellery Company Limited(002867) , Guangdong Chj Industry Co.Ltd(002345) , Lao Feng Xiang Co.Ltd(600612) , China National Gold Group Gold Jewellery Co.Ltd(600916)
Risk warning: repeated outbreaks at home and abroad; The price of gold fluctuates violently; Industry competition intensifies
