Main points of investment

The company announced its mid-2023 report: 23H1 revenue of 4.674 billion yuan / yoy+6.96%, net profit of 280 million yuan / yoy+1.53%, net profit of 258 million yuan / yoy+19.08%. From a quarterly point of view, 23Q1/Q2 revenue is 12.40% compared with the same period last year, net profit from home is + 6.90%, net profit from home is 2.50%, and net profit from non-return to home is 9.92% from the same period last year. Q2 revenue side in the gold jewelry business led by the growth rate of beautiful, net profit growth rate is lower than the main reason for investment income and other non-recurrent profit and loss decreased by 37.09 million yuan compared with the same period last year.

Printing and dyeing business: 23H1 revenue is flat and slightly increased, cost control ability is outstanding, profit margin is improved. 1) on the revenue side, 23H1's revenue is 1.828 billion yuan / yoy+0.66%, accounting for 39.10%. In the first half of the year, foreign demand was weak and the industry as a whole fell back to maintain positive growth, mainly due to the growth of orders in the domestic market, the company's significant competitive advantages in dyeing and finishing technology, low-carbon cycle capacity, brand image and so on. 2) at the profit end, 23H1 achieved a sales profit of 227 million yuan / yoy+1.78%, gross profit from + 2.67pct to 19.74% compared with the same period last year. Although the cost of energy consumption and the price of raw materials are high, the company effectively controls costs through digital intelligence transformation and promoting the intensive use of resources, and the gross profit margin is higher than the same period last year.

Gold jewelry business: the recovery of demand in the 23H1 industry leads to a high increase in revenue and profits. 1) on the revenue side, 23H1 earned 2.563 billion yuan / yoy+18.92%, accounting for 54.83%. 23H1 China's gold, silver and jewelry retail sales + 17.5% year-on-year, gold jewelry consumption continues to pick up, the company to undertake the recovery of industry demand growth is relatively beautiful. Split weight price, 23H1 gold jewelry sales volume of 25.28t / yoy+9.29%, per ton price of 101 million yuan / yoy+8.81%, demand repair + gold price promotion to promote gold business volume and price rise. 2) at the profit end, 23H1 achieved a sales profit of 6318 million yuan / yoy+57.48%, gross profit margin + 2.88pct to 7.46%. This is mainly due to the upward fluctuation of domestic gold prices and the increase in the proportion of high gross margin gold jewelry sales over the past 23 years, which is good for the gold business gross profit margin to stabilize upward.

The gross profit margin increased steadily and the expense rate remained stable during the period. 1) Gross profit margin: 23H1 year-on-year + 2.14pct to 14.41%, quarterly gross profit margin of 12.06% 23Q1/Q2 17.07%, year-on-year + 1.76/+2.42pct, mainly due to higher gross profit margins of both printing and dyeing and gold. 2) period expense rate: during 23H1, the expense rate is 5.24%/yoy-0.02pct, in which the sales / management / R & D / financial expense rate is from-0.01/-0.06/-0.08/+0.13pct to 1.16%, respectively. 2.18%, 2.1%, 0.1%, 0.19%, basically stable. 3) homing net interest rate: as the fair value change decreased by 64.67 million yuan compared with the same period last year, the 23H1 homing net interest rate 5.99%/yoy-0.33pct decreased slightly.

Profit forecast and investment rating: the company focuses on "textile printing and dyeing + gold jewelry" double main business, other business supporting coordination. Affected by the epidemic in 22, demand was weak, and performance growth slowed down. Over the past 23 years, the printing and dyeing export business has been under pressure, and the company's domestic market development has achieved remarkable results in terms of cost reduction and efficiency, maintaining the positive growth of printing and dyeing business profits; the gold jewelry industry has recovered well and consumption has continued to pick up, leading to a high increase in the company's gold jewelry business performance. In the future, as the leader of printing and dyeing, under the environment of stricter environmental protection, the company is expected to benefit from the improvement of bargaining power brought about by the improvement of industry concentration in the future. Gold business continues to recover with consumption, the investment process of industrial parks is accelerated, and the category structure is improved. Is expected to grow steadily. We maintain the homing net profit forecast of 864 million yuan in 23-24, and increase the forecast value of 947 million yuan in 2025. The EPS in 23-25 years is 0.74 Universe 0.82 Plus 0.90 yuan per share, and the corresponding PE is 11 Plus 10gam9X.

Risk tips: large fluctuations in gold prices, repeated epidemics, weak consumption.