Key elements of the report
On April 28, 2024, the company released its 2024 quarterly report.
Investment highlights:
24Q1 results showed steady growth. With 2024Q1, the company achieved revenue of 18.251 billion yuan (YoY +13.08%), net profit attributable to mother of 363 million yuan (YoY +21.09%), and net profit of 369 million yuan (YoY +33.21%) after deducting non-attributable net profit.
The net interest rate increased slightly, and the cost control was good. 2024Q1, the company's gross margin increased by 0.10 pct to 4.09% year on year; sales/management/ R&D/finance expenses ratio was 0.70%/0.20%/0.02%/0.07%, respectively, +0.07/-0.03/-0.02/+0.03 pct year on year; net margin increased slightly by 0.13 pct to 2.00% year on year.
Revenue from the gold and jewelry business rose, and revenue from service fees increased dramatically. (1) Gold jewelry: 2024Q1, the gold and jewelry business achieved revenue of 18.030 billion yuan (+12.82% year-on-year); (2) Service fee revenue:
2024Q1, service fee revenue of 344.956 million yuan (+299.47% year-on-year).
The number of direct-run stores remained unchanged in 24Q1, and the number of franchised stores increased. 2024Q1, the company adjusted direct-run stores and franchise stores in different regions. The number of direct-run stores remained unchanged at the end of the quarter, and there was a net increase of 8 franchisees. In addition, the company plans to add 6 direct-run stores and 216 franchise stores in 2024Q2-Q4.
Profit forecast and investment advice: As a large gold and jewelry enterprise with a central enterprise background, the company relies on core gold products, continuously introduces new products, and caters to the trend and enters the diamond cultivation circuit. It is expected to create a second growth curve in the future. The company's EPS for 2024-2026 is expected to be 0.72/0.86/0.98 yuan/share, respectively, and PE corresponding to the closing price on April 29, 2024 will be 16/13/12 times, respectively, maintaining a “buy” rating.
Risk factors: macroeconomic downturn risk, increased market competition risk, risk of large fluctuations in raw material prices.