The company published an annual report for '23 and a quarterly report for '24. In '23, the company achieved revenue of 16.552 billion yuan +50.61% year on year, net profit of 707 million yuan +53.61% year on year; 24Q1 achieved revenue of 6.316 billion yuan +25.01% year over year, and net profit of 272 million yuan +16.15% year over year. The company's 23 year dividend was 0.7 yuan per share, and the dividend payment rate reached 77.03%, corresponding to a dividend rate of 4.7%.
Revenue side: By product, gold jewelry/precious metal investment products/precious metal cultural products/diamond jewellery/joint venture commissions reached 61.59/88.84/11.09/2.14/ 173 million yuan respectively, +54.11%/+55.79%/+18.41%/+0.07%/+32.34%, respectively. Looking at each channel, e-commerce subsidiaries achieved revenue of 2,982 billion yuan, +102.55% over the same period last year. The company continued to strengthen its live streaming business. Sales on short video platforms increased significantly, and multi-channel linkage led to an increase in performance.
Margin side: The gross sales margin in '23 was 10.68% YoY -0.54 pct. 24Q1 gross sales margin was 10.00% YoY -1.38pct.
Expense side: The cost rate for the 23-year period was 3.54% y-0.83pct, with sales/management/R&D/finance expenses ratios of 2.62%/0.68%/0.05%/0.19%, respectively, -0.58/-0.23/-0.04/+0.02pct, respectively. The cost rate for the 24Q1 period was 3.10% -0.67pct, of which sales/management/R&D/finance expenses were 2.26%/0.56%/0.04%/0.24%, respectively, -0.51/-0.13/-0.02/-0.01pct, respectively.
Store side: In 2023, 19 stores were added, and 2 stores were closed, resulting in a net increase of 17 stores. In 24Q1, 1 store was added, 2 stores were closed, and a net decrease of 1 store was achieved. As of March 31, '24, Caibai Co., Ltd. has opened a total of 86 stores.
We have been committed to building the “Caibai Jewelry” brand for a long time and creating a segmented racetrack brand matrix. The company develops the sub-brand “Cai Bai Chuanshi”, which focuses on the ancient French gold category, and the sub-brand “Cai Baiyue Time”, which focuses on fashion and luxury jewelry. At the same time, the company further explores outstanding traditional Chinese cultural resources and cooperates with many cultural landmark organizations to develop a series of gold jewelry products containing elements of traditional Chinese culture and traditional sentiments.
Actively develop online business to meet changing consumer needs. The company accurately grasped the characteristics of the pace of online consumption, and focused on marketing planning during periods such as Internet festivals and important platform activity points, and strengthened the construction of live streaming channels. Online channel revenue doubled in '23, and the cumulative number of visitors to the online platform was about 36 million, an increase of about 18% over the previous year.
Investment advice: As a gold and jewelry company with the leading revenue scale in Beijing, the company already has a strong market position in the local market, and is also increasing its brand influence in the foreign port market through offline direct management and online channels. We expect the company's net profit to be 8.3/96/ 1.09 billion yuan for 24/25/26, respectively, corresponding to 14x/12x/11xPE, respectively, to maintain a “buy” rating.
Risk warning: Market operation risk, new store expansion falling short of expectations, risk of gold price fluctuations, etc.