\u3000\u3 China Vanke Co.Ltd(000002) 867 Chow Tai Seng Jewellery Company Limited(002867) )
Event: the company issued 2021 annual report and 2022 first quarter report. In 2021, the company achieved an operating revenue of 9.155 billion yuan, a year-on-year increase of + 80.07%, mainly due to the introduction of cooperation between provincial service centers, and the sales of gold products increased significantly; The net profit attributable to the parent company was 1.225 billion yuan, a year-on-year increase of + 20.85%. In 2022q1, the company realized an operating revenue of 2.754 billion yuan, a year-on-year increase of + 138.15%, and a net profit attributable to the parent company of 290 million yuan, a year-on-year increase of + 23.26%.
Revenue side: ① by quarter, 21q1-22q1 company achieved operating revenue of RMB 1.157/16.32/36.84/26.82/2.754 billion respectively, with a year-on-year increase of + 70.68% / + 63.93% / + 119.90% / + 54.55% / + 138.15% respectively; ② In terms of products, the operating revenue of plain gold jewelry / inlaid jewelry / brand royalties was 5.5652229694 billion yuan respectively, with a year-on-year increase of + 232.22% / + 0.90% / + 25.43% respectively. The sales of inlaid products were significantly restrained, mainly due to epidemic factors and changes in the economic environment.
Gross profit margin: in 2021, the gross profit margin of the company was 27.31%, with a year-on-year increase of -13.72pct, mainly due to the rapid growth of gold sales revenue, resulting in great changes in the revenue structure. By product, the gross profit margin of plain gold jewelry / inlaid jewelry / brand royalties was 10.59% / 29.74% / 100% respectively, with a year-on-year increase of -12.07 / + 2.65/0pct respectively.
Period expense side: in 2021, the company’s period expense rate was 8.59%, with a year-on-year increase of -6.29pct. ① The sales expense ratio was 7.61%, with a year-on-year increase of -5.53pct; ② The management expense ratio was 1.06%, with a year-on-year increase of -0.89pct; ③ The R & D expense ratio was 0.15%, with a year-on-year increase of -0.10pct; ④ The financial expense ratio was – 0.23%, with a year-on-year increase of + 0.23pct.
Profit side: the development trend of the company is improving, the income structure is changing, and the profit level is improving, which promotes the growth of net profit. Quarter by quarter, 21q1-22q1 company realized net profit attributable to parent company of RMB 235 / 3.75/3.96/2.19/290 million respectively, with a year-on-year increase of + 133.85% / + 62.96% / + 3.68% / – 27.29% / + 23.26% respectively.
Continue to develop products and optimize product distribution model. The company has gradually made efforts in the research and development of gold products and strengthened the cooperation of gold cultural and creative IP co branding; Continue to make efforts in the research and development of diamond inlay products, launch constellation Aurora series, and improve the competitiveness of products. The company started the reform of the supply chain of gold products, optimized and upgraded the distribution model of diamond products, and improved the efficiency of gold distribution and the turnover rate of diamond products.
Optimize the layout of stores, pay attention to the quality of expanding stores, and Wuxi Online Offline Communication Information Technology Co.Ltd(300959) cooperate to help product sales. By the end of 2021, there were 4502 Chow Tai Seng Jewellery Company Limited(002867) stores, 734 new stores and 313 new stores in 2021. The company strengthened the refined operation and management of stores. In 2021, the average operating income of the company’s self operated single store was 5.227 million yuan, an increase of 87.31% at the same time. Online sales are mainly concentrated on third-party platforms, and the overall growth rate is lower than last year.
The gold jewelry industry continues to iterate, and the company stimulates the vitality of channel development. The performance of 22q1 has increased significantly, and it is expected to benefit first in the future. The number of consumption scenes on the demand side of the gold jewelry industry is more diversified, and the consumption frequency is high-frequency. Consumers’ willingness to pay labor fees due to design and cultural connotation continues to increase. Consumers trust head brands more, and the leading advantage is obvious Chow Tai Seng Jewellery Company Limited(002867) on the one hand, we will continue to upgrade our products, and on the other hand, we will accelerate the channel layout and the refined operation of our stores. In the future, the company’s brand strength is expected to continue to improve.
Investment suggestion: the company’s profit is expected to be 1.4/1.6 billion in 22-23 years, corresponding to 10 / 9 times of PE. The provincial agent model and distribution model are fully promoted, and the performance is expected to accelerate next year. It is firmly recommended.
Risk tip: repeated epidemic risk, macroeconomic environment risk, company operation risk and channel expansion are not as expected
