CHOW TAI SENG Jewellery Company Limited(SZ:002867) Soochow Securities·2025-05-05 03:23Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company is expected to see a gradual recovery in performance throughout 2025, with a focus on high dividend returns to shareholders [8] - The jewelry industry is currently facing significant sales pressure due to rising gold prices, which has impacted the company's performance [8] - The company has reported a significant increase in gross margin, attributed to rising gold prices and improved product mix [8] Financial Performance Summary - Total revenue for 2023 is projected at 16,290 million, with a decline to 13,891 million in 2024, followed by a recovery to 15,225 million in 2025 [1] - Net profit attributable to shareholders is expected to decrease from 1,316 million in 2023 to 1,010 million in 2024, with a slight recovery to 1,112 million in 2025 [1] - The latest diluted EPS is forecasted to be 0.92 in 2024, increasing to 1.01 in 2025 [1] Revenue and Profitability Metrics - The gross margin for 2024 is expected to be 20.80%, improving to 26.21% in Q1 2025 [8] - The net profit margin for 2024 is projected at 7.27%, with an increase to 9.43% in Q1 2025 [8] - The company aims for a cumulative cash distribution of at least 50% of its distributable profits over any three consecutive years [8] Channel Performance - Self-operated and e-commerce channels have shown relatively better performance, while the number of terminal stores has decreased [8] - In Q1 2025, self-operated offline revenue was 5.27 billion, e-commerce revenue was 5.34 billion, and franchise revenue was 5.84 billion, reflecting varying performance across product categories [8] Future Outlook - The company anticipates a sequential improvement in performance starting from Q2 2025, supported by a low base effect [8] - The forecast for net profit for 2025 has been adjusted to 11.1 billion, with a new projection for 2027 at 13.1 billion [8]