\u3000\u3000 Shanghai M&G Stationery Inc(603899) (603899)
Core conclusion: the company has actively responded to short-term negative factors and gradually improved its fundamentals. The recent stock price adjustment has brought good opportunities for layout and allocation.
We are optimistic about: Chenguang's excellent management ability will build a high barrier moat with all channels, strong products and brand strength. Improve the quality and grab the share of traditional stationery business; The strong growth of office direct selling business kelipu has made a positive contribution to the performance; The new retail business Jiumu sundry agency is gradually mature and operating well; The company has realized the expansion and upgrading from stationery to cultural innovation.
The main business of traditional stationery: improving quality and efficiency, improving brand strength, and bringing high-quality and steady growth.
In the second half of the year, under the influence of the double reduction policy, the continuous repetition of the epidemic, the rise of raw materials and the high base, the company's traditional stationery business was under pressure for a short time. However, we believe that the moat built by the morning light and the logic of growth have not changed. In the short term, the double reduction policy has been implemented for some time. At present, it mainly affects the passenger flow of stores near primary schools and teaching auxiliary institutions, and Chenguang is still the original core strategy to increase the implementation and promotion: on the one hand, it is to promote the optimization and upgrading of product structure, including the proportion of high-quality cultural and creative products and high-end customized products, as well as the expansion of new products such as quality education, Then enhance the added value of products and market competitiveness; On the other hand, it is to upgrade the image of stores, improve channel efficiency, change from wholesalers to retail service providers, empower terminal sales, and focus on the improvement of single store revenue. In the medium and long term, its growth driving force mainly comes from the double rise of customer unit price and single store brought by the improvement of brand power. We estimate that the company's market share in Chinese stationery is about 8% at present, and there is still much room for improvement in the future. In addition, the company has formulated overseas market expansion strategy, which is worth looking forward to. To sum up, with the company actively responding to disturbance factors and the gradual improvement of suppression factors, we expect the main business of the company's traditional core stationery to maintain a growth of 10% - 15% in the medium term.
Office direct selling business kelipu: it is about to enter the scale of 10 billion and enter the profit release period.
Keli has given priority to large and medium-sized customers such as the government, central enterprises and the world's top 500, and has realized the rapid expansion of revenue scale in the past few years. We expect that the annual revenue of klip will reach more than 7 billion yuan in 2021 and 10 billion yuan in 2022. With the volume expansion and supply chain optimization, the bargaining power of klip on the upstream and downstream industrial chains will be further improved. We expect that with the in-depth optimization of upstream procurement, the increase of customers in the middle market with relatively high gross profit margin and the decline of expense rate during the period after the continuous expansion of scale, the net profit margin of klip will increase steadily and make a positive contribution to the overall profit of the company.
New retail Jiumu sundry agency: the model is gradually mature and the operation is good.
Jiumu promotes the implementation of the company's brand upgrading strategy and has opened up its business model by giving priority to the layout of Direct stores. By the end of September 2021, Jiumu has 436 stores, including 299 Direct stores and 137 franchisees. We expect Jiumu to increase more than 100 stores every year in the future. According to the record of investor relations activities disclosed by the company, Jiumu currently has an average operating floor efficiency of 18000-22000 yuan / floor. The company continues to improve its profitability through continuous optimization of commodity portfolio and standardized store operation. Looking back, Jiumu sundries agency will implement the company's new five-year strategic positioning and become the bridgehead of Chenguang brand and product upgrading and the country's leading medium and high-end cultural and creative grocery retail brand.
Investment suggestions:
We believe that there is room for volume and price improvement brought by the upgrading of Chenguang's traditional business product channels, and the new business is entering the harvest period. The company is gradually transforming and upgrading from a leader in stationery to a cultural and creative giant, and is optimistic about its development prospects. Recently, the company has announced the shareholding increase plan of controlling shareholders (no less than 100 million yuan and no more than 500 million yuan in three months from 2021 / 12 / 3), Demonstrate the company's confidence in future development. Considering the higher than expected growth of new business income, we raised the forecast of the company's operating income of RMB 173.21/210.44/25.121 billion in the 21st-23rd year to RMB 173.24/215.63/26.590 billion; Considering the cost pressure caused by the rising price of raw materials, the company's eps1 for 21-23 years was reduced The forecast of 65 / 2.05/2.46 yuan is 1.62/1.97/2.39 yuan, corresponding to the closing price of 58.04 yuan / share on February 17, 2022, and PE is 36 / 29 / 24 times respectively, maintaining the "buy" rating of the company.
Risk tips
Risk of sharp decline in the demand for traditional stationery; New business is less risky than expected.
