珠寶奢侈品：為什么珠寶會(huì)失去光澤

1、Equity Research EuropeLuxury JewelleryWhy jewellery may have lost some sparkleLuxury Goods | Connections SeriesConnections Series Jewellery brands facing a more difficult market backdrop. Beyond near-term COVID-19 disruption possibly costing 2ppt of jewellery industry growth in 2020, we find that th

2、e positive wealth effects of the past three years are rolling over, jewellery consumption is increasingly directed towards self-purchases, and demographic trends are marked by declining marriages and birth rates. The outlook for branded jewellery looks better than that for unbranded, but we forecast

3、 industry sales growth to slow to +6% overthe next five years, from +9% pa over the past 20 years. In addition, credible new entrants, such as LV and Gucci, are putting pressure on established brands (eg, Cartier and Bvlgari), and could contribute up to 1ppt of industry growth, on our estimates. Sub

4、dued outlook for diamond miners given lower industry inventory requirements. Alrosa forecasts online penetration to rise to 25% in 2025 from 10% in 2020. This means faster inventory turns, while jewellery retailers failing provides excess supply of inventory.We estimate that inventory requirements f

5、or the jewellery industry will grow at only +1% pa over the next five years. This could dampen pricing as well as physical demand for rough diamonds. Coupled with a mid-stream facing both profitability and financing difficulties, we think miners will have to take on more cuts (DeBeers is forecasting

6、 +6% pa sales volume growth over the coming years). This ultimately results in only a modest recovery from a weak 2H19, but means downgrades to market expectations. Underperform rating on Richemont with SFr69 target price, cut from SFr71. We cut our FY20 operating profit forecast by 12% chiefly due

7、to COVID-19, and cut our FY21 forecast by 6% owing to soft wholesale as well as a cautious stance on Cartier jewellery growth. The stock is trading at 22x CY21E P/E against luxury peers at 23x, despite greater consensus earnings risk for Richemont at this stage of the cycle. Neutral rating on Anglo

8、American with 22.50 target price, reduced from 23.50.2019 has been a poor year for diamonds. We previously assumed a full recovery in volumes and prices by 2021; however, given the more subdued outlook we outline in this report, we reduce our EBITDA by 1% in 2020E but 3.5%/5.5% in 2021/22E.Figure 1:

9、 Inventory requirements for the jewellery industry (rebased 2020 = 100)140100-8+28108-12120100806040200The Credit Suisse Connections Series leverages our exceptional breadth of macro and micro research to deliver incisive cross-sector and cross-border thematic insights for our clients.Research Analy

10、stsGuillaume Gauvill, CFA44 207 888 0321 HYPERLINK mailto:guillaume.gauville guillaume.gauvilleConor Rowley44 20 7883 9156 HYPERLINK mailto:conor.rowley conor.rowleyLing Xie44 20 7888 2255 HYPERLINK mailto:ling.xie ling.xieCarsten Riek44 20 7883 9672 HYPERLINK mailto:carsten.riek carsten.riekSpecial

11、ist Sales: Alex Molloy44 20 7888 2209 HYPERLINK mailto:alex.molloy alex.molloySpecialist Sales: James Brady44 20 7888 4267 HYPERLINK mailto:james.brady james.bradyInventory at the end of FY20eImpact on retail store closureImpact on shifting towards onlineConsumer demand Inventory at the end ofFY25eS

12、ource: Credit Suisse estimatesDISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS,LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-US ANALYSTS. US Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As

13、 a result, investors should be aware that the Firm may have a conflict of interest that couldKey chartsFigure 2: We forecast branded jewellery sales to slow to +6% growth over the next five years from +9% historicallyFigure 3: driven by demographic trends, positive wealth effects rolling over and lo

14、wer share of non-discretionary giftingBranded jewellery sales (Y/Y % change)China first-time marriage registrations25%20%15%10%5%0%-5%-10%2001200220032004200520062007200820092010201120122013201420152016201720182019e2020e2021e2022eBranded jewellery salesAverage2624222018161412102000 2001 2002 2003 20

15、04 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018First time marriage registrations (in millions, lhs)Y/Y change (%. rhs)30%25%20%15%10%5%0%-5%-10%-15%Source: Company data, Credit Suisse estimatesSource: Refinitiv, Credit Suisse researchFigure 4: We forecast inventories to grow

16、 at +1% over the next five years due to softer demand and rising online penetrationFigure 5: Rough and smooth diamond prices could see only a very modest improvementInventory bridge 2020-2025e (rebased 2020 = 100)Rough and smooth diamond price index140180 29012010080170 270 160250150+28108100-8-1214

17、06013040120Feb-12202302101900Inventory at the end of Impact on retail storeImpact on shiftingConsumer demand Inventory at the end of110 170FY20eclosuretowards onlineFY25eAug-12Feb-13Aug-13Feb-14Aug-14Feb-15Aug-15Feb-16Aug-16Feb-17Aug-17Feb-18Aug-18Feb-19Aug-19Feb-20 Overall price index Rough price i

18、ndexSource: Credit Suisse estimatesSource: Bloomberg Finance L.P., Credit Suisse researchFigure 6: We forecast pressure on Jewellery Maisons margin atFigure 7: Risks to sales volumes for diamond minersRichemont due to product investment and rising competition Jewellery Maisons operating margins (IFR

19、S 16 from FY20e)De Beers sales volumes (kct)36%40,00034%32%30%28%26%24%35,00030,00025,00020,00020122013201420152016201720182019Q4 FY20(annualized)2020 Guid.2021 Guid.22%15,00020%FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20e FY21e FY22eDeBeers sales volumes kctsSource: C

20、ompany data, Credit Suisse estimatesSource: Company dataTable of contents HYPERLINK l _TOC_250016 Growing headwinds for consumer demand 4 HYPERLINK l _TOC_250015 Jewellery not immune to near-term challenges 4 HYPERLINK l _TOC_250014 Positive wealth effects gradually rolling over 5 HYPERLINK l _TOC_2

21、50013 Jewellery purchases are increasingly discretionary 8 HYPERLINK l _TOC_250012 Branded jewellery historically has been more resilient through cycles 10 HYPERLINK l _TOC_250011 but branded jewellery is facing new entrants and margin pressure 12 HYPERLINK l _TOC_250010 Distribution shifts and soft

22、er demand to prevent a sharp recovery in rough diamond prices 15 HYPERLINK l _TOC_250009 Rising online penetration accelerating inventory turns 15 HYPERLINK l _TOC_250008 Miners to take on more of the cuts 20 HYPERLINK l _TOC_250007 Branding not necessarily giving DeBeers an edge 23 HYPERLINK l _TOC

23、_250006 We also dont see synthetics as a new opportunity for the miners instead reducing a threat 23 HYPERLINK l _TOC_250005 Compagnie Financiere Richemont SA 25 HYPERLINK l _TOC_250004 New target price of SFr69 from SFr71 27 HYPERLINK l _TOC_250003 Historical P/E multiples 27 HYPERLINK l _TOC_25000

24、2 DCF valuation 27 HYPERLINK l _TOC_250001 Divisional assumptions 29Anglo American Plc 30 HYPERLINK l _TOC_250000 New TP 22.50 from 23.50 32Growing headwinds for consumer demandJewellery not immune to near-term challengesLuxury jewellery has been one of investors favoured consumer categories due to

25、its structural growth story and resilience through the cycle. In fact, jewellery has generally outperformed the overall luxury sector in an upcycle while also being resilient in a downcycle. However, the current upcycle starting in 2016 has been characterised by more moderate growth for luxury jewel

26、lery, particularly relative to luxury fashion. In fact, we estimate organic growth of jewellery slowed to +7% in 2019 following two years of strong growth at an average of +10%.Looking at 2020, we see a number of near-term headwinds for the jewellery industry. These include the ongoing political unr

27、est in Hong Kong, the COVID-19 outbreak and the persistent US-China trade war.Figure 8: Organic growth for the luxury sector vs. luxury jewelleryAsian financial crisisLehman Borhtersr collapseAnti-corrputionAsia stock mareket sell offTerrorist attacksHK unrests Coronav irus outbreak35%Dot-com30%25%9

28、/11SARS20%15%10%5%0%-5%199619971998199920002001200220032004200520062007200820092010201120122013201420152016201720182019e2020e-10%Luxury sectorLuxury jewelleryNote: luxury jewellery organic growth includes LVMH watches and jewellery, Richemont jewellery, Tiffany and Bvlgari pre-2011.Source: Company d

29、ata, Credit Suisse estimates.Luxury jewellery has become far more reliant on China in the past decade. In fact, we estimate that c. 40% of luxury jewellery sales stemmed from Chinese consumers in 2019. This captures purchases made both in China and Hong Kong as well as overseas. Compared with other

30、categories, this is broadly in line with luxury fashion but below luxury watches.The COVID-19 outbreak has started to take a toll on the luxury goods industry with a number of profit warnings across our European and US premium/luxury brands coverage. Luxury jewellery is unlikely to be immune to fall

31、ing footfall in China stores and travel disruption. The likes of Cartier, Bvlgari or Tiffany are largely retail businesses in China and we think the impact should be most severe in 1Q. In addition, limited online presence for luxury jewellery and on-going political unrest in HK will not help mitigat

32、e the negative impact.We assume Greater China luxury jewellery sales are down 55% in 1Q20. Our assumption is predicated on pre-CNY sales being largely intact, while we assume sales decline by 80% from CNY through March. In fact, our channel checks suggest around one-third of the 35 Cartier stores in

33、 China are closed, while the remaining stores are operating reduced trading hours of 12-5pm, from their regular hours of 10am-10pm.Figure 9: Number of retail stores by brandMainland ChinaHong KongGreater ChinaTotal DOSTotal store networkCartier351163198266Van Cleef & Arpels1783190133Tiffany371265322

34、NABvlgari35861NANASource: Company data, Credit Suisse researchThe advantage of jewellery relative to fashion is the high proportion of carry-over lines. In fact, we estimate that c.50% of jewellery sales at Cartier stem from its three iconic lines of Clou, Trinity and Love. As a result, we assume a

35、portion of missed sales in 1Q will in reality be deferred into 2Q, provided that the situation in China starts to improve from March.Figure 10: Watches and jewellery retail sales10%5%0%-5%-10%Nov-14 Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Feb-17May-17Aug-17 Nov-17 Feb-18 May-18 Aug-1

36、8 Nov-18 Feb-19 May-19 Aug-19Nov-19-15%Y/Y % change3-month moving averageSource: Company data, Credit Suisse researchFinally, the US-China trade war continues to dampen consumer sentiment in these two major markets for luxury jewellery. We believe the impact of the ongoing trade war is chronic and i

37、ndirect on private consumption. In fact, Figure 11 suggests that consumer confidence in the US peaked in 2018. Meanwhile, pressure on RMB depreciation (Figure 12) could further discourage overseas travel and the purchase of large-ticket items.Figure 11: US and China consumer confidenceFigure 12: RMB

38、 against USD and EUR145135115112125115105958510910610310097Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20Jan-15 Mar-15 May-15 Jul-

39、15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-2094US consumer confidence indexChina consumer confidence index RMB/USDRMB/EURSource: Refinitiv, Credit Suisse

40、researchSource: Refinitiv, Credit Suisse researchPositive wealth effects gradually rolling overWe believe investors preference for luxury jewellery is down to secular growth drivers including the less discretionary nature of jewellery purchases, household wealth creation, penetrationopportunities of

41、 brands over independent players and barriers to entry. The De Beers Group Diamond Insight Report 2019 sheds some light on the drivers of diamond jewellery consumption, which accounts for c.40% of the value of all jewellery manufacturing.We estimate that half of diamond jewellery consumption is real

42、ly discretionary. According to the De Beers Group Diamond Insight Report 2019, the US and China are the two biggest markets for polished diamonds, together accounting for 60% of the diamond jewellery market globally, and 26% of diamond jewellery purchases relate to bridal.In addition, gifting accoun

43、ts for almost half of the total demand, according the De Beers Group Diamond Insight Report 2019. This includes impulse gifting and gifting on special occasions such as big birthdays, wedding anniversaries or first child. We estimate the less discretionary part accounts for 50% of total gifting, equ

44、ivalent to 23% of diamond jewellery demand.We estimate that c.60% of total luxury jewellery is discretionary in nature. In fact, we believe non-diamond jewellery will ultimately have a lower exposure to non-discretionary gifting. In fact, non-diamond jewellery has almost no exposure to bridal and we

45、 assume non-discretionary gifting accounts for one-third of non-diamond demand.Figure 13: Luxury jewellery consumption by typeNon-discretionary spending BridalNon-discretionarygiftingDiscretionary spending DiscretionarySelf-purchasinggiftingDiamond (1) (40%)26%23%23%28%Non-diamond (2) (60%)0%31%31%3

46、7%Total10%28%28%33%Source: (1) De Beers Group Diamond Insight Report 2019, (2) Credit Suisse estimatesWealth continues to play an important role as jewellery purchases are dictated by the feel- good factor. Variations in household wealth, meaning financial and non-financial assets net of debt, will

47、have an impact. Figure 14 shows the strong historical relationship between global wealth creation and Richemont Jewellery Maisons organic sales growth.Figure 14: Richemont Jewellery Maisons organic sales vs. global wealth (Y/Y % chg.) 40%30%20%10%0%-10%-20%2005 2006 2007 2008 2009 2010 2011 2012 201

48、3 2014 2015 2016 2017 2018 2019eRichemont Jewellery Maison organic growthGlobal wealth growthSource: Company data, Credit Suisse estimatesHowever, household wealth is expected to grow at a more moderate pace than in the past. In the latest Global Wealth Report 2019 by the Credit Suisse Research Inst

49、itute, household wealth is estimated to grow by +3% in 2019 globally following no growth in 2018. Household wealth is forecast to increase by +5% p.a. in the next five years against a long-term average of +6% since 2000. Nevertheless, Figure 15 suggests the number of high-net-worth individuals is ex

50、pected to grow at +6% p.a. for the next five years, in line with the long-term average.Key markets including China and the US are seeing a slower pace of wealth creation. Following a prolonged period of growth in China at +17% p.a. for 18 years, wealth growth first turnednegative in 2018, although i

51、t is expected to bounce back slightly to +3% in 2019, according to the Credit Suisse Wealth Report 2019 (see Figure 16).Figure 15: Number of USD millionaires (in millions of people)Figure 16: Net household wealth in North America and China (Y/Y % chg.)40%7530%655520%4510%350%25-10%155-20%2001 2002 2

52、003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019eNorth AmericaChinaSource: Credit Suisse Wealth Report 2019Source: Credit Suisse Wealth Report 2019In fact, the property market boom in China played an important role in wealth creation, as we estimate it accounts for

53、 c.50% of household wealth. Figure 17 shows the correlation between property transactions in China and household wealth. Figure 18 suggests that the discrepancy between the low levels of property transactions against housing inflation will likely weigh on property prices and hence wealth.Figure 17:

54、Increase in sales of commercial buildings vs. total wealth increase in ChinaFigure 18: House price inflation against property transactions in China100%80%60%40%20%0%-20%-40%2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Sales of commercial building (Y/Y

55、 % change)China total wealth (Y/Y % change)160%140%120%100%80%60%40%20%0%-20%-40%2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019China property transactions (floorspace, Y/Y % chg., 3-mma, lhs)House price inflation,(rhs, 6m lag)13%10%7%4%1%-2%-5%-8%Source: Refinitiv, Credit

56、 Suisse Wealth Report 2019Source: Company data, Credit Suisse researchWe find that disposable income has also become an important driver of luxury jewellery spending. In fact, our correlation analysis set out in Figure 19 shows a decrease in the correlation between global wealth creation and jewelle

57、ry growth in the past 10 years as compared to 2001-2009. Meanwhile, jewellery growth has become more correlated to China than the US during the past decade.Figure 19: Correlation between luxury jewellery growth and household income and global wealth growth2001-20092010-20182001-2018China household d

58、isposable income growth44%81%40%China total wealth growth (one lag)(44%)66%2%US household disposable income growth85%8%50%North America wealth growth (one lag)85%21%70%Global wealth growth (one lag)57%34%48%Source: Company data, Credit Suisse Wealth Report 2019. *Note: luxury jewellery organic growt

59、h includes LVMH watches and jewellery, Richemont jewellery, Tiffany and Bvlgari pre-2011.In China, disposable income now outweighs wealth creation to drive jewellery growth, with an 81% correlation as opposed to 66% for wealth growth. Similar to luxury fashion, since the 2010s, jewellery is also slo

60、wly evolving from selling to a group of affluent consumers to the rising middle class in China. In addition, millennial consumers in China are mostly the only child in the family and benefit from wealth created by their parents. They generally enjoy multiple sources of income including money from th