Chenguang Co., Ltd. ( Shanghai M&G Stationery Inc(603899) )
Event: the company released the first quarterly report of 2022. During the reporting period, the company achieved a revenue of 4.229 billion yuan, a year-on-year increase of 10.93%; The net profit attributable to the parent company was 276 million yuan, a year-on-year decrease of 16.04%; The basic earnings per share is 0.3 yuan / share.
The cost reduction and efficiency increase continued to deepen, and the net interest rate decreased year-on-year. In the first quarter of 2022, the company’s comprehensive gross profit margin was 21.71%, a year-on-year decrease of 2.92% and a month on month increase of 0.61%. During the period, the expense rate of the company was 13.37%, with a year-on-year decrease of 1.52% and a month on month increase of 1.06%. Among them, the sales expense rate was 8.08%, with a year-on-year decrease of 0.67%; The management expense ratio was 4.31%, a year-on-year decrease of 0.58%; The financial expense ratio was -0.09%, with a year-on-year decrease of 0.1%; The R & D expense ratio was 1.07%, a year-on-year decrease of 0.17%. During the reporting period, the company’s net interest rate was 6.76%, a year-on-year decrease of 1.9% and a month on month decrease of 0.84%. The decline of the company’s profitability is mainly due to: during the reporting period, under the background of the decline of traditional business revenue, the company’s office direct sales business grew rapidly year-on-year, and the proportion of revenue further increased to 50.74%, while the gross profit margin of this business segment was only 9.3%, driving the decline of the overall profitability.
The revenue of traditional businesses declined and the performance of emerging businesses was brilliant. The revenue of traditional business decreased. During the reporting period, the revenue of the company’s writing tools / student stationery / office stationery was 499 / 719 / 730 million yuan respectively, with a year-on-year decrease of 25.37% / 6.69% / 7.18% respectively. The retail business developed steadily. During the reporting period, Chenguang living hall achieved a revenue of 265 million yuan, a year-on-year increase of 9.02%. By the end of the reporting period, the company had 532 large retail stores in China, including 60 Chenguang living hall and 472 Jiumu sundries club. The office direct sales business continued to grow rapidly. During the reporting period, Chenguang kelipu achieved a revenue of 2.146 billion yuan, a year-on-year increase of 46.4%.
Investment suggestion: the company continues to optimize the layout of traditional core business, adjust product structure and improve channel quality. At the same time, the business of large retail stores is improving, and the office direct sales business continues to grow rapidly. It is expected that the company will achieve basic earnings per share of 1.99/2.39/2.85 yuan / share in 2022 / 23 / 24, and the corresponding PE is 24x / 20x / 17x, maintaining the “recommended” rating.
Risk tip: the risk that the economic growth is less than expected; The risk of intensified market competition.
