\u3000\u3 China Vanke Co.Ltd(000002) 867 Chow Tai Seng Jewellery Company Limited(002867) )
Event:
Chow Tai Seng Jewellery Company Limited(002867) released the performance express for 2021: in 2021, the company is expected to realize an operating revenue of 9.155 billion yuan, yoy + 80.07%; The net profit attributable to the parent company is 1.228 billion yuan, yoy + 21.21%; In 2021q4, it is expected to realize an operating revenue of 2.682 billion yuan, yoy + 54.55%, Mom – 27.21%; The net profit attributable to the parent company was 223 million yuan, yoy-26.08%, mom-43.79%. The performance is in line with expectations.
Key investment points:
The revenue of gold category increased significantly. According to the National Bureau of statistics, the retail sales of gold, silver and jewelry in 2021 was 304.1 billion yuan, yoy + 29.80%, and the industry was booming throughout the year; Among them, the retail sales in the fourth quarter was 80.710 billion yuan. Due to the early spring festival in 2022, some year-end consumption was delayed to January. Under the condition of high base in the same period last year, the growth rate decreased, but it was still + 4.95% year-on-year. The company has gradually made efforts in gold products. After Q3 introduced the provincial agent model in 2021, some gold products were sold on credit through the provincial agent exhibition model and included in the statement according to the wholesale model, with a significant year-on-year increase in revenue; At the same time, the overall high boom of gold last year led to hot gold sales.
In 2022, the high outlook of gold is expected to continue, and the implementation of provincial agents will boost the growth of gold shipments. 1) The gold price has remained strong for a long time due to international political and epidemic uncertainties. The new process gold has further penetrated and rejuvenated the vitality of gold. The high outlook of gold in 2022 is expected to continue. At present, the uncertainty of the international epidemic and political situation is high, and the gold price remains relatively strong for a long time, which helps to form high and stable expectations and boost gold consumption. New processes such as Gufa gold and 5g gold have been popularized continuously, broadening the penetration boundary of gold products and creating incremental demand. In the second half of 2021, the growth of gold has changed from price driven to volume driven. According to the China National Gold Group Gold Jewellery Co.Ltd(600916) Association, the national gold consumption increased by 13% year-on-year during the seven-day Spring Festival holiday this year. 2) The provincial agent model promotes the improvement of gold shipments. The company uses the provincial representative to carry out the gold exhibition and sales business, and gives the platform royalties linked to the gold sales to encourage the provincial representative to promote the gold shipment, which greatly improves the local distribution efficiency of gold products. With the further implementation of the provincial representative in 2022, the company’s gold product sales are expected to increase significantly.
The provincial representative promotes the acceleration of exhibition stores quarter by quarter, and the opening speed increases after the model is mature. After the introduction of the provincial representative, the company fully tapped the local resources of the provincial representative, and promoted the acceleration of Franchise Exhibition stores by sending the provincial representative the task of separating stores; After the provincial agent provides risk guarantee, the company can provide greater financial support for franchisees and promote good cooperation with franchisees. By the end of 2021, the company had 4502 stores, with a net increase of 313 stores in the whole year, a year-on-year increase of 75.84%. The pace of opening stores has accelerated quarter by quarter. Since 2021q3, the speed of opening stores has increased significantly. There are 2 net increases in Q1, 66 net increases in Q2, 100 net increases in Q3 and 145 net increases in Q4. The provincial representative of the company is gradually implemented, and the improvement of store opening speed is expected to be further reflected in 2022.
Investment suggestion: the company introduces the provincial representative model, the channel expansion returns to the fast lane, and the gold shipment is expected to be further improved. Under the logic of mutual feeding of channel brands, brand penetration and market competitiveness will be further improved, and it is expected to achieve high performance growth. We expect that from 2021 to 2023, the company will realize an operating revenue of 9.155/17.580/21.468 billion yuan and a net profit attributable to the parent of 1.228/15.88/1.904 billion yuan, corresponding to 15.12/11.69/9.75 XPE. For the first time, give a “buy” rating.
Risk tip: the epidemic situation repeatedly affects the recovery rhythm of the industry; Store expansion speed is lower than expected; Industry competition intensifies; The effect of sub brand integration is less than expected; The risk of insufficient store control affecting brand reputation.
