\u3000\u3 Shengda Resources Co.Ltd(000603) 899 Shanghai M&G Stationery Inc(603899) )
Core view
Event: the company released the performance express of 2021, and achieved an operating revenue of 17.607 billion yuan during the reporting period, 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%; The basic earnings per share was 1.64 yuan / share, a year-on-year increase of + 20.68%.
Comments:
Under the high base, Q4 revenue still grew steadily, and the annual operating performance was in line with expectations. The traditional business of the company maintained steady growth, and the new business Chenguang kelipu and Jiumu sundry agency, a large retail store, continued the high growth trend, and the annual operating performance was in line with expectations. From the perspective of single quarter, the company achieved an operating revenue of 5.455 billion yuan in Q4, a year-on-year increase of + 18.59%, and still achieved a beautiful growth in the case of a relatively high base in the same period last year; The net profit attributable to the parent company in a single quarter was 401 million yuan, a year-on-year increase of + 17.06%. We believe that the growth rate of profit side is slightly slower than that of revenue because the rapid growth of new businesses with low gross profit margin lowers the overall profit level of the company. We are optimistic that the company's new businesses will continue to reduce costs and increase efficiency with the increase of scale, driving the gradual improvement of the company's profitability.
The traditional business is expected to be repaired, and the controlling shareholders act in concert to increase their holdings, demonstrating growth confidence. Since the second half of 2021, the company's traditional business has been slightly under pressure due to the "double reduction" policy and repeated epidemics in many places across the country. However, we believe that the demand for writing instruments and student stationery is relatively rigid, and its demand is affected or relatively limited by the "double reduction" policy. Moreover, in recent years, the driving force for the growth of China's stationery industry has gradually switched from quantity to price. Under the trend of "price for quantity", the company's traditional business is expected to be repaired. Meanwhile, as of March 2, the controlling shareholders of the company acted in unison. Renkeying investment and jiekui investment jointly increased their holdings of 3 million shares of the company, accounting for 0.32% of the total share capital of the company, with an increase of RMB 176 million, demonstrating their confidence in the future growth of the company.
Investment suggestion: the popularization of new business Keli, the growth momentum of Jiumu sundry agency is becoming stronger and stronger, and the company has sufficient sailing fuel. The company's performance in the first year of the new five-year strategy was excellent, and the revenue scale of kelip continued to grow steadily. By the end of September 2021, the number of large retail stores of the company had reached 496, including 60 Chenguang life Museum and 436 Jiumu sundries club. While the channel side expanded rapidly, the operation quality also improved steadily. New businesses have been successfully taken over and become the main driving force for the company's growth, and the company's long-term growth momentum remains unchanged. Considering the short-term pressure on the profitability of the company caused by the rapid increase of the scale of new business with low gross profit margin, we slightly lowered the profit forecast. It is estimated that the net profit attributable to the parent company in 20222023 will be RMB 1.81/2.14 billion respectively (original forecast value: RMB 1.89/2.31 billion), corresponding to the current market value PE of 25 / 21x respectively, maintaining the "buy" rating.
Risk tip: the epidemic situation is repeated, the development of new channels is less than expected, and the development of new business is less than expected.
