Investment advice
For market style switching, it is recommended to pay attention to the growth high-quality brand targets with undervalued value, Guangdong Chj Industry Co.Ltd(002345) / Chow Tai Seng Jewellery Company Limited(002867) ; It is suggested to pay attention to North China gold jewelry leader Beijing Caishikou Department Store Co.Ltd(605599) , which has recently become a licensed retailer of Winter Olympic souvenirs.
Recently, we have organized a series of offline surveys, and the feedback is as follows:
1) in 2021, the sales of gold jewelry in China increased and diamonds declined. Reasons: a) gold is changed from piece to gram, which is highly accepted by consumers and drives up demand. b) Gold keeps its value under the epidemic. c) The profit margin of franchisees per gram decreased. In the peak season of golden sales in holidays, the brand side / shopping mall launched the activity of preferential price per gram to boost sales, and the gold sales increased.
2) the off-line sales of cultivated diamonds have increased steadily, with a large customer base under the age of 25 and self wearing. The main sales specifications are 20-30 points, the retail price is 2000 + yuan, and the price of natural diamonds of the same grade & size is about 3:1 to cultivated diamonds.
3) gold sales in the Spring Festival were better, and wedding and other activities were concentrated at the end of the year. From December 21 to January 22, the proportion of jewelry sales with wedding theme increased. In the past month, the trend of gold price has been relatively stable. From the end of the year to the Spring Festival, due to a certain rigid demand for gold consumption, the gold price may rise.
4) the recent outbreak of Shuibei in Shenzhen and the closure of the factory. Shenzhen Shuibei is a national jewelry wholesale center with multiple functions such as production, proofing and marketing. 80% – 90% of the processing and supply chain of local gold jewelry is Shuibei. The epidemic may put some pressure on the preparation of various brands years ago. Before the Spring Festival, dealers generally reserve inventory for 20-30 days of sales. Shuibei epidemic has an impact on Chow Tai Seng Jewellery Company Limited(002867) , China National Gold Group Gold Jewellery Co.Ltd(600916) , zhouliufu and other brands. Other brands such as Lao Feng Xiang Co.Ltd(600612) and Laomiao are processed in the Yangtze River Delta, and zhoudafu’s factories are in Hong Kong, Yanqian, Shunde, Wuhan and other places.
Market Review
Diamond jewelry sector fell 0.42% this week, outperforming CSI 300 1.56pct, which is in the middle and upper reaches of the industry. In terms of individual stocks, Fujian Ideal Jewellery Industrial Co.Ltd(002740) , * ST Jinzhou led the increase, Sinomach Precision Industry Co.Ltd(002046) , Henan Liliang Diamond Co.Ltd(301071) led the decline.
Industry dynamics
Industry news: 1) China: Guangdong Chj Industry Co.Ltd(002345) through cloud store mode, 40% of sales come from re purchase; DEA shares plans to use no more than 7.5 billion yuan of idle funds for cash management; Mclon Jewellery Co.Ltd(300945) stores cover seven provinces and one city, and continue to expand the layout outside the province; Hong Kong’s hard luxury consumption continues to recover; 2) Abroad: Pandora’s 21-year sales of 9 billion kroner (1.37 billion US dollars) exceeded expectations; India’s gold imports doubled year-on-year in 21 years; The diamond trade of the United States and Belgium is in good condition. Hong Kong, China, affected by Omicron, has conservative demand, and the demand for rough diamonds at the fair is strong; The natural diamond association refers to 21 years as the “base year”; Due to the severe restriction of rough drill supply, Alrosa’s performance in December was the lowest in the whole year and is expected to invest in mill mine.
Key Announcements: Leysen Jewelry Inc(603900) chairman Shen Dongjun / President Jacky Jiang / Vice President Yang Lei / Li Jian resigned, and Zhuang Ou was elected as Director / President of the company, Huang Guoxiong / Chen Yiping / Fu Jinhua as independent director and Ma Jun as chairman; Chow Tai Seng Jewellery Company Limited(002867) 143600 shares were repurchased and cancelled, accounting for 0.01% of the total share capital before cancellation; Guangdong Chj Industry Co.Ltd(002345) agreed to cancel the 16.9 million shares repurchased; The controlling shareholder of Shenyang Cuihua Gold And Silver Jewelry Co.Ltd(002731) Shenzhen Cuiyi (holding 24%) pledged 14.2 million shares (accounting for 5.5% of the total share capital) and postponed the repurchase of 23.7 million shares (accounting for 9%); Sinomach Precision Industry Co.Ltd(002046) 21 is expected to make a profit of 120-160 million yuan (+ 93% – 157%).
Risk tips
Terminal retail is less than expected; The price of upstream expansion fell; Lower consumer education than expected
