Shanghai M&G Stationery Inc(603899) (603899)
Event: the controlling shareholder intends to increase its holdings by RMB 100-500 million. On December 3, 2021, the company announced that keying investment and jiekui investment, the controlling shareholders, planned to increase their holdings by no less than 100 million yuan and no more than 500 million yuan within three months from December 3, 2021, 2021, 2021, 2021, 2021, 2021, 2021, 2021, 2021, 2021, 2021, 2021, 2021, 2021, 2021, 2021, 2021, 2021, 2021, 2021, 2021, 2021, 2021, 2021, 2021, 2021, 2021, 2021, 2021, 2021, 2021, 202.
Controlling shareholders and core executives increased their holdings, demonstrating their confidence in long-term development. Keying investment and jiekui investment are the employee stock ownership platforms of the company before listing. Mr. Chen huwen, the chairman, holds 79.33% of the equity of keying investment, and Mr. Chen huxiong, the president, holds 73.34% of the equity of jiekui investment. This shareholding increase shows the confidence of the actual controller and core management of the company in the long-term development of the company.
Under the double reduction policy, the short-term impact is stronger than the long-term impact, and we are optimistic about the sustainable growth of students’ stationery track. In the short term, under the 2021q3 double reduction policy, dealers’ and terminal channels’ confidence in picking up goods is disturbed to some extent, The apparent growth rate of the company’s traditional core business has dropped *** Long term steady growth and continuous improvement of market share.
Klip’s business maintained high growth and its profitability continued to improve. In 2021q1-3, the business income of klip was 4.93 billion yuan, a year-on-year increase of + 72.3%; Among them, 2021q3 achieved an operating revenue of 1.8 billion yuan, a year-on-year increase of + 42.9%. In terms of profitability, the gross profit margins of 2021q1 / Q2 / Q3 klip are 10.5%, 8.33% and 9.87% respectively; In 2021q3, the gross profit margin of klip increased month on month. In the medium and long term, with the increase of business scale advantages and the improvement of operation and management efficiency, the profitability is expected to continue to improve.
The new retail business aims at the cultural and creative track and creates a bridgehead for brand upgrading. In 2021q1-3, the new retail business revenue was 770 million yuan, a year-on-year increase of + 79.4%; Among them, the income of Jiumu sundries club was 700 million yuan, a year-on-year increase of + 93.4%; By the end of 2021q3, Jiumu sundries club had 436 stores (including 299 directly operated and 137 franchised), a net increase of 33 compared with the end of 2021h1, and the opening speed was in line with our expectations.
Profit forecast and investment rating: under the influence of the short-term sentiment of the high base and double reduction policy, the performance growth of 2021q3 has slowed down, but the terminal mentality and cost side of 2021q4 are expected to be marginally repaired. We maintain the previous profit forecast. It is estimated that the net profit of the company from 2021 to 2023 will be RMB 1.57 billion, RMB 1.91 billion and RMB 2.3 billion respectively, corresponding to pe35, 29 and 24x. The channel advantage of the company continues to deepen, The high-end strategy is expected to drive the continuous improvement of profitability and maintain the “buy” rating.
Risk tips: intensified industry competition, price fluctuation of raw materials, impact of education policies on demand, etc.
