24Q1 revenue/net profit increased by 12.37%/13.87%. Maintaining the “increase” rating, the company released its quarterly report for the year 24. 24Q1 achieved revenue of 5.485 billion yuan (yoy +12.37%), net profit to mother of 380 million yuan (yoy +13.87%), after deducting non-net profit of 328 million yuan (yoy +11.10%). Against the backdrop of weak terminal demand, the company's brand/product/channel advantages were highlighted. Operations started steadily in the first quarter, and achieved a steady increase in both revenue and profit. We maintain our profit forecast. The net profit for 24-26 is estimated to be RMB 18.23/21.54 /RMB 2,522 million, respectively, and the corresponding EPS of RMB 1.97/2.32/2.72, respectively. Referring to comparable company Wind's 24-year PE average expectation, considering the company's traditional business channels and outstanding brand advantages, the new business maintained rapid expansion, maintained the company's 25-fold PE in 24 years, maintained a target price of 49.25 yuan, and maintained a “gain” rating.
Traditional core business growth is accelerating, and major retail stores are maintaining rapid growth by business segment: 1) We expect 24Q1 offline traditional core business revenue to increase 9.5% to 1,921 billion yuan, which is faster than 23Q4; at the same time, the company's online business continues to develop, and Chenguang Technology's revenue also increased 32.72% to 247 million yuan in 24Q1, and maintained rapid growth under a high base; 2) Colipu continues to develop customers in the central enterprise/government/finance/MRO sector, and 24Q1 revenue also increased 11.59% to 2,947 million yuan. Gross margin increased 0.78pct to 7.23% month-on-month; 3) In terms of major retail stores, 24Q1 Chenguang Living Center (including Jiumu Sundries Club) revenue also increased 23.53% to 371 million yuan, of which Jiumu Sundries Club's revenue also increased 25.05% to 348 million yuan, and is still growing rapidly. As of 24Q1, the company had 678 major retail stores nationwide, including 639/39 Jiumu Sundries Club/Chenguang Living Center.
Revenue in various categories increased steadily. The gross margin of student stationery/writing tools was fixed year on year by product. 24Q1 student stationery revenue increased 17.12% year over year to 854 million yuan, gross margin increased 1.00 pct to 34.68% year over year; office stationery revenue increased 6.41% year over year to 100 million yuan, gross margin decreased 0.67 pct to 27.46% year on year; writing tool revenue increased 15.74% to 565 million yuan year on year, gross margin increased 3.34 pct to 43.83% year on year . In addition, 24Q1 office direct sales revenue also increased 11.59% to 2,947 billion yuan, and gross margin decreased by 0.01 pct to 7.23% year over year.
24Q1 sales gross margin also increased 0.49 pct, and the gross sales margin increased 0.49 pct to 20.17% year over year during the period. We judge that this was mainly due to changes in business structure; in addition, the first quarter was generally a high point for the company's individual quarterly expense ratio. The 24Q1 period cost ratio was +0.18 pct to 11.97% year over year, of which the sales expense ratio was +0.43 pct to 7.41% year on year, and the management+R&D expense ratio was -0.10 pct to 4.82% year on year. The financial expense ratio was -0.14pct to -0.26% year over year. Under the combined impact, the company's net sales margin fell slightly by 0.13pct to 7.36% year on year.
Risk warning: Terminal demand falls short of expectations, double reduction policy impact, and new business development falls short of expectations.