The company publishes its third quarterly report for 2021. In the first three quarters, the company realized operating income of 7.037 billion yuan (YOY+91.21%), net profit of 421 million yuan (YOY+5.41%) and non-return net profit of 377 million yuan (YOY+6.59%). Among them, 21Q3 realized operating income of 2.491 billion yuan (YOY+79.45%), net profit of 152 million yuan (YOY-2.28%) and non-return net profit of 139 million yuan (YOY-1.58%) in a single quarter. The decline in Q3 net profit compared with the same period last year is mainly due to (1) the sales volume of gold jewelry business has increased greatly, and the income has increased greatly, and the gold jewelry business has charged processing fees, and the increase in net profit is less than the increase in income; (2) dyeing fees have not yet returned to the previous high point; (3) the prices of raw materials, such as coal, have risen.
The company's profitability declined compared with the same period last year. The company's gross profit margin and net profit margin in the first three quarters were 12.30% and 6.80% (YOY-9.09pct/-5.29pct), respectively. 21Q3 gross profit margin and net profit margin are 13.40% and 7.02% (YOY-5.39pct/-5.51pct) respectively. The rates of 21Q3 sales, management R & D and financial expenses are 1.21%, 3.92% and-0.06% (YOY-0.15pct/-1.73pct/-0.02pct), respectively.
Revenue from the gold business increased significantly. The gold jewelry business achieved procurement volume of 11.65t (YOY+219.18%) and sales volume of 48.57t (YOY+82.25%) in the first three quarters. Hang Min Baitai 2021 performance commitment target for deducting non-return net profit of not less than 102 million yuan, the first three quarters of gold jewelry business growth is rapid, is expected to complete the performance commitment.
Through the share buyback plan, it shows the confidence of the company's development. The company adopted the repurchase plan on September 23, 2021, which intends to repurchase no less than 20 million shares and not more than 3000 million shares at a price of not more than 7.28 yuan per share, and the repurchase period shall be no more than 12 months from the date of adoption of the repurchase plan.
As of 21Q3, the company has repurchased 4.4372 million shares, accounting for 0.41% of the company's total share capital.
Profit forecast and investment advice: the performance from 2021 to 2023 is 0.61 yuan per share, 0.68 yuan per share and 0.77 yuan per share, respectively. With reference to the average PE (TTM) in the past three years, the 2021 PE is valued at 11 times, with a corresponding fair value of 6.71 yuan per share, maintaining a "buy" rating.
Risk tips. Risks such as sluggish demand and unfulfilled performance commitments agreed upon by restructuring.