LFX(600612) 海通证券·2024-03-28 16:00Investment Rating - The report maintains an "Outperform" rating for the company [1] Core Views - The company has demonstrated strong brand power and channel management capabilities, driving steady growth in performance [3] - The company's core competitive advantage lies in its strong brand power, which supports stable expansion through a wholesale (franchise) model and high asset turnover, leading to a high ROE [3] - The company has a long history as a national jewelry brand, with a leading position in brand and channel management [3] - The company has shown resilience during industry downturns, with stable growth driven by effective store expansion and a wholesale model [3] Financial Performance - The company's revenue is expected to reach 71.4 billion, 83.9 billion, and 98.0 billion yuan in 2023, 2024, and 2025, respectively, with year-on-year growth rates of 13.4%, 17.4%, and 16.9% [4] - Net profit attributable to the parent company is projected to be 2.21 billion, 2.57 billion, and 2.89 billion yuan for 2023, 2024, and 2025, respectively, with year-on-year growth rates of 30.2%, 16.1%, and 12.3% [4] - The company's ROE has consistently remained above 20% from 2010 to 2021 and in 2023, driven by high asset turnover [3] Brand and Product Strategy - The company has a long-standing brand history, with the "Lao Feng Xiang" brand originating in 1848, and has been recognized as one of the "Top 50 Global High-End and Luxury Brands" for two consecutive years (2022-2023) [3] - The company focuses on innovation and product development, continuously launching new products and improving its industrial chain capabilities [3] - The company has a comprehensive product portfolio, including gold, platinum, diamonds, jade, pearls, and other categories, with gold products accounting for over 90% of sales [3] Channel and Distribution - The company has a strong franchise model, with a total of 5,994 marketing outlets (including 15 overseas stores) as of the end of 2023, with a net increase of 385 stores during the year [3] - The company has established a diversified distribution model, including total distributors, joint venture sales subsidiaries, and total distributor shareholding, to optimize channel management [3] - The company has a strong presence in lower-tier cities, with a focus on expanding its franchise network and improving terminal management [3] Incentive Mechanism - The company has implemented multiple rounds of equity reforms, forming an effective employee shareholding platform and promoting a market-oriented assessment system [3] - The company has achieved high revenue per employee, with a CAGR of 10.29% from 2015 to 2022, reflecting a strong incentive mechanism [3] - The company has been actively promoting a professional manager system, aiming to achieve full coverage of the system across subsidiaries by the end of 2023 [3] Industry and Market Position - The company has a leading market share in the gold jewelry industry, with its market share increasing from 11.35% in 2010 to 21.58% in 2023 [3] - The company has shown strong performance during industry downturns, with its gold sales increasing from 81 tons in 2013 to 85 tons in 2016, while the overall industry gold consumption declined [3] - The company is well-positioned to further increase its market share in the face of intensifying competition in the gold jewelry industry [3]