occurrences
The company released its 2021 annual performance report: 2021 revenue of 5.09 billion yuan (+21.3%); net profit of 1.01 billion yuan (+22.1%); net profit of non-return mother of 800 million yuan (+3.7%); ROE (weighting) of 13.7% (+2.25pct).
Brief review
21Q4 revenue and net profit of the mother increased by 21.5%/16.7%. The annual results were in line with expectations and the equity incentive target was achieved. Looking at a single quarter, 21Q4 revenue was 1,435 million yuan (+21.5%, 21Q1/Q2/Q3 increased 31.7%/24.0%/10.0%), 21Q4 net profit was 189 million yuan (+16.7%, 21Q1/Q2/Q3 increased 17.2%/27.2%/25.7%), and 21Q4 net profit after deducting non-homing income was 97 million yuan (-29.96%), mainly due to low gross margin supply chain revenue and an increase in e-cigarette revenue share. Fumo's net profit increased 22.1% year-on-year in '21, in line with expectations, and achieved the equity incentive target (Fumo's net profit growth rate in '21 was no less than 22%).
The main cigarette labeling business has gradually resumed, and the expansion of the premium cigarette and wine box categories has led to an expansion in the scale of color boxes. Due to the recovery period of the company's business in some regional markets (such as Yunnan and Hubei) and price cuts for some old products, tobacco label revenue in '21 fell 4.07% year-on-year to 2.3 billion yuan. With the promotion of bidding, the main cigarette labeling business will gradually resume; furthermore, as the company further expands the field of tobacco labeling, the profit margin of the cigarette labeling business is expected to continue to rise steadily. Color box products mainly benefited from premium cigarette boxes+wine boxes. Revenue from color box products increased 23.5% to 1,136 billion yuan in '21. The company adheres to a high-end business strategy and grasps the market trend of high-end tobacco and alcohol packaging and 3C product packaging upgrades. Liquor Packaging has now achieved cooperation with Maotai, Wuliangye, Yanghe, Xiju, Fenjiu and other customers.
A new type of tobacco that accelerates card slots has now completed the comprehensive layout of the atomization and HNB industry chains.
The company's continuous investment in the new tobacco sector has achieved remarkable results. It has made breakthroughs in industrial chain expansion, customer expansion, and production capacity construction. The new tobacco sector earned 169 million yuan (+381.2%) in '21. The company continues to consolidate the advantages of new tobacco cards and build a new tobacco industry platform. Among them, 1) atomized e-cigarettes: they have deployed fields such as tobacco oil (Yunshuo Technology) - OEM (Jinjia Technology) - Brand (Foogo) - Channel (Yunpu, Indonesia); 2) HNB: Achieve the whole industry chain layout of flavors and fragrances (Changyi Technology) - tobacco products (Jiayu Technology) - Tobacco (Jiayu Technology) - Tobacco bombs (Jiaju Electronics) - Channel (Hengtian Commercial). The comprehensive layout of the novel tobacco will provide sufficient impetus for the company's long-term development.
Investment advice: With the resumption of the main tobacco labeling business and the accelerated deployment of the new tobacco business, Jinjia Co., Ltd.'s revenue for 2021-2023 is expected to be 50.9, 63.0, and 7.62 billion yuan respectively, up 21.3%, 23.8%, and 21.1%; Guimu's net profit is 10.1, 12.3, and 1.50 billion yuan respectively, up 22.1%, 22.6%, 21.7%. Corresponding PE is 25x, 20x and 17x, maintaining the “buy” rating.
Risk factors: increased competition in the industry; uncertainty about the promotion of new domestic tobacco policies; large fluctuations in raw material prices, etc.