CITIC Securities Co., Ltd.(SH:600030)2024-08-06 01:44Financial Data and Key Metrics Changes - The gold and jewelry sector experienced significant adjustments in Q2, currently positioned at relatively low levels, with an overall valuation between 12-13 times, compared to a historical range of 10-20 times and a median of 15 times [1] - The U.S. jewelry market's online share reached 33% in 2023, reflecting a shift from traditional retail to online channels [1][2] - The average per capita jewelry expenditure in the U.S. decreased by 3% to $289 in 2023, with the proportion of jewelry spending to disposable income dropping from 0.6% to 0.5% [1] Business Line Data and Key Metrics Changes - The diamond jewelry market share in the U.S. has fluctuated, with a decline from 59% in 2009 to 40% in 2016, stabilizing around 40% from 2017 to 2019, and rebounding to 40% post-pandemic [2] - The market share of lab-grown diamonds increased from 5% in 2018 to 9% in 2023, while natural diamonds dropped to 34% [2] - The online revenue for jewelry retailers is projected to grow significantly, with a rise from $28.28 billion in 2015 to $15.6 billion by 2024, increasing its share from 2% to 21% [3] Market Data and Key Metrics Changes - The U.S. jewelry market share for precious metal jewelry rose from 82% in 2009 to 85% in 2023, indicating a concentration of market power among leading brands [2] - The number of physical jewelry stores in the U.S. decreased from 21,000 in 2015 to 18,000 in 2023, reflecting a shift towards online sales [1] - The average number of people per jewelry store in the U.S. increased from 15,000 in 2015 to 19,000 in 2023, indicating a consolidation of retail locations [1] Company Strategy and Development Direction - The industry is witnessing a shift towards online channels, with companies focusing on enhancing their digital presence and operational capabilities to adapt to changing consumer behaviors [1][4] - Companies are leveraging partnerships with e-commerce platforms to boost sales, with significant growth in online revenue reported by major players [4] - The trend towards brand differentiation and targeted market positioning is becoming crucial for competitiveness in the jewelry sector [4] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of monitoring end-user sales and franchise expansion as key indicators for future growth in the jewelry sector [1] - The management noted that the economic environment remains challenging, with consumer spending on jewelry under pressure due to economic fluctuations [1] - The future demand recovery and franchise expansion are critical observation points for the industry [1] Other Important Information - The pandemic has accelerated the modernization of the U.S. jewelry industry, with a notable increase in online shopping habits among consumers [1][2] - The rise of social media has significantly influenced jewelry consumption trends, with personalized jewelry gaining popularity [2] - The competitive landscape is shifting, with leading brands expanding their market share while smaller brands struggle to maintain their positions [3] Q&A Session Summary Question: What are the key trends in the U.S. jewelry market? - The U.S. jewelry market is experiencing a significant shift towards online sales, with a notable increase in the market share of lab-grown diamonds and a decline in traditional diamond sales [2] Question: How is the company adapting to the online sales trend? - The company is investing in digital platforms and enhancing its online operational capabilities to meet the growing demand for online jewelry purchases [4] Question: What is the outlook for consumer spending in the jewelry sector? - Consumer spending in the jewelry sector is under pressure due to economic fluctuations, but there is potential for recovery as demand stabilizes [1]