Chenguang Co., Ltd. ( Shanghai M&G Stationery Inc(603899) )
2022q1 performance is under pressure, the high growth of klip business continues, and the "buy" rating is maintained
In 2022q1, the company's revenue was 4.229 billion yuan (+ 10.93%), the net profit attributable to the parent company was 276 million yuan (- 16.04%), and the net profit not attributable to the parent company was 256 million yuan (- 13.34%). The slowdown in revenue growth and the pressure on the profit side were mainly due to the "double reduction" policy and the repeated impact of the epidemic on terminal demand, as well as the high base of 2021q1. In 2022, we are optimistic about the steady development of traditional core businesses under the optimization of product structure and the improvement of channel efficiency, the improvement of the quantity and quality of klip and Jiumu sundry agency, and the unchanged profit forecast. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 1.733/20.922475 billion yuan, the corresponding EPS will be 1.87/2.25/2.67 yuan, the current share price corresponding to PE will be 25.7/21.3/18.0 times, the cultural and creative leader will be integrated, the two wings will have broad growth space, and the future can be expected, Maintain the "buy" rating.
Split Revenue: under the influence of the epidemic, the revenue of traditional core business fell year-on-year, and the business of klip continued to grow at a high rate
By category, in 2022q1, the income of writing instruments was 499 million yuan (- 25.37%), the income of student stationery was 719 million yuan (- 6.69%), and the income of office stationery was 730 million yuan (- 7.18%). The income of each category decreased to a certain extent, mainly due to the impact of the epidemic on students returning to school and the contraction of terminal demand. At the same time, the income base of each category was high in the same period of 2021. In terms of business, in 2022q1, the revenue of traditional core business (including ASUS and Chenguang Technology) is 1.818 billion yuan (- 13.56%), and the revenue of klip is 2.146 billion yuan (+ 46.40%); The revenue of Chenguang technology is 118 million yuan (+ 9.47%); Chenguang living hall (including Jiumu sundries agency) has a revenue of 265 million yuan (+ 9.02%), of which Jiumu sundries agency has a revenue of 243 million yuan (+ 9.90%). The decline in traditional core business revenue is mainly affected by the double reduction and the epidemic. The business of klip continues to grow rapidly, accounting for + 12.29 PCT year-on-year. In terms of store opening, at the end of 2022q1, there were 472 stores (+ 9), 321 Direct stores (+ 2) and 151 franchise stores (+ 7). The speed of store opening slowed down under the influence of the epidemic.
Profitability: the increase in the proportion of klip's revenue has lowered the gross profit margin, and the net profit margin is under pressure in the short term
In 2022q1, the company's gross profit margin was 21.7%, with a year-on-year increase of -2.9pct, mainly due to the significant increase in the proportion of klip revenue with low gross profit margin (year-on-year + 12.2pct), and the gross profit margin of klip decreased (year-on-year decrease of -1.2pct). The company has excellent fee control ability, and the expense rate during the period was 13.37%, with a year-on-year rate of -1.52pct. Under the comprehensive influence, the net profit rate of the company is 6.52%, with a year-on-year rate of -2.09pct and a deduction of non net profit rate of 6.04%, with a year-on-year rate of -1.69pct. It is expected that with the rise of kelipu's net profit rate under the effect of scale, high-quality cultural and creative products will gradually increase in volume, and the overall net profit rate is expected to be repaired.
Risk tip: the expansion of new categories and new businesses is less than expected, and the industry competition intensifies, affecting profitability
