Zhitong Financial APP learned that Changjiang Securities released a research report saying that the epidemic affected gold jewelry consumption in the short term, but based on the basic attributes of "wedding" + "middle and high end" + "value preservation", and in the medium and long term driven by the continuous upgrading of gold product technology and the rising trend of residents' demand for accessories, the bank is optimistic about the stability and sustainability of gold jewelry consumption. It is suggested that the investment in the gold jewelry industry can choose the head brand combination with high awareness and relatively strong comprehensive operation ability. At the same time, due to a pullback in the gold jewelry sector disturbed by short-term factors, the valuations of key leading companies have fallen back to the lowest level in history. Zhou Dasheng (002867.SZ), Chow Tai Fook Jewellery (01929) and Lao Fengxiang (600612.SH) are recommended, and it is recommended to pay attention to Chao Acer (002345.SZ).
The main points of Cheung Kong Securities are as follows:
Overall: the industry is on the rise, and the stage has dropped due to the epidemic.
Driven by basic attributes (wedding + hedging) and incremental changes (product process upgrading drives gold jewelry consumption to non-wedding jewelry and young customers), the prosperity center of the industry has risen to more than 10%. That is, the two-year compound growth rate of gold jewelry consumption above the limit in 2021 is 10.5%, of which the compound growth rate from September to November in 2021 is as high as 16.5%, 14.6% and 14.9%, respectively. At the same time, the year-on-year growth rate was as high as 19.5% from January to February in 2022, while residents' outbound consumption was affected by the spread of the regional epidemic in March, with a year-on-year growth rate of-17.9%. Taken together, gold jewelry consumption above the limit increased by 7.59% in the first quarter of 2022 compared with the same period last year. China's gold consumption in 2021 was 1120.9 tons, an increase of 11.78 percent compared with 2019 before the outbreak, of which gold jewelry consumption was 711.29 tons, an increase of 5.18 percent compared with 2019.
Management: the stability of the leading operation is high, and the marginal growth center is rising.
From the perspective of annual performance, it is found that there are two characteristics: 1) there are relatively few enterprises with positive revenue and performance growth in the past, and they are basically leading enterprises. For example, Lao Fengxiang and Zhou Dasheng maintained a positive growth level in past income and deduction of non-net profit, and had a high ability of operational stability. 2) the compound growth rate of revenue of leading enterprises such as Lao Fengxiang, Zhou Dasheng and Chao Hongji in 2019-2021 was faster than that in 2016-2018, while some enterprises declined even more during the period 2019-2021, indicating that the differentiation was further intensified. Overall, the revenue of major gold and jewelry listed companies in 2021 increased by 19.06% year on year, compared with the same period in 2019 by 8.2%. The revenue growth of 2021Q1-2022Q1 was 22.79%, 23.16%, 17.2%, 12.23% and 11.56%, respectively. The gold jewelry industry achieved a substantial increase in deduction non-net profit in 2021 compared with the same period last year, among which the growth of leading enterprises Lao Fengxiang and Zhou Dasheng was strong, and the overall deduction non-net profit of 2022Q1 increased by 1.96% compared with the same period last year. Lao Fengxiang, Zhou Dasheng and China Gold increased by 7%, 26% and 17% respectively compared with the same period last year. Other enterprises also grew relatively fast due to a low base, and most other enterprises declined significantly.
Pattern: the leader actively optimizes the ability to accelerate market expansion.
On the one hand, leading enterprises grasp the demand to optimize the capacity of stores and products, on the other hand, they actively seize the market to comply with the trend. Zhou Dasheng, Lao Fengxiang and Chow Tai Fook Jewellery maintained a fast pace of store expansion in 2021 when the number of stores all exceeded 4000. The epidemic in 2021 repeatedly affected residents going out, but the expansion of leading gold jewelry stores was still relatively fast. Lao Fengxiang increased a net increase of 495 stores, Chow Tai Fook Jewellery mainland gold jewelry stores increased by 1094, and Yuyuan shares increased by 614 stores. Zhou Dasheng due to the existence of store closure adjustment and provincial model is coordinated running-in, a net increase of 313 stores, still far better than their counterparts. And from the perspective of future plans, leading enterprises will still maintain a fast pace of store expansion, and the pace of grabbing market share will still maintain a fast level.
Risk Tips:The epidemic repeatedly affects residents' income expectations and consumer spending willingness; improper grasp of product upgrading direction is limited to consumption drive.