Zhou Dasheng (002867): Jewelry Leaders Focus on Three or Four Lines to Enjoy Consumption Bonus

Zhou Dasheng (002867): Jewelry Leaders Focus on Three or Four Lines to Enjoy Consumption Bonus

Recommended logic: (1) The scale of the Southeast Asian jewellery and jade jewelry industry has grown at a compound rate of 15% since 2009, and has become one of the countries with the most significant growth in the global jewellery and jade jewelry industry.

(2) In order to avoid competition with mature brands, Zhou 四川耍耍网Dasheng opened 70% -80% of its stores in third- and fourth-tier cities. The first-mover advantage caused the transfer channels to sink the most and seized the third- and fourth-tier consumer bonuses.

In the past two years, the company’s store opening speed has increased significantly. The number of net openings in the first three quarters of 2015, 2016, 2107, and 2018 were 77, 180, 268, and 466 respectively, achieving rapid expansion of light assets.

(3) The company’s performance has grown rapidly. It is expected that the net profit of mothers will increase by 26% in 2019, corresponding to only 15 times in 19 years.

Jewellery is one of the fastest growing consumer choices in developing countries.

The scale of China’s jewellery and jade jewelry industry has increased from 220 billion in 2009 to 6707 trillion in 2017, with a compound growth rate of 15%. The market size ranks third in the world, behind the United States and Japan, becoming the global jewellery and jade jewelry industry.One of the most obvious countries is expected to reach over 800 billion yuan in 2021.

The franchise model has achieved rapid expansion, and the channel sinks to enjoy the industry dividend.

(1) Focusing on franchised stores to achieve rapid expansion of light assets.

The company’s store opening speed has increased significantly. The number of net openings in the first three quarters of 2015, 2016, 2107, and 2018 were 77, 180, 268, and 466, of which the number of stores in the first three quarters of 2018 increased by 17 at the end of 2017.

1%, far more than other jewellery brands; (2) Avoid competition with mature pearl merchants, and focus on third- and fourth-tier cities.

70% -80% of Chow Tai Sang’s stores are opened in third- and fourth-tier cities, and the economic structure is continuously optimized. The development of third- and fourth-tier cities has entered the fast track.Tier 3 and 4 cities are inclined. Due to the first-mover advantage, Zhou Dasheng’s channel sinks the most and captures the consumption bonus of the third and fourth tiers.

(3) Focus on brand building and enhance product added value.

Zhou Dasheng has been focusing on brand building since its establishment. In 2018, the company’s brand value reached 376.

900 million, ranking the top three jewelry brands in mainland China.

At the same time, in order to adapt to the positioning of the brand and the differences in regional consumer needs, the company has established multi-dimensional product styles based on different design styles and themes to meet different needs.

Earnings forecasts and investment advice.

It is expected that the net profit attributable to mothers for 2018-2020 will be 8 respectively.

100 million, 10.

200 million, 12.

2 trillion, the growth rate was 36.

无锡桑拿网 7%, 25.

7%, 20.

3%.

Focusing on the acceleration of the company’s asset-light expansion, focusing on brand building, channel sinking and scoring industry dividends, the first coverage was given an “overweight” rating.

Risk Warning: Suppliers or suppliers may supply less than expected risks; commissioned production may not meet expected risks; franchise management risks; gold price fluctuation risks.

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