\u3000\u3 Shengda Resources Co.Ltd(000603) 899 Shanghai M&G Stationery Inc(603899) )
Event: on March 8, Shanghai M&G Stationery Inc(603899) released the 2021 annual performance express. In 2021, the company achieved an operating revenue of 17.607 billion yuan, a year-on-year increase of 34.02%; The net profit attributable to the parent company was 1.518 billion yuan, a year-on-year increase of 20.91%. Among them, 21q4 achieved an operating revenue of 5.455 billion yuan, a year-on-year increase of 18.59%; The net profit attributable to the parent company was 401 million yuan, a year-on-year increase of 17.00%.
In the 21st year, the performance slightly exceeded the expectation, and the company's fundamentals improved significantly. 2021 was the beginning year of the company's new five-year strategy. The company used new development concepts to improve development quality and efficiency, steadily promoted the implementation of the company's development strategy and business plan, comprehensively promoted the stable development of traditional core business, continued to develop and expand new business, and maintained a healthy and quality development. Benefiting from the steady growth of the traditional core business, the new business office direct selling Chenguang kelipu and Jiumu sundry agency, a large retail store, continued to maintain rapid growth. In 2021, the company achieved an operating revenue of 17.607 billion yuan, a year-on-year increase of 34.02%; The net profit attributable to the parent company was 1.518 billion yuan, a year-on-year increase of 20.91%. On a quarterly basis, the operating revenue of Q1, Q2, Q3 and Q4 in 2021 reached RMB 3.812 billion, 3.874 billion, 4.465 billion and 5.455 billion respectively, with a year-on-year increase of 82.96%, 44.68%, 18.25% and 18.59%; The net profit attributable to the parent company was RMB 328 million, RMB 338 million, RMB 451 million and RMB 401 million respectively, with a year-on-year increase of 42.50%, 44.34%, 0.57% and 17.00%. In Q4, the company's profit growth rate rebounded significantly month on month, which verified that the company is in the trend of continuous improvement in fundamentals.
With the coordinated development of one body and two wings, the traditional core business is expected to maintain steady growth
(1) traditional core business: product upgrading and channel efficiency improvement are expected to maintain steady growth. 2021h2 is affected by repeated epidemic, double reduction policy and high base, and the growth of the company's traditional business is under pressure in the short term. However, after at least two learning flood tests, the company's response measures have gradually matured, and the negative impact of the double reduction policy has been gradually improved. In the medium and long term, the moat of the company's traditional business is still strong enough. From the perspective of the whole year, driven by the good growth performance in the first half of the year, the traditional business is expected to maintain steady growth in 2021. The company continues to promote the optimization and upgrading of product structure and channel upgrading to improve efficiency: in terms of products, the company further optimizes the product structure by increasing the proportion of high-quality cultural and creative products, high-end customization and other products, as well as expanding quality education and educational products; Channel: upgrade the image of stores, promote the transformation of wholesalers into retail service providers, actively empower dealers and continuously improve channel efficiency. The company actively responded to the impact of the double reduction policy. With the marginal improvement of influencing factors, we believe that the traditional business as a whole will not change to the good situation. It is expected that the company's traditional core business will maintain a growth of 10% - 15% in the medium term.
(2) with the rapid development of the office direct selling business of klip, the profitability is expected to improve. Klip is committed to providing one-stop office procurement service solutions. By continuously expanding large and medium-sized customers such as the government, central enterprises and the world's top 500, klip has maintained strong growth in recent years and is expected to reach 10 billion in 2022. With the rapid increase of revenue volume and scale, the bargaining power of the company to the upstream and downstream industrial chain is further improved. At the same time, the company continues to optimize the customer structure and enhance its fee control ability. It is expected that the profit margin of kelip's office direct sales business may be steadily improved.
(3) the business model of Jiumu sundry agency is gradually mature, and the operation speed and quality coexist. By the end of September 2021, the number of stores of Jiumu sundry club had reached 436, including 299 directly operated stores and 137 franchised stores. It is expected that more than 100 stores will be opened in 2022. The company continues to optimize the commodity portfolio, and through the standardized operation of the store, it helps the growth of the same store and the continuous improvement of profitability.
Investment suggestion: as a master of Chinese and foreign stationery, the company's traditional business product channels continue to upgrade, and new businesses such as Chenguang kelipu and retail stores are growing rapidly, with steady progress in one body and two wings. At the same time, the controlling shareholders of the company acted in concert to successfully complete the shareholding increase plan, demonstrating their confidence in long-term development. We estimate that the operating revenue of Shanghai M&G Stationery Inc(603899) 20212023 will be 17.607 billion yuan, 21.504 billion yuan and 26.194 billion yuan, with a year-on-year increase of 34.02%, 22.13% and 21.81%; The net investment of the parent company was RMB 1.899 billion and 2.099 billion respectively, with a year-on-year growth rate of -2.902 billion and 2.099 billion respectively.
Risk warning: the risk of repeated epidemic in some areas; New product launch is less than expected risk; The impact of the double reduction policy exceeds the expected risk.
