\u3000\u3 China Vanke Co.Ltd(000002) 867 Chow Tai Seng Jewellery Company Limited(002867) )
Events
The company released the performance express for 2021: the revenue in 2021 was 9.155 billion yuan (+ 80.1%), the net profit attributable to the parent company was 1.228 billion yuan (+ 21.2%), and the net profit not attributable to the parent company was 1.193 billion yuan (+ 26.2%); EPS (basic) is 1.13 yuan / share (+ 21.5%), and ROE (weighted) is 21.39% (+ 1.24pct).
Brief comment
Under the provincial representative mode, the new gold wholesale income will achieve a significant increase in revenue in 2021. In 2021, the company’s revenue and net profit attributable to the parent company increased by 80.1% and 21.2% respectively. The significant growth of revenue was mainly due to the rapid growth of gold wholesale revenue due to the company’s gold exhibition and sales business through provincial service centers (provincial agents) in the third quarter of 2021.
Affected by repeated outbreaks and impairment provision, 21q4 performance declined. The revenue of 21q1 / Q2 / Q3 increased by 70.7% / 63.9% / 119.9% year-on-year, and the revenue of 21q4 was 2.682 billion yuan (+ 54.6%). The growth rate of revenue slowed down month on month, mainly due to the epidemic situation in Henan, northwest, Beijing Tianjin Hebei, Jiangsu and Zhejiang, which impacted offline terminal consumption and affected the willingness of franchisees to take goods; The net profit attributable to the parent company of 21q4 was 223 million yuan (- 26.1%), mainly due to 1) the company’s provision for impairment of about 60-70 million yuan, which had a significant impact on the net profit, 2) the winter ordering meeting and franchisee conference, which made a great contribution to the performance of the fourth quarter, suffered an epidemic, and the number of franchisees reduced, making the goods taking of mosaic products with high gross profit lower than 20q4. According to the company’s announcement, after excluding the influence of non operating factors, the company’s gross profit and net profit deducted in 21q4 are basically the same as that in 20q4.
Provincial agent landing + product innovation, and the gold category increased significantly. In the third quarter of 2021, the company officially launched the provincial representative model, which encouraged the enthusiasm of provincial representative gold distribution by giving platform royalties linked to gold sales. Among them, the wholesale income of 21q1-3 company joining in gold was 2.456 billion yuan (+ 848.2%). In addition, the company applies the mature research and development ideas of inlaid products to the research and development of gold products. The new “extraordinary ancient method gold” series will be launched at the autumn ordering meeting in September 2021. The company will build six product lines of “one child, two flowers and three students” around the target population and application scenarios of gold products, and strengthen the research and development and promotion of fashion and cultural and creative gold.
The expansion of stores has been accelerated, with a net increase of 313 stores throughout the year, and the pace of subsequent opening of stores is expected to accelerate. By the end of 2021, the company had 4502 stores, with a net increase of 313 stores in the whole year (corresponding to a net increase of 2 / 66 / 100 / 145 in Q1, Q2, Q3 and Q4 respectively). Under the provincial representative mode, the regional provincial representatives will help the company expand local high-quality channels and promote franchise stores. In 2021, some provincial representatives are still in the running in period, and the effect of 21q4 has not been highlighted; In 2022, the company will accelerate the division of labor, cooperation and high integration with provincial representatives. It is expected that the effectiveness of 22q2-q3 will gradually appear, and the subsequent store expansion is expected to accelerate.
The operating data from January to February 2022 are beautiful, and the ancient method and 5g process are expected to further improve the demand for gold accessories. According to the preliminary accounting of the company, from January to February 2022, the company’s revenue was 2.319 billion yuan (+ 203.11%), and the net profit attributable to the parent company was 218 million yuan (+ 36.01%). Among them, Valentine’s day in 2022 is relatively separated from the Spring Festival (Valentine’s day in 2021 is the third day of the first month), which plays a positive role in the continuity of gold consumption. According to the “2022 China National Gold Group Gold Jewellery Co.Ltd(600916) Market Outlook” of the World Gold Council, the China National Gold Group Gold Jewellery Co.Ltd(600916) demand consumption will achieve a “good start” in 2022. From New Year’s Eve to the Lantern Festival, the China National Gold Group Gold Jewellery Co.Ltd(600916) consumption will increase by 12% year-on-year. With the improvement of gold technology (such as Gufa gold, 3D hard gold, 5g gold, etc.), the complexity and beauty of products are improved, which is expected to further promote the demand for gold accessories.
Profit forecast: Based on the company’s new gold wholesale income, the company’s revenue from 2021 to 2023 is expected to be 9.04 billion yuan, 13.01 billion yuan and 15.04 billion yuan, with an increase of 77.8%, 44.0% and 15.5% respectively; The net profit attributable to the parent company was 1.24 billion yuan, 1.43 billion yuan and 1.63 billion yuan, with an increase of 22.6%, 15.4% and 13.8% respectively, corresponding to 13, 12 and 10x PE in 21-23 years, maintaining the “buy” rating.
Risk tip: the consumption boom is less than expected, and the promotion of provincial generation model is less than expected
