Event: Dia Co., Ltd. releases 23H1 results.
Revenue side: the overall prosperity is declining, and the products and store efficiency are under pressure.
Sub-products: marriage proposal diamond ring income 964 million /-41.7%, marriage ring income 261 million /-33.27%.
Shop efficiency: the average revenue of direct stores is 161.7%, gross profit is 112.79%, and flat efficiency is 1.73%, 57.69%, 177.55%, 51.56%, 120.3% and 51.75%, respectively.
Stores: the company's stores expanded strategically in 2022, and 23H1 actively adjusted its channel strategy to take stock and optimize existing stores. During the reporting period, the company opened 15 new stores (8 Q1 and 7 Q2), closed 27 stores (9 Q1 and 18 Q2), and reduced 12 stores. As of 23H1, the company has 676 stores.
Brand building: (1) during the reporting period, the company filmed the brand true love blockbuster "Love never changed" in the United States, which was launched on Valentine's Day on February 14 to convey the power of true love around the world. After the launch of the Valentine's Day blockbuster, the number of views during the spread reached 128 million, more than 600000 netizens participated in the interactive discussion, and many media reported in depth. (2) the company, in conjunction with the French fashion magazine Figaro FIGARO, launched a global campaign to "find 100 diamond couples around the world". At the same time, the company joined with a number of media and the public to find diamond couples and see what true love looks like. (3) during 520, focusing on the expression of users' love and ceremonial appeal, the company launched a "courtship season", which was meticulously built in Shanghai, Shenzhen, Guangzhou, Xi'an, Wuhan, Xiamen, Chongqing, Chengdu and other cities.
Products: the launch of small gold heart, the market response is more positive. The company combines the Chinese-style romance of "love is stronger than gold" with the brand concept, and has developed a series of products called "DR Little Golden Heart", which is made of 999.99 ‰ high-purity gold and uses concentric work to show a heart-to-heart pattern with a horizontal-to-vertical ratio of 13:14, implying "I love you for a lifetime".
Gross profit margin and expense rate: the gross margin is relatively stable, and the expense rate is affected by the decline in revenue. The company's 2023H1 gross profit margin was 69.29%, down 1.33pcts from the same period last year; of which 2023Q1/Q2 gross profit margin was 69.87% 2023Q1/Q2 68.54%, down 1.25pcts/1.39pcts from the same period last year. 2023Q2 sales expense rate 65.16%/+27.02pcts, management expense rate 6.02%/+1.82pcts, R & D expense rate 1.67% go back to 1.07pctsjournal 2023Q2 financial expense rate 1.27%/+0.60pcts.
Profit: the decline in revenue puts pressure on profits. The net profit of 2023H1 is 0.53 million yuan /-90.77%. The net profit of 25Q2 is-48 million /-123.45%.
Earnings forecast and valuation: optional consumption represented by diamonds has been hit in 2023, but the company, as the leading brand of diamond rings for marriage proposals, is still in the lead and is expected to grow again when the industry picks up. It is estimated that the company's return net profit from 2023 to 2024 will be 1.3 billion yuan, corresponding to 101x/44xPE, it will be given a "recommended" rating.
Risk hints: the economic recovery is not as expected, the recovery of industry prosperity is not as expected, and consumers' optional consumption preferences change more than expected.