\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 announcement of main business data from January to February 2022: from January to February 2022, the company realized an operating revenue of about 2.319 billion yuan, a year-on-year increase of + 203.11%; The net profit attributable to the parent company was about 218 million yuan, a year-on-year increase of + 36.01%.
Key investment points:
From January to February, the peak consumption season + high industry boom maintained, and the company achieved high performance growth. January February 2022 is the peak consumption season. According to the China National Gold Group Gold Jewellery Co.Ltd(600916) Association, this year’s Spring Festival holiday is 7 days, and the national gold consumption has increased by 13% year-on-year; During the whole month before and after the Spring Festival (from mid January to mid February), the total sales volume of gold jewelry was the same as that in 2021 with strong sales, and the high boom of gold has continued to this day. Thanks to the steady rise of gold price and the continuous hot of gufajin, the company’s overall growth from January to February was bright. In the short term, due to the high price of gold caused by the conflict between Russia and Ukraine and the repeated outbreak of epidemic in various regions in March, the terminal consumption may be affected to some extent. The company will adopt hedging and other hedging measures to deal with the fluctuation of gold price to reduce the impact, and is expected to achieve steady growth after recovery.
Impairment provision and winter epidemic dragged down Q4 performance. The net profit attributable to the parent company of 2021q4 was – 26.08% year-on-year. First, the impact of bad debt provision. The total impairment / bad debt provision of 2021q4 company reached 60-70 million yuan. Secondly, the outbreak of the epidemic affected the effect of taking orders in winter, and the sales of mosaic business with high gross profit were greatly affected. If bad debt provision is not considered, the company’s profit is flat year-on-year.
It is expected that the provincial representative model will be better and better in 2022. Some newly established provincial representatives need some time to form teams, train and run in with the company, and the effect is not fully apparent in 2021. In 2022, the company will strengthen and improve the provincial representative cooperation mechanism, complement and match the provincial representative capacity with the company’s capacity, and improve the division of labor mode. It is expected that the running in problem will be solved in 2022, and the effect will appear in q2-q3, opening a new round of high-quality growth.
Investment suggestion: the company will strive to improve the running in effect with provincial agents, further improve the cooperation mode, and improve the speed of channel expansion and gold shipments. We expect that from 2021 to 2023, the company will realize an operating revenue of RMB 9.155/16.057/19.626 billion and a net profit attributable to the parent of RMB 1.228/14.96/1.790 billion, corresponding to 15.12/12.41/10.37xpe, maintaining the “buy” rating.
Risk tip: the epidemic situation repeatedly affects the recovery rhythm of the industry; Store expansion speed is lower than expected; Industry competition
