Investment Rating - The report maintains a "Buy" rating for the company [7] Core Views - The company reported a revenue of 6.52 billion RMB in 2024, a year-on-year increase of 10.5%, and a net profit attributable to shareholders of 194 million RMB, a decrease of 41.9% primarily due to goodwill impairment in the women's bag business. Excluding this impact, the net profit was 350 million RMB, down 5.1% year-on-year. In Q1 2025, revenue reached 2.252 billion RMB, up 25.4%, with a net profit of 189 million RMB, an increase of 44.4% [1][2][3] - The company is expected to benefit from its young and fashionable brand positioning, leveraging unique craftsmanship and modern design to capture consumer interest. The brand has been recognized as one of China's 500 most valuable brands for 21 consecutive years [3][4] - The report projects an increase in net profit for 2025 and 2026 by 16% and 23% respectively, with a target price set at 11.80 RMB, based on a PE ratio of 21 times for 2025 [4][8] Summary by Sections Financial Performance - In 2024, the company's jewelry brand revenue and operating profit increased by 13.3% and 12.8% respectively, outpacing the 9.8% growth of the gold jewelry market. The self-operated revenue was 3.017 billion RMB, down 7.4%, while franchise revenue was 3.28 billion RMB, up 32.4% [2] - The overall gross margin decreased by 2.4 percentage points in 2024 and increased by 2.0 percentage points in Q1 2025, attributed to a higher proportion of lower-margin gold products. The expense ratio improved, leading to a net margin increase of 1.1 percentage points to 8.4% in Q1 2025 [2][3] Profitability Forecast - The company is expected to achieve a net profit of 503.78 million RMB in 2025, with a year-on-year growth of 160%, and 610.28 million RMB in 2026, with a growth of 21.14% [6] - The report highlights a projected EPS of 0.57 RMB for 2025 and a ROE of 13.32% [6] Valuation - The target price of 11.80 RMB is based on a PE ratio of 21 times for 2025, reflecting the company's strong growth momentum driven by product and brand strength [4][8]

Investment Rating - The report maintains a "Buy" rating for the company [7] Core Views - The company reported a revenue of 6.52 billion RMB in 2024, a year-on-year increase of 10.5%, and a net profit attributable to shareholders of 194 million RMB, a decrease of 41.9% primarily due to goodwill impairment in the women's bag business. Excluding this impact, the net profit was 350 million RMB, down 5.1% year-on-year. In Q1 2025, revenue reached 2.252 billion RMB, up 25.4%, with a net profit of 189 million RMB, an increase of 44.4% [1][2][3] Summary by Sections Financial Performance - In 2024, the company's jewelry brand revenue and operating profit increased by 13.3% and 12.8% respectively, outpacing the 9.8% growth of the gold jewelry market. The self-operated revenue was 3.017 billion RMB, down 7.4%, while franchise revenue was 3.28 billion RMB, up 32.4%. The overall gross margin decreased by 2.4 percentage points in 2024 and increased by 2.0 percentage points in Q1 2025, driven by improved expense efficiency [2][3] Brand Positioning - The company targets the young demographic aged 25-40, integrating Eastern culture with modern fashion. Its unique craftsmanship and design align with consumer willingness to pay for quality, especially in a high gold price environment. Collaborations with popular IPs are expected to enhance average transaction values and mitigate gold price volatility risks [3][4] Profit Forecast and Valuation - The net profit forecasts for 2025 and 2026 have been raised by 16% and 23% to 500 million RMB and 610 million RMB respectively. The target price is set at 11.80 RMB, based on a 21x PE ratio for 2025, reflecting strong growth momentum due to enhanced product and brand strength [4][8]