Performance review
1-3Q22 performance is lower than we expected.
The company announced 1-3Q22 results: revenue of 3.942 billion yuan, year-on-year + 8.0%; net profit of 585 million yuan, year-on-year-28.3%; deduction of non-return net profit of 506 million yuan, year-on-year-28.9%. Due to the impact of the epidemic on terminal consumption, we expect the adjustment of the product structure to lead to a decline in gross profit margin and lower performance than we expected.
On a quarterly basis, the company's 1Q/2Q/3Q22 realized revenue of 13.79%, 12.65%, 1.298 billion yuan respectively, an increase of 15.4%, 1.0%, 7.9%, respectively, and a net profit of 3.04%, 19.6%, 86 million yuan, respectively, with a year-on-year change of + 20.9%, 23.3%, and 72.3%, respectively.
Trend of development
Income maintained steady growth. The company's 1-3Q22 revenue increased by 8.0% compared with the same period last year, of which 3Q22 revenue increased by 7.9% compared with the same period last year. We expect that the shipments in East China, where the company's tobacco label business was affected by the epidemic in East China in the second quarter, may have recovered in the third quarter. In addition, we expect the company's new business, such as color boxes and new tobacco, to continue to grow rapidly.
Profitability is under pressure. The company's 1-3Q22 gross profit margin fell 5.0ppt to 28.59% compared with the same period last year. 3Q22 gross profit margin dropped 10.72ppt to 21.73% compared with the same period last year. We believe that the company's product structure has been adjusted mainly due to the impact of the epidemic on terminal consumption. During the period of 1-3Q22, the expense rate increased 2.0ppt to 13.38% compared with the same period last year, of which the sales / management / finance / R & D expense rate changed from + 0.2/+1.8/+0.2/-0.2ppt to 1.54% to 7.6%. Affected by the decline in gross profit margin and lower investment income, the company's 1-3Q22 net profit margin fell 7.5ppt to 14.85% compared with the same period last year.
Pay attention to the development of the company's color box business and new tobacco business. 1) Color box business: the company continues to increase the development of boutique cigarette cases, wine bags, consumer electronic packaging, daily chemical packaging and other new fields, and the boutique cigarette case market continues to expand under the upgrading of tobacco industrial structure. we estimate that the scale of the wine bag market and the consumer electronic packaging market is more than 30 billion yuan, and the wine bag market is scattered and the degree of marketization is enhanced. Jinjia and other national packaging leading enterprises are expected to seize market share by virtue of excellent product quality, higher production efficiency and better service. 2) New tobacco: at present, the penetration rate of new tobacco still has much room for improvement, and the company actively promotes the extension of industrial chain, capacity construction and customer development in the field of atomization and HNB. We expect that with the further standardization of industry policies on the market in the future, high-quality industry leaders such as Jinjia are expected to benefit.
Profit forecast and valuation
Based on the higher-than-expected impact of the epidemic, the 2022 Universe reduced its 2023 revenue by 7.5% to 6288 million, and its 2022 EPS by 39.2% to 0.52. 66 in 2023, respectively, and the current share price corresponds to the price-to-earnings ratio of 15,511 in 2023. Maintain an industry rating that outperforms. Based on the adjustment of the earnings forecast and taking into account the changes in market risk preference, the target price is reduced by 50% to 10.00 yuan, corresponding to the price-to-earnings ratio of 19bp in 2023, which is 33% higher than the current stock price.
Risk.
Industry policy changes; new business expansion is not as expected.