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Affected By The Fall In Gold Prices, Lao Fengxiang'S Revenue Growth Slowed Down.

2012/4/27 9:43:00 5

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Old Feng Xiang Gold Prices Fell Revenue Growth Slowed Down

Clothing brand old shop

Lao Fengxiang

The 2011 Annual Report and the 1 quarterly report in 2012 were released recently: in 2011, the total income was 21 billion 100 million yuan, an increase of 47.6% over the same period last year, and the net profit attributable to parent company was 523 million yuan, an increase of 83.1% over the same period last year. The net profit after deducting non recurring gains and losses was 107.4% over the same period last year, achieving 1.20 yuan per share, which was in line with expectations.

We plan to increase 2 shares in every 10 shares to distribute 1 yuan in cash dividends.

The first quarter of 2012 achieved operating income of 7 billion 200 million, an increase of 10.9% over the same period, accounting for 168 million of net profit attributable to shareholders of listed companies, an increase of 19% over the same period, and a fully diluted earnings per share of 0.39 yuan.

Comment: revenue growth has slowed since the fourth quarter.

Since the fourth quarter, economic growth has slowed down.

Gold price fall

As a result, the retail sales of gold, silver and jewellery in the enterprises above Designated Size dropped faster than that of the same period last year.

Fourth quarter revenue and first quarter revenue growth slowed to 31% and 11% respectively.

In 2011, the annual income of gold and silver jewelry was high. As a leading industry, the annual income of jewelry and jewelry reached 15 billion 900 million, up 56% from the same period last year.

Restructuring is effective and cost management is strengthened.

After the injection of assets, the proportion of listed companies holding Limited shares of Lao Feng Xiang increased to 78.01%. The proportion of minority shareholders' profit and loss accounted for net profit decreased by 9ppt compared with the same period last year. At the same time, while the sales scale increased significantly, the sales cost and management cost were well controlled, and the two cost rates decreased by 0.6ppt and 0.3ppt respectively compared with the same period last year. The annual net profit margin of the company increased by 0.5 percentage points over the same period last year.

Channel model and product structure adjustment improve future profitability.

Last year, the company increased its investment in its own stores, reaching 139 stores by the end of last year.

The company will focus on channel mode adjustment and product structure adjustment in the future: increasing the proportion of self operated stores; upgrading the sales of new products including Cui, Zhu, Yu and Bao. It is expected that the improvement of sales channel mode and the increase of the proportion of high margin products will gradually enhance the profitability of the company.

Cut earnings forecasts by 8%.

Taking into account the wide fluctuation risk of gold price, the industry growth rate declined, we lowered the 2012 profit forecast to 1.53 yuan, and gave a profit forecast of 1.85 yuan in 2013.

Investment recommendations: according to adjusted earnings forecasts, the current A share price corresponds to 2012 and 2013 P / E ratios of 18x and 15x respectively. B share price corresponds to 2012 and 2013 P / E ratios are 11x and 9x respectively, and the valuation is cheap.

We are optimistic about the growth prospects of the jewelry industry in the wave of consumption upgrading in China, as well as the profitability of the company as a centennial brand through strategic adjustment.

Investment risk: gold prices fluctuate greatly.