In 2023, the company achieved revenue of 1,923 million/ +19.44%, net profit attributable to mother of 8.09 million/ +47.53%, and net profit of 71.23 million/ +39.88% after deducting non-return to mother. Looking at the 24Q1 single quarter, the company achieved revenue of 500 million/ +45.12%, net profit attributable to mother of 32.22 million/ +21.07%, and net profit of 31.79 million/ +24.88% after deducting non-return to mother. The company's differentiation is positioned in light luxury fashion. The channel layout continues, and the brand power, product power and channel capabilities are expected to be further enhanced. Maintain a “Highly Recommended” rating.

The scale continued to grow, and the profit performance was impressive. In 2023, the company achieved revenue of 1,923 million/ +19.44%, net profit attributable to mother of 8.09 million/ +47.53%, and net profit of 71.23 million/ +39.88% after deducting non-return to mother. In the 23Q4 quarter, the company achieved revenue of 705 million/ +33.49%, net profit of 11.594 million/ +165.99%, net profit of not attributable to mother of 9.6786 million/ +250.82%. Looking at the 24Q1 single quarter, the company achieved revenue of 500 million/ +45.12%, net profit attributable to mother of 32.22 million/ +21.07%, and net profit of 31.79 million/ +24.88% after deducting non-return to mother.

Inlaid jewelry is weak, and online sales are growing rapidly. By category, the company's plain gold jewelry performed well in 2023, with revenue reaching 1,769 million/ +32.14%, and gross margin increased 1.63pct to 11.94%. The performance of inlaid jewelry is still relatively weak, with revenue of 146 million/ -43.63%. By channel, e-commerce channel revenue was 919 million/ +49.60%, franchise business revenue was 371 million/ +1.82%, company direct stores achieved revenue of 195 million/ +29.73%, and counters achieved 429 million/ -8.28% of revenue.

Stores continued to expand, and store efficiency declined somewhat due to inlay. In 2023, the company opened 44 new stores, closed 36 stores, with a net increase of 8 stores. At the end of 2023, the total number of stores was 218, including 35 direct-run stores, 63 counters, and 120 franchise stores. In terms of single-store efficiency, in 2023, the company's self-operated+single-store revenue was 6.4958 million/ -7.45%, with an average single-store gross profit of 1.598,900, -7.91%; franchisee single-store revenue was 3.22,800 million/ -0.84%, and single-store gross profit 266,500/ -17.95%, mainly due to the still weak overall performance of the mosaic category, which dragged down the single-store performance.

The gross margin decreased slightly, and the cost ratio continued to be optimized. In 2023, the company's gross margin was 14.64% /-1.94pct, and the net profit margin was 4.15% /+0.82pct. 23 The cost rate for the full year was 9.33% /-2.34pct. Among them, the financial expense ratio was -0.40% /-0.48pct; the management expense ratio was 3.43% /-0.39pct; the sales expense ratio was 6.31% /-1.48pct; and the R&D expense ratio was 0.06%, which was the same as the previous year.

Investment advice. The company continues to deepen digital management and management, differentiating itself in light luxury fashion, focusing on young people, and continuing channel layout; brand power, product power and channel capabilities are all expected to be further improved.

The company's net profit for 2024-2026 is estimated to be 100 million yuan, 114 million yuan, and 130 million yuan respectively, maintaining the “Highly Recommended” rating.

Risk warning: Gold prices fluctuate, store expansion falls short of expectations, single store revenue falls short of expectations