\u3000\u3 China Vanke Co.Ltd(000002) 867 Chow Tai Seng Jewellery Company Limited(002867) )
The company’s revenue in 2021 was + 80% year-on-year, and the net profit attributable to the parent company was + 21% year-on-year. On March 11, 2022, the company released the annual performance express of 2021. The company expects to achieve an operating revenue of 9.16 billion yuan in 2021, a year-on-year increase of + 80%; The net profit attributable to the parent company was 1.23 billion yuan, a year-on-year increase of + 21%; The net profit of non parent company deduction was 1.19 billion yuan, with a year-on-year increase of 26%. There was a significant recovery after the epidemic. Quarterly, the company achieved a total operating revenue of 2.68 billion yuan in Q4 in 2021, a year-on-year increase of + 55%; The net profit attributable to the parent company was 220 million yuan, a year-on-year increase of – 26%, or the repeated epidemic may have a certain impact on the performance.
The substantial increase in revenue was mainly due to the increase in the sales of 2021h2 gold products and the adjustment of revenue recognition method. The company’s revenue increased significantly in 2021. On the one hand, it is the recovery of overall end consumption after the epidemic. On the other hand, it is also due to the significant growth of gold sales under the provincial representative mode and the adjustment of the company’s revenue recognition method of gold products in the second half of 2021.
The company launched the provincial representative model to stimulate the vitality of channels and accelerate the expansion of stores. The company launched the provincial agent model in 2021q3, and identified the third party with the advantages of customers and channel resources as the provincial agent to assist the company in achieving the goal of opening stores. At present, the implementation is progressing smoothly and has successfully helped the company reach more areas with shallow layout. By the end of 2021, the number of stores of the company had reached 4502, a net increase of 313 compared with the beginning of 2021 and a net increase of 145 compared with the end of the third quarter of 2021. Provincial agents can integrate high-quality customer resources in the market and stimulate the vitality of channel development. We expect that the company’s offline stores are expected to accelerate the expansion in the future.
Optimize the gold distribution model and increase the intensity of gold distribution: in 2021, the company will share part of the network access fee with the provincial agent platform, and increase the enthusiasm of the provincial agent platform to expand stores and gold distribution. From the perspective of operation, the provincial agent will accelerate the distribution and replenishment structure through the regional gold exhibition and distribution service center. At the same time, the company will also cooperate with the provincial agent platform, It will also provide financial support for franchisees’ gold procurement, improve capital turnover efficiency, reduce franchisees’ distribution pressure and increase the proportion of gold sales.
The company is committed to product innovation, closely following the consumption trend and flexibly combining products. In 2021, the company successively launched “love100 constellation Aurora diamond Master Series” and “extraordinary ancient method gold series” characteristic products. On the one hand, it improved its own inlaid product system, on the other hand, it also grasped the consumption trend of ancient method gold and other gold products, focusing on the target population of gold products Application scenarios and other elements have built six product lines of “happy childhood, romantic flowering, happy flower marriage, auspicious life, beautiful life and bright life”, and strengthened the R & D and promotion of fashion and cultural and creative gold.
Profit forecast and investment rating: the company is the leading enterprise in China National Gold Group Gold Jewellery Co.Ltd(600916) jewelry industry, with obvious scale advantages and relatively young brand, which is in line with the consumer positioning of the new era. Under the provincial agent model, the speed of opening stores and the strength of gold distribution have been significantly accelerated. Out of caution, we lowered the net profit attributable to the parent company in 202123 from 1.31/1.57/1.89 billion yuan to 1.23/14.5/1.73 billion yuan, a year-on-year increase of + 22% / 18% / 19%. The latest closing price corresponds to 15 / 13 / 11 times of PE in 202123, maintaining the “buy in” rating.
Risk tips: store expansion is not as expected, and franchise stores have standardized management and quality control risks
