The company reported that its net profit fell 24.85% year-on-year in the first quarter of 2017.
On the evening of April 23, the company announced that for the first quarter of 2017, 1Q2017 achieved an operating income of 1.114 billion yuan, a decrease of 12.87% over the same period last year, which was less than the 23.47% decline in 4Q2016. Realized net profit of 21.1236 million yuan, equivalent to 0.04 yuan of fully diluted EPS, a decrease of 24.85% compared with the same period last year, while 4Q2016 lost 7.7046 million yuan. 1Q2017 realized 8.3751 million yuan in non-return net profit, a decrease of 54.57% compared with the same period last year. The performance was lower than expected. The company expects to achieve a net profit of 0.45-55 million yuan from January to June 2017, an increase of 7.85% to 31.81% over the same period last year.
The composite gross profit margin increased by 1.20 percentage points, and the expense rate increased by 1.61 percentage points during the period:
In the first quarter of 2017, the company's consolidated gross profit margin was 9.36%, up 1.20 percentage points from the same period last year. In the first quarter of 2017, the company's period expense rate was 7.59%, an increase of 1.61 percentage points over the same period last year. Among them, the sales / management / financial expense rate was 4.54% / 1.04% respectively, 2.01%, which was 1.19 /-0.06 / 0.48 percentage points higher than that of the same period last year.
Actively seek brand differentiation and constantly increase investment in self-supporting channels
In March 2017, the company announced that it had terminated the major asset restructuring through a fixed increase in the acquisition of a 75% stake in Suzhou good House due to changes in the securities market environment and policies, as well as differences between Suzhou good House's 2016 performance and committed performance. In recent years, the company continues to seek brand differentiation, mainly by combining with high-profile IP resources to develop products that cater to popular hot spots and young consumers. In addition, the company increases its investment in proprietary channels to expand its influence. We are optimistic about the performance of the gold jewelry industry in 2017, the main logic is inflationary pressure, the strengthening of real estate regulation and control, war and conflict expectations, etc., the company's main business in gold jewelry sales a large proportion, will obviously benefit.
Adjust profit forecast and maintain neutral rating
We adjusted our forecast for the company's fully diluted EPS from 2017 to 2019 to 0.10 / 0.12 / 0.14 yuan (previously 0.11 / 0.13 / 0.16 yuan), taking into account that it will take time for the company's business to recover, the current valuation is on the high side and the neutral rating is maintained.
Risk Tips:
The macroeconomic growth rate is lower than expected, and the growth rate of consumer demand is lower than expected.