In 2023, the company achieved revenue of $56.364 billion/+19.61%, net profit of 973 million/ +27.20%, net profit of 881 million/ +26.81% after deducting non-return to mother. The 24Q1 company achieved revenue of 18.251 billion/ +13.08%, net profit of 363 million/ +21.09%, and net profit of 369 million/ +33.21% after deducting non-return to mother. The company is a leading central enterprise in the gold industry. The “Guojiao” brand is deeply trusted. At the same time, “direct sale+distribution” is combined. The channel advantage continues to expand, the product matrix continues to be enriched under the wave of domestic goods, and the cultivation and drilling business progresses steadily. Maintain a “Highly Recommended” rating.
Revenue continued to grow at a high rate, and 24Q1 results exceeded expectations. In 2023, the company's revenue was $56.364 billion/ +19.61%, net profit attributable to mother was 973 million/ +27.20%, net profit not attributable to mother was 881 million/ +26.81%. Looking at a single quarter, 23Q4 achieved revenue of 15.051 billion/ +31.62%, and net profit of 233 million/ +53.71% to mother.
24Q1 achieved revenue of 18.251 billion/ +13.08%, net profit of 363 million/ +21.09%, net profit of 369 million/ +33.21% after deducting non-attributable net profit.
The gold jewelry category performed well, and the revenue from the distribution model increased. By product, in 2023, the company's gold products achieved revenue of 55.485 million/ +20.09%, K-gold jewelry products achieved revenue of 356 million/ -26.51%, brand usage revenue of 110 million/ +40.67%, and management service fee revenue of 84 million/ -10.33%. By model, in 2023, the company's direct sales model achieved revenue of 32.935 billion/ +15.41%, and the distribution model achieved revenue of 23.100 billion/ +26.08%.
Join the rapid expansion of stores in 2023, and the channel is expected to continue to expand. In 2023, the company opened 13/985 new direct-operated/franchised stores, closed 15/368 direct-managed/franchised stores, and increased net direct-operated/franchised stores - 2/617. By the end of 2023, the total number of company stores was 4257, including 103 direct-run stores and 4,154 franchised stores. As of the end of 2024Q1, the company had a total of 4265 stores, including 103 direct-run stores and 4,162 franchise stores.
The gross margin has increased, and the cost ratio has stabilized. In 2023, the company's gross profit margin was 4.13%, up 0.23pct year on year, achieving a net profit margin of 1.73%, an increase of 0.11pct year on year. The fee rate for the full year of 2023 was 1.30%, a year-on-year decrease of 0.07pct. The financial expense ratio was 0.04%, down 0.02pct year on year; the management expense ratio was 0.33%, up 0.02pct year on year; the sales expense ratio was 0.88%, down 0.07pct year on year; and the R&D expense ratio was 0.05%, down 0.01pct year on year.
Investment advice. As a leading central enterprise in China's gold industry, the company's “Guojiao” brand is deeply trusted. At the same time, “direct sale+distribution” is combined. The channel advantage continues to expand, the product matrix continues to be enriched under the wave of domestic goods, and the cultivation and drilling business progresses steadily. The company's net profit for 2024/2025/2026 is estimated to be 1,214/13.79/1,553 billion, respectively, maintaining the “Highly Recommended” rating.
Risk warning: gold price fluctuations, macroeconomics and consumption falling short of expectations, store opening progress falling short of expectations, etc.