Chenguang Co., Ltd. ( Shanghai M&G Stationery Inc(603899) )
Event: Chenguang shares released the first quarterly report of 2022. In 2022q1, the company realized an operating 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 non net profit attributable to the parent deduction was 256 million yuan, a year-on-year decrease of 13.34%.
The epidemic disturbance has a short-term impact on Q1 performance, and the business of klip has maintained rapid growth
In terms of products, stationery and other traditional products have been repeatedly affected by the epidemic, resulting in performance pressure, and klip highlights growth toughness. Specifically, 1) the revenue of 22q1 writing instrument products decreased by 25.37% year-on-year to 499 million yuan, and the gross profit margin increased by 1.29 PCT; 2) The revenue of student stationery products decreased by 6.69% year-on-year to 719 million yuan, and the gross profit margin increased by 111 PCT; 3) The revenue of office stationery products decreased by 7.18% year-on-year to 730 million yuan, and the gross profit margin increased by 1.08 PCT; 4) The revenue of office direct selling products increased by 46.40% year-on-year to 2.146 billion yuan, and the gross profit margin decreased by 1.20 PCT.
In terms of business, 1) in terms of traditional retail, affected by the epidemic, the company’s offline retail 22q1 revenue decreased by about 14.80% year-on-year to 1.7 billion yuan; 2) In terms of office direct sales, Chenguang kelipu 22q1 maintained rapid growth, and its revenue increased by 46.4% year-on-year to 2.146 billion yuan; 3) In terms of large retail stores, the revenue of Chenguang life hall 22q1 increased by 9.02% to 265 million yuan year-on-year, of which the revenue of Jiumu sundry Club increased by 9.90% to 243 million yuan year-on-year; 4) In terms of online channels, the revenue of Chenguang technology 22q1 increased by 9.47% year-on-year to 118 million yuan. As of 22q1, the company has 532 large retail stores across the country, including 60 Chenguang life hall and 472 Jiumu sundry Agency (321 Direct stores and 151 franchise stores).
The increase of kelipu’s share affects the gross profit margin, and the expense rate is well controlled
In terms of profitability, the comprehensive gross profit margin of 22q1 company was 21.71%, a year-on-year decrease of 2.92pct, mainly due to the increase in the proportion of low gross profit margin kelip business. 22q1’s net profit margin was 6.76%, down 1.90pct year-on-year.
The overall cost control of the company is good. During 22q1, the cost rate was 13.37%, a year-on-year decrease of 1.52pct, and the cost rates of sales / management / R & D / finance were 8.08% / 4.31% / 1.07% / – 0.09% respectively, a year-on-year decrease of – 0.67 / – 0.58 / – 0.17 / – 0.10pct respectively. In terms of cash flow, 22q1 company realized a net operating cash flow of 4.1821 million yuan, a year-on-year decrease of 97.45%, mainly due to the decrease of retail business income, the increase of working capital investment and the increase of notes and accounts receivable under the influence of the epidemic.
Investment suggestion: as a master of Chinese and foreign stationery, the company’s traditional business product channels continue to upgrade, and new businesses such as Chenguang kelipu and retail stores are growing rapidly, with high-quality promotion on one body and two wings. Considering that the repeated impact of the epidemic in some areas is still unclear, we expect the operating revenue of Chenguang Co., Ltd. to be RMB 21.014 billion, RMB 25.224 billion and RMB 30.324 billion from 2022 to 2024, with a year-on-year increase of 19.35%, 20.03% and 20.22%; The net profit attributable to the parent company was RMB 1.763 billion, 2.063 billion and 2.417 billion, with a year-on-year increase of 16.18%, 17.01% and 17.16%, corresponding to PE of 25.1x, 21.5x and 18.3x, maintaining the investment rating of buy-a.
Risk warning: the risk of repeated epidemic in some areas; New business development is less than expected risk; The impact of the double reduction policy exceeds the expected risk.
