\u3000\u3 Shengda Resources Co.Ltd(000603) 899 Shanghai M&G Stationery Inc(603899) )
Key investment points
The performance is in line with market expectations Shanghai M&G Stationery Inc(603899) disclosed in the performance express, the company expects to achieve an operating revenue of 17.607 billion yuan in 2021, 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%.
2021q4 performance growth accelerated. In 2021q4, the operating revenue was 5.455 billion yuan, a year-on-year increase of + 18.6%; The net profit attributable to the parent company was 401 million yuan, a year-on-year increase of + 16.83%. Compared with the same period in 2019, the two-year compound growth rate of 2021q1-4 operating revenue was 27.2%, 24.9%, 19.8% and 30.7% respectively. Compared with the same period in 2019, the two-year compound growth rate of net profit attributable to parent company in 2021q1-4 was 12.5%, 26.0%, 16.7% and 24.6% respectively. The acceleration of revenue and profit growth in 2021q4 is mainly due to the high growth of business revenue, the improvement of profitability month on month and the continuous upgrading of product structure.
Traditional business: the marginal impact of the double reduction policy is expected to gradually ease, and short-term fluctuations do not change the logic of long-term growth. In the short term, under the 2021q3 double reduction policy, the confidence of dealers and terminal channels in picking up goods has been disturbed to some extent, and the apparent growth rate of the company's traditional core business has decreased (year-on-year + 1.1%, compared with 2019q3 + 18.6%). We expect that the 2021q4 traditional business is still under pressure due to the impact of high base and double reduction. However, in the medium and long term, the company's competitive barriers at the product, channel and brand levels are still strong, and with the recovery of confidence in terminal stores, the delivery rhythm will gradually recover. We emphasize that the double reduction policy only has an impact on the base, and the medium and long-term growth slope of the industry remains unchanged. In addition, the company continued to promote the upgrading of product structure and channel optimization, and gradually strengthened the layout in categories other than writing instruments, so there is great room for improvement in customer unit price and market share.
Jiumu sundries agency: in the first three quarters, the expansion of the store was smooth, creating 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 (299 of which were directly operated and 137 of which were franchised), and the opening speed was in line with our expectations. We expect Jiumu debris agency to continue its high double-digit growth in 2021q4, and its profitability is expected to improve.
Klip: we expect to maintain high growth in 2021q4 and improve profitability month on month. 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%. The fourth quarter is the peak season of office direct sales business. We expect that in 2021q4, thanks to the continuous volume of new customers, the business of klip will continue to grow rapidly, and the net profit margin may increase 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.
Profit forecast and investment rating: the growth rate of performance in 2021q4 is accelerated, and the traditional business is expected to have an inflection point in 2022h1. Considering that the rise of raw material prices disturbs the profitability and reduces the profit forecast, we expect the net profit attributable to the parent company in 20222023 to be 1.77 billion yuan and 2.11 billion yuan respectively (the original forecast is 1.91 billion yuan and 2.3 billion yuan), corresponding to pe28 and 23x, and the channel advantages of the company continue 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, fluctuations in raw material prices, and the impact of education policies on demand
