Caibai Co., Ltd. released its 2023 annual report: In 2023, the company achieved revenue of 16.552 billion yuan, +50.61% year-on-year, and realized net profit of 707 million yuan, +53.61% year-on-year, and realized net profit without return to mother of 658 million yuan, +62.18% year-on-year.
Results for the first quarter of 2024: The first quarter of 2024 achieved revenue of 6.316 billion yuan, +25.01% year on year, net profit to mother of 272 million yuan, +16.15% year on year, net profit after deducting non-return to mother was 255 million yuan, +17.99% year over year.
2023 Profit Distribution Plan: The 2023 profit distribution plan is based on a total share capital of 778 million shares, with a total proposed cash dividend of 544 million yuan (tax included), accounting for 77.03% of net profit attributable to mother in 2023.
Brief review and investment advice
Disassembling the company's performance, we think there are the following highlights: ① The market share of gold jewelry/gold bars increased during the period when brand potential was rising. Looking at the full year of 2023, the company's consumption of gold jewellery/gold bars/ precious metal cultural consumer products was +36%/+6%, and the estimated market share of 23 jewellery/gold bars was 1.65%/7.36%, respectively, up 0.3/1.1 pct each. ② Target of the increase in gold prices: We estimate the company's gross profit per gram of jewellery/gold bars/precious metal cultural consumer products in 2023 compared to +9.2/1.4/9.7 yuan/gram in 2022. ③ From a dividend rate perspective:
Since its listing, the company's dividend rate has remained above 76%. In 2023, it plans to pay a dividend of 0.7 yuan per share (before tax), corresponding to the closing price of 5.31, with a dividend rate of 4.9%.
Looking at specific results, in 2023, the company achieved revenue of 16.552 billion yuan, +50.61% year-on-year, achieved net profit of 707 million yuan, +53.61% year-on-year, and achieved net profit of 658 million yuan without return to mother, or +62.18% year-on-year.
Revenue split: ① By product, gold jewelry revenue in 2023 was 6.159 billion yuan (+54.11%); revenue from precious metals investment products was 8.884 billion yuan (+55.79%); revenue from precious metal cultural products was 1,109 billion yuan (+18.41%); Diancui Jewelry achieved revenue of 214 million yuan (+0.07%); and joint commission revenue of 173 million yuan (+32.34%). ② By channel, in 2023, each revenue from online channels/offline channels/bank channels was 30/133/2 billion yuan, +105%/+43%/+20% year-on-year.
In 2023, gross margin was 10.68% (-0.54pct). By product, the gross margin of gold jewelry, precious metal investment products, precious metal cultural products, diamond jewelry, and joint venture commission was 17.85%, 2.79%, 14.16%, 39.52%, and 95.72%, respectively, -0.44, -0.01, +1.47, -3.59, and +2.09pct 1Q24 performance breakdown: 1Q24 performance breakdown: 1Q24 revenue of 6.3 billion yuan (+25%), net profit from mother of 270 million yuan (+16%), net profit from non-return mother of 250 million yuan (+18%), net profit from non-return mother of 250 million yuan (+18%), of which net profit 630 million yuan (+10%), gross profit margin of 10% (-1.3 pct), period expenses of 195 million yuan (+2.7%), period expense ratio of 3% (-0.7 pct). Judging from industry data, gold jewellery/gold bar consumption each increased by 26.8%/-3% in 1Q24, and the company benefited from the boom in gold bars.
Update profit forecasts. We expect the company's net profit from 2024-2026 to be 8.2/9.2/1.01 billion yuan each, giving 15-18x PE in 2024, corresponding to a reasonable market value range of 123-14.8 billion yuan and a reasonable value range of 15.82-18.98 yuan, maintaining the “superior to the market” rating.
Risk warning: risk of gold price fluctuations, increased risk of industry competition, risk of market downturn.