Event
October 28thChenguang stationeryRelease the third quarter report of 2020. The company's 2020Q1-Q3 realized operating income of 8.538 billion yuan, an increase of 7.43% over the same period last year, a net profit of 913 million yuan, an increase of 13.85% over the same period last year, and a net profit of 793 million yuan, an increase of 4.24%.
Among them, 2020Q1/Q2/Q3 realized operating income in a single quarter.
20.84Universe 26.78Universe 3.776 billion yuan, year-on-year change-11.55% Universe 7.85% Universe 21.48%; return to parent net profit 2.30% 234,448 million Yuan, year-on-year change-10.95% 10.15% Acme 35.63%; deduction of non-homed net profit 1.74pm 2.13 pm 406 million, year-on-year change-25.21% 9.46% Universe 21.76%.
The company's Q3 performance growth exceeded expectations.
Our analysis and judgment
With the recovery of 20Q3 exceeding expectations, the recovery of traditional business, and the landing of the company's development strategy and business plan, focus and deep ploughing of channels, rapid promotion of online sales, comprehensive promotion of traditional core business, and sustained development and growth of new business, the company has maintained a healthy and stable development, further improved its comprehensive competitiveness, and continued to improve its performance in the third quarter. Benefiting from the recovery of traditional business, office direct business and government subsidies, the company's 2020Q3 operating income and return net profit increased rapidly, with an increase of 21.48% and 35.63% respectively over the same period last year. Excluding non-recurrent profits and losses such as the government, homing net profit increased by 21.76% compared with the same period last year, matching the income growth rate.
From a product point of view, 2020Q1-3 writing tools achieved business income of 1.869 billion yuan, an increase of 0.73% over the same period last year; business income of student stationery reached 2.014 billion yuan, an increase of 1.14% over the same period last year; business income of office stationery reached 1.592 billion yuan, an increase of 11.91% over the same period last year; and business income of other products reached 197 million yuan, an increase of 3.73% over the same period last year The operating income of office direct selling products reached 2.862 billion yuan, an increase of 15.24% over the same period last year.
In terms of business, the traditional core business of 2020Q1-3 increased by about 1.26% over the same period last year; Chenguang Science and Technology achieved an income of 2.862 billion yuan, an increase of 15.24% over the same period last year; Chenguang Life Hall / Jiumu grocery Society achieved an income of 432 million yuan, an increase of 2.82% over the same period last year; and Chenguang Technology achieved 339 million yuan, an increase of 69.97% over the same period last year.
(1) traditional business channels are always strong, and the proportion of online business is increasing.
In terms of traditional core business, 20Q3 traditional business has rebounded steadily, benefiting from the recovery of students' stationery, writing stationery and office stationery during the school season in September, and has become a regular employee according to our estimate. On the one hand, the company continues to focus and ploughing terminals to create perfect stores and promote the optimization and upgrading of domestic channels. By the end of June 20, the company has 36 first-level partners, second-and third-level partners in nearly 1200 cities, and nearly 80,000 "Chenguang" retail terminals. At the same time, speed up the development of online distribution channels, increase the proportion of online sales of Chenguang products, and expand the online market: on the other hand, popular stationery, boutique literary creation, office products, children's art and other four tracks are promoted in an all-round way. In addition, the company actively promotes Morninglight Alliance APP to connect headquarters, partners at all levels and terminal stores more closely with digital tools.
In addition, Chenguang Technology accelerated the development of online distribution channels, authorized more than 2000 online stores, promoted the upgrading of key stores, and combined external live broadcast cooperation with the construction of brand self-broadcast system to launch a variety of online dedicated products in collaboration with the four major product tracks, promoting the rapid growth of 2020Q1-3 Chenguang technology revenue by 69.97%.
(2) Science and technology has improved steadily, and customer development has contributed to growth.
With the slowdown of the impact of the epidemic, the business of Chenguangkopu has steadily expanded and improved. The revenue of 2020Q1-3 has reached 2.862 billion yuan, an increase of 15.24% over the same period last year. At the same time, the profitability of Chenguang Kopp shows an upward trend. The net profit rate of 2020H1 is about 2.51%, which is significantly higher than the 1.92% of 2020H1. We expect that the appearance of scale effect will contribute to the further improvement of Kelipu's profitability.
Kopp continues to expand its major customers, covering the procurement needs of large enterprises and institutions for office stationery, and helping to promote the sales of writing tools and office stationery products.
In terms of customers of central enterprises, the company was successfully shortlisted.China ResourcesGroup, Baowu Group,Aluminum Corporation Of China Ltd, China Guangzhou Nuclear Corporation, China Railway Mall, China Energy Construction, China National Offshore Oil and other group procurement projects; in terms of financial customers, they were shortlisted for UnionPay International,Shanghai Pudong Development Bank, Guangzhou Development Bank, Bank of Communications and other branch projects; in terms of Fortune 500 and other corporate customers, won the bid.Zhaopin, Shunfeng Tyson,Yuantong Express、Financial innovationGroup and other procurement projects, and successfully launched the MRO online mall.
(3) the retail stores have recovered steadily, and Jiumu has continued to open and expand its stores.
Since 20Q2, with the gradual rebound of passenger flow, the store of Chenguang Life Hall has opened and sales have gradually resumed. 2020Q1-3 Morninglight Life Hall (including Jiumu Sundries) achieved a total operating income of 432 million yuan, an increase of 2.82 percent over the same period last year, of which Jiumu Sundries achieved 360 million yuan, an increase of 17.41 percent over the same period last year.
By the end of September 2020, the company had 440 retail stores nationwide, including 106 Chenguang Life Pavilion and 334 Jiumu Sundry (221 joined 123). Affected by the epidemic, the current store passenger flow has not yet returned to the level of the same period. We believe that the same store income and opening rhythm of Chenguang Life Hall (including Jiumu Sundry Club) are expected to continue to pick up, and the company is actively creating boutique stores to organize goods and service models. the pace of comprehensively developing Jiumu Sundry Club and pilot optimization of Chenguang Life Hall will continue to move forward.
Profitability remained stable and expenses increased slightly during the period
In terms of profitability, the company's 2020Q1-3 sales gross profit margin was 27.08%, an increase of 0.29pct over the same period last year, which was promoted by the improvement of product structure and online share. The net sales profit margin was 10.47%, an increase of 0.24pct over the same period last year, mainly due to the influence of government subsidies. Among them, the single-quarter gross profit margin of 2020Q3 was 27.09%, down 0.62 pct from the same period last year, and the net sales profit margin was 11.79%, an increase of 0.92pct over the same period last year.
In terms of period expenses, the company's 2020Q1-3 expense rate was 15.49%, an increase of 0.96pct over the same period last year. Among them, the sales expense rate increased by 0.47pct to 9.29% compared with the same period last year, mainly due to the increase in salary, benefits and rental fees; the management expense rate increased by 0.27pct to 4.72% compared with the same period last year, mainly due to the company's implementation of restricted stock incentives, and the related share payment fee was 42.7861 million yuan; the financial expense rate increased by 0.11pct to 0.02% over the same period last year, mainly due to the exchange loss and the interest payment of Anshuo Culture and Education. The rate of R & D expenditure increased by 0.09pct to 1.44% compared with the same period last year.
Investment advice:
Despite the short-term impact of the epidemic, but the company as a master of stationery at home and abroad, must-choose consumer advantage is highlighted, one body and two wings are still steadily moving forward, firm and continuous recommendation. Referring to the company's equity incentive plan, we expect the total operating income of Chenguang Stationery from 2020 to 2022 to be 128.81, 163.33 and 19.769 billion yuan, up 15.62%, 26.80% and 21.04% year-on-year, and the net profit of 12.10,14.87 and 1.83 billion yuan, up 14.13%, 22.91% and 23.04% over the same period last year, corresponding to PE of 60.1x, 48.9x and 39.7x, maintaining the "buy" rating.
Risk Tips:
The impact of the fluctuation of the epidemic exceeded expectations; the demand for traditional business fell sharply, the development of new business was less than expected, and competition in the industry intensified.