Zhou Dasheng (002867): Everlasting Diamond is King

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Zhou Dasheng (002867): Everlasting Diamond is King

The high-growth national jewellery leader company is a first-class gold jewellery leader and the only brand in the first-line brand that focuses on insert categories.

The company’s total department stores and sales scale maintained a relatively high growth rate. Through the focus on the development of alternative categories and sufficient channel subsidization strategies, it jumped to the top three in the industry in just a few years, with an overall market share of approximately 5.

82%; diamonds reach a market share of 10.

41%, second only to Chow Tai Fook.

Benefiting from the growth of Gao Tong stores and expansion of exhibition stores, the company’s revenue / profit CAGR was 21 in 2015-2018.

29/31.

68%.

The company’s ROE has exceeded 20% for eight consecutive years, showing a good rate of return.

The company’s competitive advantages are continuously strengthened, mainly including: 1) product advantages: through the serialization of alternative categories to create differences in design, distinctive features of 100-faced diamonds, cost-effective positioning; 2) brand advantages: continued expansion, stable operationThe store is the best brand promotion; 3) Management ability: refined management ability enhancement: supply chain management, flexible and flexible franchise supervision and counseling; 4) first-mover advantage: accumulated network resources, high-quality franchise resources, upstream bargainingAbility, good brand image.

We will discuss in detail the company’s management capabilities, market size, industry competition and other three issues that investors are most concerned about. Industry analysis: Diamond is king The growth of the gold and jewellery industry is rooted in consumption upgrades and young consumer groups (ie Millennials andThe category of Z; the multi-scenario consumption possibility and the increase of consumption carats will also drive the repurchase rate and the customer unit price.

Changes in consumer preferences will benefit from the inclusion of diamonds in the long run, and ownership is higher than industry growth.

Risk prompts 1) Decline in macroeconomic growth drags on breakthroughs in optional category sales, leading to a decline in same-store growth; 2) Industry leaders accelerate store expansion, channel inventory levels increase, and ultimately affect brand sales growth; 3) Non-controlling shareholders reduce their holdingsThe expected repression.

Investment suggestion: High-growth national budget jewellery leader. Maintain “Buy” rating. We use a combination of absolute and relative estimates. For prudent consideration, we believe that the company’s reasonable variable interval is 38.

13-41.

46 yuan.

Corresponding to 2021PE is 14-16X.

Forecast the company’s net profit in 2019-2110.

08/11.

89/14.

06 ppm, the corresponding PE is estimated to be 15/13/11 times. Due to the impact of changes in the macro environment on the optional impact and reduction of liquidity discounts, the company gradually expands its scale 无锡夜网论坛 and its long-term layout appears.

Maintain BUY rating.

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