Guoxin Securities·2024-07-24 06:02Investment Rating - The investment rating for the company is "Outperform the Market" (maintained) [1][10]. Core Views - The company reported a significant decline in overall retail value by 20% year-on-year for the period of April to June 2024, with the Chinese market (excluding Hong Kong, Macau, and Taiwan) experiencing an 18.6% decline [3][4]. - The company is focusing on optimizing its product structure, with a notable increase in the sales proportion of high-margin priced products from 5.7% to 15.8% in the Chinese market (excluding Hong Kong, Macau) [3][7]. - The company continues to adjust its store network, closing 95 stores during the quarter, resulting in a total of 7,659 stores at the end of the period [3][8]. - Despite short-term sales pressure, the long-term outlook for the gold and jewelry industry remains stable, supported by consumer demand for value preservation and continuous improvement in product design [10]. Summary by Sections Retail Performance - The retail value in the Chinese market (excluding Hong Kong, Macau) decreased by 18.6%, with same-store sales down by 26.4%. In Hong Kong, Macau, and other markets, retail value fell by 28.8%, with same-store sales declining by 30.8% [3][4]. Store Network Adjustment - The company is implementing a strategy to enhance single-store efficiency, resulting in the closure of 95 stores, including 91 under the main brand and 4 under other brands [3][8]. Financial Forecast - The company's net profit forecasts for the fiscal years 2025-2027 have been revised down to HKD 7.038 billion, HKD 7.682 billion, and HKD 8.362 billion, respectively, with corresponding P/E ratios of 11.2, 10.3, and 9.5 [3][10].