Per AI Express, on December 28, 2023, China Merchants ** released a research report commenting on Caibai shares (605599).
Based on the Fed's interest rate cut expectations and the vigilance of the risk of geopolitical conflicts, it is expected that 2024*** is still expected to rise steadily. Caibai Co., Ltd. operates through direct channels and accounts for more than half of the income from investment products (2022 annual report), which is expected to release profit elasticity in the upward stage of gold prices. It is estimated that the net profit attributable to the parent company in 2023-2024 will be 76.6 billion, 93.4 billion yuan, +66% and +22% year-on-year, corresponding to 23PE14X and 24PE12X, maintaining the "Highly Recommended" rating.
In 2024, the gold price may continue to rise, and the prosperity of the jewelry industry will rise steadily. The Fed is widely expected to enter a rate cut cycle while still being wary of geopolitical surprises. Based on the monetary attributes and hedging attributes, we expect that in 2024, the terminal consumer demand will remain stable compared with 2023, and the investment demand is expected to continue to be released.
Caibai shares: ** Investment products account for a high proportion of income + full direct sales model, and the gold price rises to benefit the target.
1) Product structure: ** The proportion of investment is high, and the upward trend of gold prices is conducive to the expansion of revenue + gross profit margin of this category. Due to the higher proportion of raw material costs and lower labor costs of investment products, the fluctuation of gold prices has a greater impact on its cost side, and the impact of unit cost changes on gross profit margin is also more obvious, so it is expected that the upward trend of gold prices will increase the gross profit margin of this category. However, due to the increase in revenue of this category due to investment demand (the proportion of revenue in 2022 has reached 52%), the proportion of products with low gross profit margin in the product structure has increased, and the company's comprehensive gross profit margin may be stable or declining.
2) Channel model: the whole direct sales have been steadily expanded, and the profit elasticity is more obvious than that of the franchise model. As of the end of 23H1, the company has 74 stores, the number of stores outside Beijing has accelerated and the store efficiency has continued to improve, and the revenue in other regions of North China in 23H1 is +22% and +210% respectively. Under the all-direct sales model, the upward trend of gold prices promotes the improvement of store efficiency, considering that the expenses are relatively fixed, and the profit elasticity of a single store is released. From 2023Q1 to Q3 in 2021, the company's net profit margin after deducting non-attributable to the parent company will be ., respectively38%。
3) Equity structure: Employee stock ownership stimulates enthusiasm. In December 2019, the employee stock ownership association will hold 1325% of the shares will be restored to all 752 natural persons, and additional incentives will be given to core management personnel, such as Chairman Zhao Zhiliang and General Manager Wang Chunli as of the end of the third quarter of 2306%, which helps to fully motivate employees and promote sustainable business development.
Maintain "Highly Recommended" investment rating. It is estimated that the company's net profit attributable to the parent company from 2023 to 2025 will be 76.6 billion, 93.4 billion, 102.9 billion yuan, +66%, +22%, and +10% year-on-year respectively, corresponding to 23PE14X, 24PE12X, and 25PE11X, maintaining the "Highly Recommended" rating.
Risk warning: the risk of concentration in the business region, the risk of gold price fluctuations, the risk of macro environment fluctuations and high gold prices leading to the decline in demand, the risk of channel expansion less than expected, and the risk of intensified competition among leading enterprises.
*: Huibo Investment Research).
Disclaimer: The content and data in this article are for reference only and do not constitute investment advice. Do so at your own risk.
Edited by Tsang Kin-fai).
National Business Daily.