\u3000\u3000 Shenzhen Jinjia Group Co.Ltd(002191) (002191)
Event: on January 10, the company announced that it agreed that Jinjia Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) technology, a wholly-owned subsidiary, would increase the capital of Jiaju electronics by 23.8 million yuan. After the transaction was completed, Jinjia Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) held 40% equity of Jiaju electronics.
Jiaju electronics is a comprehensive enterprise focusing on new tobacco heating non combustion related categories and integrating product R & D, production and sales. Its existing business includes the R & D and production of heating non combustion herbal cigarette bombs, heating non combustion innovative cigarette sets and heating non combustion herbal cigarette bombs automatic production equipment. Jia Ju has fully independent intellectual property rights of the automatic filling production line of herbal medicine. Now it sells its own brand of heating non burning herbal smoke bombs, and sells products to Chinese mainland, Malaysia and other countries or regions. It also provides ODM/OEM services for overseas brand customers to burn non burning grass smoke bombs, and the sales area covers Southeast Asian countries such as Japan, Malaysia and Indonesia. And European countries such as Britain and the Czech Republic; Jiaju electronics core team has strong R & D strength of cigarette sets and rich product types, providing design and R & D services and heating non combustion cigarette sets for brand customers at home and abroad; The automatic production equipment of heating non combustion herbal smoke bomb independently developed by Jiaju electronics has been sold to the outside world, and continues to improve the performance of the equipment and broaden the market. The investment layout helps the company to carry out collaborative extension of brand operation, international development and operation, automation equipment and production in the direction of heating and non combustion, plays a positive synergistic role in the layout and reserve of the company in the new tobacco industry chain, is conducive to the company’s multi-point flowering in the field of new tobacco, and improves the supporting service capacity and comprehensive competitiveness to downstream customers.
The cigarette label plate is stable and good, the large packaging strategy is stable and upward, and actively store energy for new tobacco
As a leader in the tobacco label industry, the company has continued to achieve effective cost control and leading technical level through large-scale centralized mining and production process control in recent years, and continues to maintain the leading position in the tobacco label industry. In the fine wine bag business, through the comprehensive layout of multiple regions and varieties, the revenue of fine wine box increased rapidly. In terms of new tobacco, always guided by policy requirements and customer needs, Jinjia technology, as a comprehensive manufacturer and comprehensive service provider of new tobacco products such as electronic atomization equipment and heating non combustion appliances, continues to strengthen cooperation and expansion with customers at home and abroad. We believe that with the gradual implementation of China’s supervision, leading enterprises with qualifications, standardized production and mature technology will stand out and enjoy the blue ocean market of new tobacco. New tobacco is also expected to become a new profit growth point of the company.
Investment advice
We expect the company’s revenue to be RMB 5.258/64.26/7.694 billion and net profit to be RMB 1.067/13.0/1.586 billion in 2021-23. Based on the company’s scale, technical advantages and large packaging expansion, actively card new tobacco and maintain the “buy” rating.
Risk tips: order fluctuation risk, new tobacco promotion less than expected, policy risk, cooperation or investment process less than expected, capital increase cooperation process less than expected, Jiaju electronic business development less than expected
