Chenguang Co., Ltd. ( Shanghai M&G Stationery Inc(603899) )
Event: in 2021, the operating revenue reached 17.607 billion yuan, a year-on-year increase of + 34.02%; The net profit attributable to the parent company was RMB 1.518 billion, a year-on-year increase of + 20.9%, and the net profit attributable to the parent company after deduction of non-profit was RMB 1.35 billion, a year-on-year increase of + 22.38%.
Comments:
The business growth momentum of Keli universal retail stores was strong, and the annual operating performance was in line with expectations. In terms of business, the company's traditional core business / klip / retail store business achieved an operating revenue of RMB 8.880/77.661054 billion respectively, with a year-on-year increase of + 17% / + 55% / + 61% respectively. Keli universal retail store business succeeded in taking over the traditional core business and became the main growth driver of the company, and the annual operating performance was in line with expectations. In terms of single quarter, the company achieved revenue of 5.456 billion yuan in Q4 single quarter, a year-on-year increase of + 18.61%, net profit attributable to parent company of 401 million yuan in Q4 single quarter, a year-on-year increase of + 16.98%, and net profit attributable to parent company of 357 million yuan in Q4 single quarter, a year-on-year increase of + 15.35%.
Changes in business structure resulted in a decline in gross profit margin. The proportion of office direct sales business with low gross profit margin (gross profit margin: 9.37%) increased rapidly, and the company's annual gross profit margin increased from -2.15pcpts to 23.21% year-on-year due to factors such as the rise of raw material prices during the year. However, the company's expense control is effective, and the expense rate during the period is -0.99pcpts to 13.28% year-on-year. Among them, the sales expense rate is -0.46pcpts to 7.94%, the management and R & D expense rate is -0.5ppts to 5.3%, and the financial expense rate is -0.03pcpts to 0.04%. The comprehensive impact on the company's net profit margin is -0.94pcpts to 8.71% year-on-year, and the decline of net profit margin is less than that of gross profit margin.
The profitability of new businesses has gradually improved, and it is optimistic that the profitability of the company will gradually pick up. In the whole year, the company realized a net profit of - 21 million yuan from the business of Chenguang living hall, and the loss range has been significantly narrowed compared with the same period last year. In terms of the number of stores, by the end of 2021, the company had 523 large retail stores, including 60 Chenguang life hall and 463 Jiumu sundries Club (319 directly operated and 144 franchised). We believe that with the improvement of the epidemic situation and the gradual opening of the profit model of Jiumu sundry agency, the scale effect of Chenguang kelipu is gradually released and refined management is focused on cost reduction and efficiency increase, and the profitability of the company is expected to gradually pick up.
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. At the beginning of the new five-year strategy, the company performed well, the traditional core business continued to grow steadily, and the new business has successfully taken over as the main driving force of the company's growth. In addition, the company acquired Beckman, a high-end schoolbag brand in Norway, to explore a new growth curve, and the company's long-term growth momentum remains unchanged. We maintain the profit forecast. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 18.1/21.4/2.59 billion respectively, corresponding to the current market value PE of 25 / 22 / 18x 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.
