\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 612 Lao Feng Xiang Co.Ltd(600612) )
Revenue / performance increased by 14% / 18% in 2021. The company released the annual report of 2021. The annual revenue was + 13.5% to 58.69 billion yuan, the gross profit margin was - 0.4pct to 7.8%, the sales expense ratio was flat to 1.4%, the management expense ratio was - 0.1pct to 0.7%, the net profit attributable to the parent was + 0.1pct to 3.2%, the net profit attributable to the parent was + 18.3% to 1.88 billion yuan, and the single Q4 revenue / performance was + 13% / + 7% to 89 / 380 million yuan. The overall performance was in line with expectations.
2022q1 revenue / non deduction performance increased by 7.2% / 7.5%. The company's Q1 revenue was + 7.2% to 18.44 billion yuan year-on-year, the gross profit margin was + 0.2pct to 7.9%, the sales expense ratio was - 0.1pct to 1.5% year-on-year, and the management expense ratio was flat at 0.6%. Due to the significant increase in the company's asset disposal income in the same period, the base was high, and the net profit attributable to the parent in 22q1 was - 37.3% to 410 million yuan year-on-year, and the net profit attributable to the parent after deduction was + 7.5% year-on-year. According to our tracking, from January to February 2022, thanks to the increase of festival demand and the rise of gold price (as of the beginning of March, the closing price of au99.99 increased by about 4% compared with the beginning of the year), the gold market continued to be hot. However, since March, the outbreak of epidemic in some areas has hindered terminal sales, and the retail sales of gold, silver and jewelry commodities of units above the quota decreased by 18% year-on-year in March 2022.
The product system was improved, the brand influence was enhanced, and the jewelry business grew steadily. As the first year of the company's 14th five year plan, 2021 saw steady progress in various businesses. During the year, the company's jewelry business achieved a revenue of 46.86 billion yuan, a year-on-year increase of 23%, and the gross profit margin decreased 1PCT to 9%. We judged that it was mainly due to the increase in product promotion. 1) Product side: the company continued to improve its product structure and launched a full range of new products such as "Fengxiang Yushi 2" wedding series full gold kit and "Fengzhi series" diamond jewelry, so as to strengthen its market competitive advantage. The annual product renewal rate of the company was more than 25% and the sales of new products reached 13.2 billion yuan. 2) Brand side: the company strengthened brand building, signed famous artist Chen Shu as the brand spokesperson to show consumers the young and fashionable brand image. At the same time, the company improved the influence of the brand among young consumers by relying on new media such as wechat official account and Tiktok. By the end of the year, the total number of members in Lao Feng Xiang Co.Ltd(600612) shanghai had exceeded 400000, with an increase of 200000 throughout the year. 3) Channel side: by the end of 2021, the company had 4945 stores, a net increase of 495 over the beginning of the year (direct sales + 6, franchises + 489). The company continued to strengthen market expansion and optimize the operation efficiency of stores from multiple dimensions such as commodity layout and store services. In 2022, the company plans to add at least 300 stores, and the image of self operated stores will develop to theme stores such as "Fengxiang wedding".
The "double hundred" reform has been vigorously promoted to lay the foundation for sustainable, high-quality and efficient development. In 2021, the company selected 14 subsidiaries to promote and implement the professional manager system, stimulate the endogenous development power of the enterprise and lay the foundation for the long-term development of the company. In 2022, the company will continue to further promote the implementation of a new round of "double hundred actions".
The operating capacity was stable, the short-term epidemic affected the company's sales, and the annual performance increased steadily. In 2021, the company's inventory turnover days were shortened by 7 days to 81 days year-on-year. By the end of 2022q1, the company's monetary capital was 13.15 billion yuan. The short-term epidemic continues and affects the willingness of terminal sales. Considering that Lao Feng Xiang Co.Ltd(600612) as the industry leader, the growth toughness is strong. We expect the company's revenue to increase by 7.6% in the whole year. Excluding non recurring factors such as asset disposal income in 2021, the non performance is expected to increase by 4%.
Profit forecast and investment suggestions: the consumption attribute of gold jewelry is gradually enhanced. As a leader in the industry, the company's product upgrading is parallel to channel exhibition stores, with stable performance growth. After the mixed reform, the ownership structure is clear, which is expected to release the vitality of the system. We adjusted the forecast of the company's net profit attributable to the parent company from 2022 to 2024 to RMB 1.726/19.12/2.113 billion, with the current price of RMB 37.46, corresponding to 11 times of PE in 2022, maintaining the "buy" rating.
Risk warning: the impact of gold price fluctuation; Covid-19 epidemic impact consumption; The impact of exchange rate fluctuations; Store expansion was less than expected.
