CHOW TAI SENG Jewellery Company Limited(SZ:002867) Guoyuan Securities·2024-08-31 04:41Investment Rating - The report maintains a "Buy" rating for the company [2][4]. Core Views - The company's performance in Q2 2024 was impacted by fluctuations in gold prices, leading to a decline in profits despite steady store expansion and online multi-category development [2][3]. - The company achieved a revenue of 8.197 billion yuan in H1 2024, a year-on-year increase of 1.52%, while the net profit attributable to shareholders decreased by 18.71% to 601 million yuan [3]. - The report highlights the challenges faced in the gold product segment due to market conditions, while the diamond-studded jewelry segment is undergoing cyclical adjustments [3]. Financial Performance Summary - In H1 2024, the company's gross margin was 18.38%, down by 0.08 percentage points year-on-year, and the net margin was 7.33%, down by 1.82 percentage points [3]. - The sales expense ratio increased to 6.46%, up by 1.53 percentage points year-on-year, which pressured profitability [3]. - For Q2 2024, the company reported a revenue of 3.126 billion yuan, a year-on-year decline of 20.89%, with a net profit of 260 million yuan, down 30.51% [3]. Product and Channel Analysis - Revenue from gold and embedded jewelry in H1 2024 was 6.962 billion yuan and 372 million yuan, reflecting a year-on-year growth of 3.43% and a decline of 29.18%, respectively [3]. - The company’s revenue from franchise, self-operated offline, and self-operated online channels in H1 2024 was 5.932 billion yuan, 963 million yuan, and 1.191 billion yuan, showing a year-on-year change of -0.74%, +16.35%, and +3.09% respectively [3]. - The total number of stores reached 5,230 by the end of H1 2024, with a net increase of 495 stores compared to the end of H1 2023 [3]. Earnings Forecast - The company is projected to have EPS of 1.20, 1.37, and 1.45 yuan for 2024, 2025, and 2026, respectively, with corresponding P/E ratios of 9, 8, and 7 times [4][5].