\u3000\u3 China Vanke Co.Ltd(000002) 867 Chow Tai Seng Jewellery Company Limited(002867) )
Performance review
The company’s revenue from January to February 2022 was + 203.11% year-on-year, and the net profit attributable to the parent company was + 36.01% year-on-year. On March 14, 2022, the company released the operating data from January to February 2022. From January to February 2022, the company realized an operating revenue of 2.319 billion yuan, a year-on-year increase of + 203.11%; The net profit attributable to the parent company was 218 million yuan, a year-on-year increase of + 36.01%, and the business started well.
During the Spring Festival, the sales of gold jewelry market recovered, and the consumption of gold products ushered in a small peak. During the Spring Festival in 2022, the gold jewelry industry ushered in a small consumption peak. Among all categories, gold jewelry products are more popular with consumers According to the China National Gold Group Gold Jewellery Co.Ltd(600916) Association, during the Spring Festival holiday, the national gold consumption increased by 13% year-on-year, among which ancient gold jewelry, hard full gold jewelry and gold bars invested in the year of the tiger are the key areas concerned by consumers. The main reasons for the strong sales of gold and jewelry are as follows: 1) the Chinese New Year is early in 2022, and some regions are affected by the epidemic in the early stage, which makes the consumer demand accumulate until the Spring Festival; 2) The year of the tiger itself belongs to the lunar new year, and the gold ornaments of the lunar new year are particularly popular; 3) The reduction in the proportion of local Chinese New Year celebrations in 2022 has also promoted the recovery of consumption to a certain extent.
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. According to the performance express, the company’s revenue in 2021 was 9.16 billion yuan, 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 deducted from non parent company was 1.19 billion yuan, with a year-on-year increase of 26%. The company’s performance is driven by many factors: 1) the change of provincial generation superposition revenue recognition method drives the gold sales volume to increase by 40% year-on-year in the second half of 2021; 2) Q4 epidemic is repeated, and franchisees and orders will be blocked.
The provincial agent model will accelerate the expansion of stores and improve the efficiency of gold distribution. The provincial agent model will be effective in 2022. The company will assist the company in accelerating the expansion of stores through the provincial representative’s customers and channel resources. By the end of 2021, the number of stores of the company had reached 4502. In addition, the provincial representative also improves the distribution efficiency through the regional gold exhibition and distribution service center. At the same time, the company also provides financial support for the gold procurement of franchisees and increases the distribution of gold. After the provincial representative is launched, it needs a certain running in period. At present, the implementation is progressing smoothly. In 2022, the company will comprehensively strengthen the provincial representative incentive mechanism and cooperation mode. The company expects that the provincial representative mode will be effective in 2022, and the headquarters, provincial representatives and franchisees will complement each other.
In 2022, the company will continue to build brands and expand channels. In terms of brand, in 2022, the company will continue to make efforts in the research and development of gold and inlaid products and digital marketing, improve the gold system and distribution model, and increase the strength of gold distribution. At the same time, it will also explore the popular models of inlaid products and cooperate with top designers to enhance the added value of the brand. In terms of channels, brand building will enable channel expansion. While continuing to develop first and second tier cities, it will also accelerate the capture of sinking markets through provincial representatives.
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 mode, the speed of opening stores and the strength of gold distribution have been significantly accelerated. We maintain the company’s net profit attributable to the parent company of RMB 1.23/14.5/1.73 billion in 202123, 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” rating.
Risk tips: store expansion is less than expected, and franchise stores have standardized management and quality control risks.
