occurrences
Acer Chao released its 2024 semi-annual report. 2024H1 achieved revenue of 3.431 billion yuan/ +14.15%, net profit to mother 0.229 billion/ +10.04%, net profit of 0.225 billion yuan/ +10.06% after deducting non-return net profit of 0.225 billion/ +10.06%, and non-recurring profit and loss of 4.01 million yuan, mainly from fair value changes. Q2 In a single quarter, the company achieved revenue of 1.635 billion yuan/ +10.33%, net profit attributable to mother 0.099 billion yuan/ +16.76%, after deducting non-attributable net profit of 0.097 billion yuan/ +16.96%.
Comment:
Traditional gold and franchise channels drive revenue growth. 24H1's revenue was 3.431 billion yuan/ +14.15%. By product: 1) fashion jewelry 1.654 billion/ accounting for 48.21%/+5.97%; 2) traditional gold 1.477 billion/ accounting for 43.04%/+31.37%; 3) leather goods revenue 0.148 billion/ accounting for 4.33%/-26.07%; 4) other products 0.02 billion/ accounting for 0.59%/+24.15%; 5) agency brand authorization and franchise service 0.123 billion/ share 3.60%/+ 41.00%; 6) Other businesses 0.008 billion/ 0.24%/-49.59%. By sales model: 1) Self-operated 1.725 billion/ accounting for 50.26%/-3.98%, average store revenue +10.21%; 2) Franchise agents 1.647 billion/ accounting for 48.00%/+43.66%, average store revenue +11.06%; 3) wholesale 0.051 billion/ accounting for 1.50%/+9.26%; 4) Other businesses 0.008 billion/ accounting for 0.24%/-49.59%.
The results of reducing costs and improving efficiency have been shown, and the cost rate has declined steadily. The cost ratio for the 24H1 period is 14.64% /-2.65pct, of which: 1) sales expenses 0.39 billion/ -8.00%, sales expense ratio 11.36%/-2.73pct; 2) management expenses 0.066 billion/ +36.90%, management expenses ratio 1.92% /+0.32pct, mainly due to increased depreciation and amortization expenses of the company headquarters building; 3) R&D expenses 0.029 billion/ -6.47%, R&D expenses ratio 0.85% /-0.19pct ; 4) Financial expenses 0.018 billions/ +4.65%, financial expenses ratio 0.51% /-0.05pct. Q2 Single quarter: Period expense ratio 14.71% /-3.42pct, including: sales expense ratio 11.33% /-3.25pct, management expense ratio 2.05% /+0.15pct, R&D expense ratio 0.81% /-0.27pct, financial expense ratio 0.51% /-0.05pct. The company's share of franchises increased, and the superposition continued to improve quality and efficiency, and the cost ratio declined markedly.
Investment advice: Chao Hongji integrates Oriental aesthetic innovation to create a trendy Oriental brand tone, further enhance its differentiated advantages, and outperform the market in sales growth. Taking into account the pressure on the gold consumer market and adjusting profit forecasts, revenue for 2024-2026 is expected to be 6.864 billion/8.004 billion/9.133 billion, and net profit to mother is 0.391 billion/0.461 billion/0.527 billion, respectively, and corresponding PE is 10 times, 9 times /8 times, respectively. Maintain a “buy” rating.
Risk warning: Increased market competition; declining consumption power; risk of gold price fluctuations; store expansion falling short of expectations; performance forecasts and valuation judgments falling short of expectations.