Zhou Du’s core view:
Gold jewelry continues its high-profile style. According to the data released by China National Gold Group Gold Jewellery Co.Ltd(600916) Association, the actual consumption of gold in China in 2021 was 112090 tons, an increase of 36.53% compared with the same period in 2020 and 11.78% compared with the same period in 2019 before the epidemic. In the short term, under the situation of international turbulence, investment risk aversion has pushed up the price of gold; In the long run, the upgrading of the ancient process on the product side will stimulate terminal consumption, and the reform of changing the one-time price of gold to the weight of gold on the price side will promote the transparency of the pricing mechanism. With the head brand actively expanding the sinking market, the market concentration is expected to continue to improve.
Market review last week:
Last week (202202.21202202.25), the retail trade (CITIC) index fell 2.16%, which was greater than the CSI 300 index by 0.49pct. Among the 30 first-class industries of CITIC, the commerce and retail sector ranked 19th. Among the sub industries of the retail sector, the top sub industries were jewelry, watches and trade III, with an increase of 2.60% and 0.48% respectively, and the other sub industries fell. The quantile of PE in commercial retail industry is greater than that in Shanghai and Shenzhen 300. At present, the PE (TTM) of commercial retail industry is 88.47, which is 97.15% from small to large since 2005; Shanghai and Shenzhen 300pe (TTM) is 13.17, with a quantile of 43.66%.
Key recommended companies this week:
Chow Tai Seng Jewellery Company Limited(002867) : under the background of the implementation of provincial representative model + common prosperity, the company develops new momentum and maintains the buy rating. The moat of the company lies in its obvious channel advantages and strong profitability of terminal channels. In the future, with the help of the provincial generation model, the power to expand stores is sufficient, which is expected to achieve nationwide coverage and occupy an obvious card position advantage in the low-line market. The company benefits from the release of wedding market demand brought by consumption recovery in the short term and the dividend of leading brands brought by the improvement of industry concentration under the background of common prosperity + the rise of national tide in the long term. The potential growth point lies in the rapid development of e-commerce business and the second growth curve of jewelry sub brands. The company has always maintained a high roe level of about 20%, which is due to its strong profitability. We expect the growth rate of the company’s revenue from 2021 to 2023 to be 79%, 34% and 24% respectively, and the growth rate of net profit attributable to the parent company to be 39%, 24% and 17% respectively. The corresponding PE valuations are 15x, 12x and 10x respectively, maintaining the buy rating.
Investment suggestions:
Maintain the “overweight” rating of the commercial retail industry.
Investment main line 1: gold jewelry continues its recovery trend and high outlook. We continue to recommend Chow Tai Seng Jewellery Company Limited(002867) , and we suggest paying attention to Chow Tai Fook and Lao Feng Xiang Co.Ltd(600612) .
Investment main line 2: in the traditional and new retail field, the business form of warehousing members is in full swing. It is suggested to pay attention to the positive layout of warehouse store business forms such as HEMA (Alibaba), Yonghui Superstores Co.Ltd(601933) , Jiajiayue Group Co.Ltd(603708) . Tiktok new retail business, live broadcast and shop self seeding rapid development, community group purchase presents Matthew effect, suggest attention to trembling voice business, Alibaba, spelling a lot.
Investment main line 3: the background of common prosperity, the current situation of superimposed traffic peaking, and the fierce competition among Internet enterprises. It is suggested to pay attention to JD group, which has low regulatory risk, focuses on the performance efficiency with retail as the king, and builds a moat with the advantages of supply chain.
Risk tips:
Repeated outbreaks; Macroeconomic depression; Industry competition intensifies.
