Chenguang Co., Ltd. ( Shanghai M&G Stationery Inc(603899) )
The annual revenue increased by 34%, the net profit increased by 21%, and the growth accelerated in the fourth quarter. The company achieved revenue of 17.61 billion yuan in 2021, + 34.0%; The net profit attributable to the parent company is 1.52 billion yuan, + 20.9%. In 2021, roe was 27.0%, + 0.1 P.P., and profitability was improved. The turnover days of inventory / accounts receivable / accounts payable were 38 / 34 / 72 days respectively, with a year-on-year decrease of 11 / 2 / 10 days. The asset liability ratio is 42.9%, most of which are accounts payable, and the interest bearing liability ratio is 1.6% (- 0.3 P.P.). The dividend payout rate remained above 30%, which was 36.7% in 2021. In the fourth quarter, the growth rate of performance increased by 16 P.P. month on month, with beautiful growth performance. The net profit attributable to the parent company was 400 million yuan, + 17.0%, and the performance growth rate increased by 16.4 P.P. month on month. In the fourth quarter of 2021, the revenue was 5.46 billion yuan, + 18.6%. In the fourth quarter, the annualized roe was 26.9%, with a year-on-year increase of + 0.3 P.P.
In 2021, the performance of traditional core businesses was stable, new businesses grew rapidly and profits improved. In terms of products, in 2021, the revenue of writing instruments / student stationery / office stationery / other products / office direct sales (klip) was 28.2/31.3/33.4/5.5/7.77 billion yuan respectively, with a year-on-year increase of 23.7% / 15.6% / 18.3% / 69.8% / 9.4%; The gross profit margin of kelip decreased, but the net profit margin improved, and the gross profit margin of other products was relatively stable. According to the business model, the annual revenue of traditional core business / klip / retail stores was 88.8/77.7/1.05 billion respectively, with a year-on-year increase of 17.2% / 55.3% / 61.0% respectively; In the second half of the year, the revenue was 4.76/4.64/570 billion yuan respectively, with a year-on-year increase of 3.0% / 36.4% / 35.3% respectively; The net interest rates were 14.8% / 3.1% / - 2.0% and 15.1% / 3.7% / - 3.4% respectively in the second half of the year.
In 2022, the growth momentum of all businesses continued, and the new five-year plan was solidly promoted. China's consumption upgrading, product upgrading and channel reform promoted terminal sales and helped the medium and long-term steady growth of traditional business by 10% - 15%. Large retail stores are growing rapidly and the model is running through. In the medium term, Jiumu sundry agency is expected to open 100 new stores every year. The revenue targets of klip in 2022 and 2025 are 10 / 20 billion yuan respectively, and the net interest rate is expected to continue to increase.
Risk tip: the epidemic repeatedly affects the passenger flow of offline stores, and the development of new channels is less than expected
Investment advice: strong growth in revenue and performance, optimistic about medium-term high-quality growth. In 2021, under the influence of double reduction, epidemic situation and high base, the company still achieved rapid growth in revenue and performance. The company's traditional business industry has sufficient growth space, the smooth promotion of high-end products, deep channel barriers and continuous improvement; The new business operation capacity has been improved and the development momentum is strong. As the company's new business model will drive the profit margin to rise, we slightly raised the profit forecast. It is estimated that the company's net profit from 2022 to 2024 will be RMB 1.89/22.7/2.72 billion respectively, with a year-on-year increase of 24.2% / 20.6% / 19.7% and EPS of RMB 2.03/2.45/2.93 respectively. The current share price corresponds to PE of 23.7x/19.6x/16.4x. The current valuation is in the bottom range of the company's valuation in the past three years, which is optimistic about the company's long-term growth, Maintain a reasonable valuation to 78-80 yuan (corresponding to 2023 pe32-33x), and maintain the "buy" rating.
