Zhongrong (301223): the company is a paper printing and packaging solution supplier for FMCG and consumer electronics market, including folding color boxes, gift boxes, promotional display tools, e-commerce boxes, intelligent packaging and so on. From 2019 to 2021, the company achieved operating income of 2.063 billion yuan / 2.177 billion yuan / 2.544 billion yuan, YOY of 9.38%, 5.49% and 16.87%, respectively, and the annual compound growth rate of three years' operating income was 10.48%. The net profit of homing was 175 million yuan / 186 million yuan / 212 million yuan, and the YOY was 48.66%, 6.16%, 13.98%, and 21.62%, respectively. During the latest reporting period, 2022H1 achieved an operating income of 1.134 billion yuan, down 4.98% from the same period last year, and a net profit of 98 million yuan, an increase of 2.03% over the same period last year. The company expects the net profit attributable to the owner of the parent company from January to September 2022 to be about 145.95 million to 161.32 million yuan, changing from-5.00% to 5.00% over the same period last year.

Investment highlights: 1, the company is focused on the field of fast consumer goods in the domestic leading paper packaging printing manufacturers, creative design ability is more outstanding. At present, the concentration of the domestic printing and packaging industry is low, and enterprises are focused on individual downstream segments to create a differentiated competitive advantage. Founded in 1990, through years of development, the company has become a leading manufacturer in the field of fast consumer goods and consumer electronics in China. It has cooperated with key customers such as Procter & Gamble Co, Mars, Philips and Mondelez International Inc for more than 15 years, and Colgate for more than 10 years. In addition, it has established cooperative relations with dozens of well-known enterprises at home and abroad, including Philips, Vida Paper, Tomson Baijian, Leng Suoling and other well-known enterprises at home and abroad. The company's products have been highly recognized by customers and have been awarded "Global Outstanding supplier Award" by Procter & Gamble Co for seven times. won Mars'"Packaging Innovation Award" and "Outstanding operator", Mondelez International Inc's "Innovation and Sustainable Development Award", Philips "supplier Sustainable Development and capability Promotion Project Gold Award" and other awards. Outstanding creative design ability is one of the core competitiveness of the company. during the reporting period, the proportion of products dominated by the company's creative design is more than 30%. At the same time, a number of creative designs of the company have won silver and bronze awards in Guangdong Star Creative Competition, Pentawards (Global Packaging Design Competition) International Design Silver Award, iF Design Award and Red Dot Design Award and other well-known creative design awards at home and abroad. 2. The company has successfully entered the field of medicine and cigarette label printing through the construction of factories in Shenyang and Tianjin, and the continuous development of new business areas is expected to inject power into the company's performance growth. The company has four production bases in Zhongshan, Tianjin, Shenyang and Kunshan, among which Shenyang factory focuses on developing pharmaceutical customers in Northeast China, and Tianjin factory develops pharmaceutical and cigarette label printing customers in North China. In the field of tobacco label printing, the company has successfully reached a cooperative relationship with Hebei Zhongyan, providing cigarette package services for Hebei Zhongyan's diamond brands, and the revenue of tobacco label products in 2020 is nearly double that of 2019; in the pharmaceutical field, the company has cooperated and gradually expanded the scale of cooperation with Bayer in the global top 500 and domestic well-known pharmaceutical companies such as Tongrentang, Zhongxin Pharmaceutical, Wantong Pharmaceutical and North China Pharmaceutical. Considering that the company's revenue from customers in daily chemical, food, health products and other downstream areas other than electronics accounts for only 8.55%, the continued development of new business areas may give a better impetus to the company's performance growth.

Comparison with listed companies in the same industry: the company's main products include folding color boxes, gift boxes and other paper packaging and printing products; according to the product type, Jinjia shares, Yutong Technology, Jihong shares and Global Printing are selected as comparable listed companies. According to the above comparable companies, the average income of the industry in 2021 is 7.008 billion yuan, PE-TTM (arithmetic average) is 27.83X, and sales gross profit margin is 25.10%. Comparatively speaking, the company's revenue scale and gross profit margin are lower than the industry average.

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