Focus on jewelry brand building, focus on young consumer groups. Founded in 2009, Mancaron is a jewelry retail chain enterprise integrating jewelry creativity, sales and brand management. it has high popularity and reputation in Zhejiang Province. in the jewelry industry is a strong regional brand to further expand to the whole country. From 2017 to 2021, the company's operating income and return net profit showed an upward trend as a whole, with four-year CAGR of 10.59% and 12.54%, respectively. According to the product classification of ①, the income of vegetarian gold jewelry accounts for relatively high, its income fluctuates greatly, and the income scale of mosaic jewelry is relatively stable; according to the channel classification of ②, the income of direct business decreases year by year, and the growth comes from the rapid development of e-commerce business in 2021; the income of counter and franchise business is increasing, accounting for 39.19% and 27.82% of the total revenue in 2021, respectively.
"Love still" series of key strategic layout, brand influence continues to improve. In terms of ① plain gold ornaments, Jig heavy gold is greatly affected by fluctuations in international gold prices. The company focuses on pieces of gold products such as Aishang gold, and the proportion of income from 2022H1 plain gold jewelry has increased to 80.13%. The income and share of Aishangjin products increased steadily, and the adjustment of the product structure of plain gold jewelry led to a rise in gross profit margin. In terms of ② mosaic ornaments, the proportion of Aishang Hyun's income has increased steadily, and the variety of products has been continuously enriched. 2022H1 due to the repeated impact of the epidemic, the market demand for inlaid jewelry shrank, and the sales of the company's inlaid jewelry declined compared with the same period last year.
Channel deepening + marketing promotion + data-driven to improve brand voice. ① proprietary business: the proportion of overall revenue has declined, while the proportion of e-commerce business income has increased rapidly. 2022H1's online business achieved 201 million yuan in revenue, an increase of 73.91% over the same period last year, accounting for 28.66% of the main business revenue, because the company carried out in-depth cooperation through Tmall and other channels, while opening up online channels such as Pinduoduo to expand the scale of online sales. ② joins the business:
Increase the development of franchise business, the number of terminal stores continues to expand. The company's store opening strategy is to open direct stores in the core business district of the core cities and expand to join in other areas.
Establish and cultivate diamond brand Mucan, positioning "intelligent consumers". The demand of "self-pleasing" has become an important application scene of diamonds, and nurturing diamonds are expected to further seize the market share of natural diamonds by virtue of cost-effective, environmentally friendly and other attributes. On March 17, 2022, in order to promote the development of the company in the field of cultivating diamond business and enhance the company's profitability and core competitiveness, the company established and cultivated diamond brand "OWNSHINE", which is to cultivate diamonds as the core and to create an innovative jewelry brand with the concept of fashion jewelry.
Release the plan to increase investment and add new momentum for development. On August 12, 2022, the company intends to issue shares to specific targets and intends to raise no more than 716 million yuan, of which, 288 million yuan will be invested in the terminal construction project of "Mancaron @ Z concept store", 340 million yuan in the omni-channel jewelry integrated platform construction project, and 88 million yuan in the "Mucan" brand and creative promotion project to integrate resources and open up channels. Create the favorite products of "Generation Z" consumers Use data to drive operation and management to upgrade the business chain.
Investment suggestion: we expect the company to achieve a net profit of 0.79,0.98 and 125 million yuan respectively from 2022 to 2024, and the closing price on August 16 corresponds to a PE of 44, 36 and 28 times respectively. The company plans to focus on the main business, at the same time, to promote multi-channel construction and data operation and management, the cultivation of diamond brand Mucan is expected to provide new profit growth points, the first coverage, given a "recommended" rating.
Risk tips: the competition situation in the industry is deteriorating, the investment plan is not as fast as expected, the speed of store expansion is not as fast as expected, and the market demand and new product promotion are not as expected.