The leading gold brand from ancient France, and the Hong Kong stock market is starting again. The old gold brand was founded in 2009 and focuses on the production and sale of ancient French gold jewelry. It launched the industry's first pure gold diamond jewelry, and is one of the formulators of the China Gold Association's group standards for ancient gold and ancient gold and diamond jewelry. By June 2024, the company had opened a total of 33 self-operated themed stores in high-end business districts in high-tier cities across the country, and had entered e-commerce platforms such as Tmall and Jingdong.

In 2023, the company achieved revenue of 3.18 billion yuan and net profit to mother of 0.416 billion yuan, an increase of 145.7%/340.4%.

Promotion of Guochao culture, innovation in classical craftsmanship. Driven by traditional culture and catalyzed by investment demand, China's gold and jewelry consumption scale reached 518 billion yuan in 2023, accounting for 63.2% of the jewelry share. Among them, ancient gold jewelry uses innovative craftsmanship and has a unique aesthetic appearance and durability. In recent years, it has become more popular among consumers under the trend of national trends. By 2023, the ancient French gold market had reached 157.3 billion yuan, accounting for 31% of the full gold market share. According to Frost & Sullivan, it is expected to grow at a compound growth rate of 21.8% to 421.4 billion yuan by 2028.

Use ingenuity to create a luxury gold brand. Old-fashioned gold has differentiated into the ancient French gold circuit with high-end positioning. By 2023, it ranked 7th in the Gufa Gold competition with 2.0% market share. Supported by brand premiums, old stores have strong price increases. By 2023, the price of 65% of single products was in the 0.01-0.05 million yuan range. The average price of a single gram of pure gold inlay/gold products reached 1,043 yuan/729 yuan, and the corresponding gross margin was as high as 45.8%/36.9%. At the same time, the brand's private operation has accumulated high-quality customers. In 2023, there were 0.0931 million loyal members, an increase of 131.2%. Among them, the number of members spending more than 0.3 million yuan per year stabilized at around 1%, and the revenue contribution ratio was as high as 26.7%.

Pure direct management and efficient management, the boutique business district continues to expand stores. Old-fashioned Gold uses a full direct management model to build channels and strictly manage brand image and service quality. 1) Online: Open flagship stores on Tmall and Douyin, with total online revenue of 0.36 billion yuan in 2023, of which Tmall's monthly revenue reached 0.127 billion yuan in March 24; 2) Offline: Up to 2023, total offline revenue was 2.82 billion yuan, of which high-tier cities accounted for 72% of revenue. The average single store revenue has exceeded 90 million yuan, and the store's performance doubled. Self-operated stores have strong profitability and expansion power. The average initial break-even period for 15 newly established stores is about 1 month, and the average cash flow payback period is about 5 months. In the next two years, the old gold store plans to open 8 or 5 new stores at home and abroad to further promote brand internationalization and market penetration.

Profit forecast and investment advice: Old-fashioned Gold is a high-end jewelry brand in China. It has established a unique competitive advantage with ancient gold craftsmanship and high-end brand positioning. Build an excellent ROE level with high-quality brand assets through steady expansion through a low-debt, low-leverage model. The company is expected to achieve revenue of 5.44/6.85/8.22 billion yuan in 2024-2026, an increase of 71.0%/26.0%/20.0%, net profit of 0.78/0.97/1.14 billion yuan, an increase of 87.2%/24.8%/17.7%, corresponding to 15 times PE in 2024, covering and giving a “buy” rating for the first time.

Risk warning: risk of gold price fluctuations, weak terminal demand, risk of store expansion, intensification of industry competition