\u3000\u3000 Shenzhen Jinjia Group Co.Ltd(002191) (002191)
\u3000\u30001. Cigarette label industry leader, benefited from the upgrading of industry structure, and the main industry of cigarette label grew steadily
In recent years, the company has actively complied with the changes of the tobacco industry, continuously optimized the product structure, strengthened the development of customer channels, enhanced customer adhesion and improved the market share. In 2021q1-q3, the company achieved a revenue of 3.65 billion yuan (+ 21.22%) and a net profit of 841 million yuan (+ 22.9%). With the implementation of the “cigarette upgrading strategy”, excellent structure and brand education have become important work requirements of the tobacco industry. The company has strong design service ability and high printing technology level, and the market share is expected to continue to increase.
\u3000\u30002. Develop medium and high-end paper printing and packaging to comply with the trend of consumption upgrading
1) as an important carrier for delivering brand value, the paper packaging industry has gradually evolved to high-end and high-quality products in recent years. The net interest rate of high-end tobacco and alcohol packaging is the highest, about 20% – 30%. In terms of color box products, the company continued to adjust and optimize the product structure around customer needs, actively expand new customers, and further improve the packaging share in the fields of high-quality tobacco and alcohol, 3C electronics, etc. in 2021h1, the company’s color box products achieved a revenue of 509 million yuan (+ 21.26%) and a gross profit margin of 43.71%.
2) make efforts to consolidate the comprehensive competitiveness of high-end film products. Toyota, a subsidiary, purchased the equity of Innolux packaging and promoted the iterative upgrading of film products: in 2021h1, Toyota signed an agreement to acquire the remaining 70% equity of Qingdao Innolux. The company continued to promote the iterative upgrading of smoke film products, promote the implementation progress of color film and degradable film materials projects, and continuously improve the competitiveness of products.
\u3000\u30003. Comprehensively layout the new tobacco core supply chain and create the second pole of growth!
1) atomized supply chain: in the post regulatory era, it is expected to benefit from the improvement of upstream and downstream concentration of the industrial chain. With the gradual implementation of China’s e-cigarette supervision, it will have a significant impact on the concentration of upstream and downstream private enterprises in the links they can participate in. Driven by technology, the company’s revenue scale has increased rapidly in recent years; The company’s in-depth layout from tobacco oil, atomization equipment and brands to overseas channels is expected to significantly benefit from the development dividend of increasing the concentration of atomization market in the future.
2) HNB supply chain: actively cooperate with China Tobacco in R & D and expand the depth of technology and service categories. In 2018, it established a joint venture subsidiary with Yunnan China tobacco to develop and layout heating non combustion appliances; Jinjia technology, a subsidiary, provides R & D and production services of new tobacco sets for China Tobacco customers in Yunnan, Guizhou, Guangxi, Shanghai and Henan. At the same time, it is expected that the additional capital will be invested in Changyi technology and Jiju electronics, which is expected to benefit from the supply of flavors, new materials and heating appliances in heated non smoked bombs. In addition, by holding Hengtian business, we will build a comprehensive platform for overseas trade services of the tobacco industry, form a comprehensive service system from the R & D and manufacturing of cigarette label products to the trade and export of cigarette products, and strengthen the depth of services and cooperation.
\u3000\u30004. Investment suggestion: we believe that with the gradual implementation of supervision, leading enterprises with qualifications, standardized production and mature technology will stand out, and new tobacco is expected to become a new profit growth point of the company. Therefore, we raised the company’s revenue from 2021 to 23 to 5.36/67.65/87.17 (the previous value was 5.258/64.26/76.94) billion yuan, The net profit is RMB 1.09/14.2/18.5 (the previous value is RMB 1.067/13.0/1.586 billion). We expect that the net profit of traditional business will be about 1.6 billion in 2023, giving 23 times PE; The new tobacco business achieved a net profit of about 250 million yuan. Considering the company’s active position in the new tobacco supply chain, it was given 40 times PE, with a total corresponding target market value of 46.8 billion yuan and a target price of 31.8 yuan, maintaining the “buy” rating. Risk tips: industrial policy risk, new product market development risk, raw material price rise risk, business development risk, cooperation or investment process is not as expected.
