The company's 1Q2024 revenue increased 13.08% year on year, and net profit to the mother increased by 21.09% year on April 28. On April 28, the company announced the 2023 annual report and 2024 first quarter report: achieving operating income of 56.364 billion yuan in 2023, up 19.61% year on year, achieving net profit of 973 million yuan, converted into fully diluted EPS of 0.58 yuan, an increase of 27.20% year on year, achieving net profit deducted from mother 881 million yuan, up 26.81% year on year.
1Q2024 achieved operating income of 18.251 billion yuan, an increase of 13.08% over the previous year, and realized net profit of 363 million yuan, converted to fully diluted EPS of 0.22 yuan, an increase of 21.09% over the previous year, and realized net profit without deduction of 369 million yuan, an increase of 33.21% over the previous year.
The company's 1Q2024 comprehensive gross margin increased by 0.11 percentage points, and the cost ratio increased by 0.05 percentage points during the period. The company's comprehensive gross margin in 2023 was 4.13%, up 0.23 percentage points from the previous year. 1Q2024's consolidated gross margin was 4.09%, up 0.11 percentage points year over year.
The company's expense ratio for the 2023 period was 1.30%, down 0.07 percentage points year on year. Among them, sales/management/finance/R&D expenses were 0.88%/0.33%/0.04%/0.05%, respectively, with year-on-year changes of -0.07/+0.02/-0.02/-0.01 percentage points, respectively. The 1Q2024 company's cost ratio for the period was 0.99%, up 0.05 percentage points from the previous year. Among them, the sales/management/finance/R&D expenses ratio was 0.70%/0.20%/0.07%/0.02%, respectively, with a year-on-year change of +0.07/ -0.03/ +0.03/-0.03 percentage points, respectively.
Net increase of 615 stores in 2023, steady expansion of different channels
In 2023, the company opened 13 new directly managed stores and closed 15; 985 new franchised stores were opened and 368 were closed; the net increase of the number of company stores was 615. By the end of 2023, the company had a total of 4,257 stores, including 4154 franchised stores and 103 direct-run stores. 1Q2024 has a net increase of 8 stores. In 2024, the company's stores plan to add 6 directly-managed stores and 216 franchise stores. In 2023, the company continued to expand the coverage of banking channels and explore postal system resources, thereby increasing sales of investment products and precious metals products. In terms of cross-border cooperation, in 2023, the company successfully completed the “Year of the Dragon” stamp gold and BRICS projects, successfully won the bid for the “Year of the Dragon” stamp gold project, and completed the establishment of the fifth “Zodiac Gold” project for the double brand. On the e-commerce side, the company's e-commerce national headquarters officially landed in Changsha to improve the cultivation of live broadcasts and promote businesses such as brand self-broadcasting.
Raise profit forecasts and maintain “buy” ratings
The company's 1Q2024 performance slightly exceeded our previous expectations, mainly due to the company's high number of stores opened in 2023. Since the increase in the number of company stores is conducive to increasing the company's revenue and profit, we slightly raised the company's 2024/2025 EPS forecast by 1%/3% to 0.68/0.77 yuan, and added 0.87 yuan for the company's 2026 EPS forecast. The number of the company's stores maintained a relatively rapid growth rate, and the different channels expanded steadily, maintaining a “buy” rating.
Risk warning: The risk of gold price fluctuations, store expansion falls short of expectations, and the development of the nurturing diamond business falls short of expectations.