\u3000\u3000 Guangdong Chj Industry Co.Ltd(002345) (002345)
Investment logic
Eastern Pioneer Driving School Co.Ltd(603377) jewelry brand, positioning young, national fashion and light luxury. The company mainly focuses on the two major businesses of jewelry and women's bags with "CHJ Guangdong Chj Industry Co.Ltd(002345) ", "venti Fandi" and "Fion fianne" as the core, positioning young women's consumer groups. The revenue of jewelry 1h21 accounts for 61% and the gross profit margin is 40%; Gold jewelry accounts for 27% and gross profit margin 11%; Women's bags account for 10% and the gross profit margin is 50% +. Among them, the gross profit margin of gold and jewelry is greatly affected by the fluctuation of gold price, and the influence of jewelry is not significant; The price of gold rose from 19 to 20 years and decreased quarter on quarter in 21 years, but it is still at a high level.
The impact of high jewelry consumption boom and goodwill impairment subsided, and the performance inflection point appeared. 1) Benefiting from the improvement of jewelry consumption boom center after the epidemic, the performance has increased brightly in the past 21 years. The revenue of 1-3q21 company increased by 48.87% at the same time, a compound increase of 13.69% over the same period of 19 years, and the net interest rate was 8.27%, an increase of 4.78pct over the same period of 20 years. 2) the effect of the younger package transformation of women's bags business is obvious, FION performance continues to improve, the impact of goodwill impairment is fading, and offline stores shift from department stores to shopping centers, and the tiktok live is rapidly rising. 1-3q21 company's leather goods revenue was 330 million yuan, an increase of 81%, of which e-commerce accounted for 40%.
Based on product power, multi-dimensional enhance brand voice and digital transformation help take off: 1) adhere to original fashion design, organically combine oriental culture, fashion trend and ingenuity technology, and continue to develop products that strengthen the imprint of Oriental culture and highlight personality expression. 2) Enhance the brand's voice through star cooperation, cross-border joint branding, live broadcasting and delivery. 3) Digital transformation empowerment management, launched the cloud store system for 20 years, helped the company open up product flow, business flow and member resources, and realized all-weather and all-round sales. By the end of 2020, the number of Omni channel members of the company exceeded 10 million, with post-80s members accounting for 80% and re purchase exceeding 40%.
Take advantage of joining to quickly broaden the business boundary, seize the sinking market and expand the store space: benefiting from the sinking of channels and consumption upgrading, low-level cities have become the new engine of consumption growth. In 2018, the company accelerated the development of franchisees and actively laid out the sinking market. There were 622 jewelry franchisees at the end of 3q21, a net increase of 285 compared with the end of 18. The company plans to reach 2000 stores and a net increase of 1000 stores in the next 3-5 years. Compared with comparable companies, the number of franchise stores is as high as 3000 +, Guangdong Chj Industry Co.Ltd(002345) jewelry store expansion space is still broad.
Valuation and investment advice
The company will accelerate the expansion of franchise channels in the future. It is expected that 150 ~ 200 stores will be added every year in 21 ~ 23 years. The online channels will grow rapidly, and the revenue is expected to increase by 70% / 50% / 40% respectively in 21 ~ 23 years; The women's bag business has benefited from the rejuvenation of brands and the adjustment of channels, and Wuxi Online Offline Communication Information Technology Co.Ltd(300959) is expected to resume rapid growth.
It is estimated that the company's EPS will be 0.38/0.45/0.52 yuan in 21 ~ 23 years respectively. Referring to the current valuation level of the same industry, it is recommended to give the company a valuation of 20 times in 22 years, corresponding to the target price of 9.00 yuan.
Risk tips: weak terminal consumption, less than expected franchise expansion, impairment of women's bag goodwill and fluctuation of gold price.
