Chenguang Co., Ltd. ( Shanghai M&G Stationery Inc(603899) )
The revenue and profit in 2021 are in line with our expectations. The new business grows rapidly and maintains the "buy" rating
In 2021, the company's revenue was 17.607 billion yuan (+ 34.02%), the net profit attributable to the parent company was 1.518 billion yuan (+ 20.90%), and the net profit not attributable to the parent company was 1.35 billion yuan (+ 22.38%). Among them, the single quarter revenue of 2021q4 was 5.456 billion yuan (+ 18.61%), the net profit attributable to the parent company was 401 million yuan (+ 16.98%), and the net profit not attributable to the parent company was 357 million yuan (+ 15.35%). The revenue and profit in 2021 are in line with our expectations. We fine tune the profit forecast and add a new profit forecast for 2024. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 1.733/20.922475 billion yuan (originally 1.764/2.108 billion yuan from 2022 to 2023), the corresponding EPS will be 1.87/2.25/2.67 yuan, and the current share price will be 26.7/22.1/18.7 times that of PE. We continue to be optimistic about the long-term development of the company and maintain the "buy" rating.
Profitability: due to the change of business structure, the gross profit margin and net profit margin declined in 2021
Gross profit margin: the overall gross profit margin of the company was 23.21% (- 2.15pct) in 2021 and 21.11% (- 1.05pct) in 2021q4. The decline of gross profit margin in the whole year was mainly due to the increase in the proportion of revenue of Chenguang kelipu with low gross profit margin and the decrease of its gross profit margin year-on-year. Expense rate side: during 2021, the expense rate decreased by 0.99pct to 13.28% year-on-year. The decrease in expense rate mainly benefited from the company's better fee control ability and the rapid growth of revenue side. Net interest rate: in 2021, the net interest rate attributable to the parent company was 8.62%, with a year-on-year decrease of 0.94pct; in 2021q4, the net interest rate attributable to the parent company was 7.34%, with a year-on-year decrease of 0.10pct. In the context of the year-on-year decline in the expense rate, the decline in the company's net profit margin was mainly due to the obvious decline in the gross profit margin in the same period.
The growth rate of traditional core business income has recovered, and the new business income has increased rapidly
(1) traditional core business: according to the company's disclosure (including Chenguang technology and ASUS), the revenue in 2021 was 8.88 billion yuan (+ 17.22%). (2) Chenguang kelipu: in 2021, the revenue was 7.766 billion yuan (+ 55.30%), the gross profit margin was 9.37% (- 1.63 PCT), the net profit was 242 million yuan, the net profit margin was 3.12% (+ 0.24 PCT), and the revenue in 2021q4 was 2.833 billion yuan (+ 32.54%). (3) Jiumu sundry agency: in 2021, the income was 949 million yuan (+ 70.01%), the loss was 225578 million yuan, and the income in 2021q4 was 252 million yuan (+ 27.47%); By the end of 2021, the total number of stores of Jiumu sundries Club reached 463 (319 directly operated and 144 franchised). (4) Chenguang Technology: in 2021, the revenue was 527 million yuan (+ 11.26%), and in 2021q4, the revenue was 131 million yuan (- 2.81%).
Risk warning: new categories and new business development are not as expected; Increased industry competition affects profitability.
