Chenguang Stationery (603899): Better-than-expected results, optimistic about continued heavy volume of new business
Investment Highlights Event 1: Chenguang Stationery released the 2018 annual report, and the company achieved revenue of 85 in 2018.
35 ppm, an increase of 34 in ten years.
3%; net profit attributable to mother 8.
10,000 yuan, an increase of 27 in ten years.
3%; Realize net profit after deduction.
50,000 yuan, an increase of 37 in ten years.
In the fourth quarter alone, the company achieved revenue of 24.
1ppm, an increase of 29 per year.
4% (Q1 / Q2 / Q3 / Q4 company revenues increased by 30.
3% / 41.
8% / 36.
9% / 29.
4%); realize net profit attributable to mother 1.
80,000 yuan, an increase of 27 in ten years.
1% (Q1 / Q2 / Q3 / Q4 companies’ net profit attributable to their mothers increased by 23 respectively.
2% / 38.
2% / 24% / 27.
1%); net profit after deduction to non-returned mother 1.
80,000 yuan, an increase of 70 in ten years.
5% (Q1 / Q2 / Q3 / Q4 companies deduct non-return after returning to the mother net profit increased by 15.
4% / 37.
5% / 38.
1% / 70.
The company plans to achieve revenue of 10.8 billion yuan in 2019, a year-on-year increase of 27%.
Event 2: The company announcement intends to 1.
9.32 million yuan, acquired 56% equity of Ashuo Stationery (Shanghai) Co., Ltd.
The value of the underlying asset-based method of the acquisition target is 3.
450,000 yuan, the corresponding price of 56% equity.
93.2 billion, with a PB of 1, which is reasonable.
Shanghai Anshuo mainly produces pencils, crayons, watercolor pens, ballpoint pens, oil sticks, stationery boxes, sharpeners, erasers, stationery rulers, lead cores, pencil plates and materials and packaging materials used in the production of pencils, and sells its own products.The owned MARCO brand has a high brand awareness in the wood pencil industry.
Based on the fact that Shanghai Anshuo still has overlapping competitive advantages in the wooden pencil industry, it is expected that it will have a synergistic effect with Chenguang Stationery after the acquisition.
Volume and price of the three major products went up, and gross profit margin exceeded previous growth.
In terms of products, the company’s writing stationery realized revenue19.
5 ‰, an increase of 8 in ten years.
8%, volume and price increased by 3.
6% / 5%; student stationery achieved revenue of 18.
6 ppm, an increase of 13 in ten years.
8%, volume and price increased by 5.
9% / 7.
4%; office stationery achieved revenue of 46.
1 ppm, an increase of 62 in ten years.
8%, volume and price increased by 28.
2% / 27%; gross margin, writing stationery /无锡桑拿网 student stationery / office stationery gross margins were 34.
8% / 33.
5% / 19%, 0 in ten years.
5 points / 1.
9pct / 0.
The company’s comprehensive gross profit margin is 25.
8%, 0 per year.
Traditional business has grown steadily, and new business has grown at a high rate.
In 2018, the company’s traditional business realized revenue of about 55.
5 ‰, an increase of 16% in ten years; the new business achieved revenue of about 29.
800 million, a 90% increase in ten years.
In terms of traditional business, the company 1) has accelerated channel expansion. It has 35 first-tier partners nationwide, second- and third-tier partners in nearly 1,200 cities, and more than 7 “Chenguang” retail terminals.
2) Continue to promote the improvement of the quality of single stores; 3) Comprehensively promote the four major tracks of the masses, boutiques, offices and children’s beauty, and achieved high double-digit growth.
In terms of new business, Colip has gradually realized revenue by promoting cooperation with governments and major customers25.
9 ‰, an increase of 106% in ten years; Chenguang Life Museum (including Jiumu) achieved sales revenue with the support of store expansion (already had 255 stores in 2018) and optimization3.
1 billion, an annual increase of 49.
Chenguang Technology has effectively authorized 1,000 businesses on major online platforms, laying the foundation for the rapid growth of new businesses.
The expense ratio was basically flat, and ROE was stable and advancing.
The company’s selling expenses in 2018 were 9.
2%, a year to raise 0.
2pct; the rate of management expenses (including research and development expenses) 5.
8%, a decline of 0 per year.
2pct; financial expense ratio -0.
1%, a decline of 0 per year.
1pct; Expense rate remains basically stable.
Company net margin 9.
5%, a slight decrease of 0 every year.
The company’s ROE was 25 in 2018.
8% (24 in 2017.
1%), of which net profit margin was 9.
5% (previous value was 9.
9%); asset turnover rate 1.
7 times (previous value was 1.
63 times, indicating that Colip’s high-speed heavy volume hedged the impact of asset growth on ROE), and the equity multiplier was 1.
61 (previous value is 1.
Investment suggestion: We predict that the company will realize net profit attributable to the parent company in 2019-21.
$ 2.5 billion.
5%, the corresponding EPS is 1.
64 yuan, considering the company’s high growth expectations, upgrade the company’s rating to “buy” rating.
Risk warning: New business expansion is less than expected, and competition in the stationery industry is exacerbated.