26/05/2020

Lao Fengxiang (600612): An old jewellery faucet considering the upward price of gold

Lao Fengxiang (600612): An old jewellery faucet considering the upward price of gold
Investment points Shanghai is expected to be a state-owned listed company and a long-established jewelry leader.The “Lao Fengxiang” brand originated from Fengxi Yuji Silver Building, which was founded by Cixi Feishi in Shanghai in 1848. Until 2018, the income scale of Lao Fengxiang with a history of more than 170 years reached 437.800 million, the net profit scale is 15.南京桑拿论坛 6 trillion, the business covers jewellery, pen industry, crafts, commerce and trade; and the holding subsidiary Lao Fengxiang, which is the core of its business, achieved revenue of 433 in 2018.10,000 yuan, total profit 19.800 million, the listed company is expected to hold 78 shares.01% (direct holding 57.51%, indirect holdings of 20.50%). Jewellery industry: Leading space for growth is still broad, and gold is still the main consumer.In 2018, the size of the national jewelry industry was close to 700 billion yuan. The market share of the top six jewelry brands led by Chow Tai Fook and Lao Fengxiang maintained a fluctuation of 20%.From the perspective of the overall consumption structure of jewellery, gold is still the most important category in jewellery consumption, and gold jewellery and gold coins and gold bars are the main needs in gold consumption, which can reflect the two attributes of gold consumption and investment, respectively.More than 90% of domestic gold consumption.We believe that the sales of gold jewellery are more affected by macroeconomics. Under the condition that the overall consumption environment is stable, the slow rise in gold prices is good for the consumption of gold jewellery; and when the price of gold changes significantly, the investment value of gold is even more significant.Good consumption of gold coins and gold bars). The leading fundamental performance has been stable for many years, reflecting that the performance is highly consistent with the industry’s prosperity.Throughout the development of Lao Fengxiang, before the high-speed development of the industry before 2011, it seized Dongfeng and carried out rapid channel expansion. The horse race was successful, and the growth rate showed the industry as a whole. After 11 years, the overall growth rate of the company fell, driving the gold and silver jewelry consumptionThe growth center has fallen, and Lao Fengxiang still maintained a growth rate in line with the industry, reflecting the competition and robustness of growth as a leader.In the review of its market value performance, it can be found that most of the time the market value rise and fall are consistent with the company’s fundamental data, that is, in line with the overall retail trend of the gold and silver jewelry industry, except for the bull market in 2015 and the subsequent irrational round of 16H1 stock market disasters.Falling, and the overall downturn in 18H2 in the gold and silver jewelry retail environment, the company’s smooth market reform due to the promotion of Lao Fengxiang’s limited share reform has caused a wave of counter-trend growth. The limited equity ownership of core subsidiary Lao Fengxiang is also one of the focus of the market.It is particularly noteworthy that in 2010, the limited shareholding of Lao Fengxiang in listed companies was increased to 78 by an additional issue to the State-owned Assets Management Committee of Huangpu District.01%, and the revitalization of natural person and employee shareholdings in 2018. Dating Guoxin Holdings became a strategic investor. The company’s market value has achieved a significant increase in both periods. Profit forecast and investment grade: We expect the company’s overall operating income growth rate to reach 10 in 19/20/21 respectively.9% / 9.7% / 9.4% to 486/533/583 million, net profit attributable to mothers increased by 13% / 13% / 12% to 13.7/15.4/17.4 ppm, corresponding to PE17 / 15 / 14X. As a leading jewellery leader in gold business, the company has shown 苏州夜网论坛strong revenue and performance growth in the past years. Considering the current estimate at a historically low level, it also has the expectation of a rebound in gold prices, Has configuration value, the first coverage assigned a “buy” rating. Risk reminder: risks caused by short-term fluctuations in gold prices, and demand fluctuation risks caused by macroeconomic growth