Incident: The company released its 2024 quarterly report. 2024Q1 achieved revenue of 5.485 billion yuan, +12% year-on-year, net profit to mother of 380 million yuan, +14% year-on-year, and net profit of 328 million yuan after deducting non-return to mother net profit of 328 million yuan, +11% year-on-year.
By product, 2024Q1 writing tool revenue was 565 million yuan, YoY +16%, gross profit margin +3.3pct; student stationery revenue 854 million yuan, +17% YoY, gross profit margin 34.7%, YoY +1pct; office stationery revenue of 90,000,000 yuan, +6% YoY, gross profit margin 27.5%, YoY -0.7pct; revenue from other products was 209 million yuan, +24% YoY, gross profit margin of 45.9%, 1.4pct yoy; 7.2%, which is basically the same as the previous year.
The traditional core business is growing steadily, and the omni-channel layout is progressing steadily. Depending on our split, 2024Q1's traditional core business revenue may have achieved double-digit year-over-year growth. The company continues to promote product structure optimization, focus on key terminals, improve single-store quality and retail operation systems, and achieve omni-channel layout promotion. Using the refined operation of multiple stores+flagship stores, the company continues to promote new channel businesses such as Pinduoduo, Douyin, and Kuaishou, and carries out product line layout and product power exploration in online categories. 2024Q1 Chenguang Technology achieved revenue of 247 million yuan, +33% year-on-year.
Business forms are diversified, and major retail stores are booming. 2024Q1 Chenguang Living Center (including Jiumu) achieved revenue of 371 million yuan, +24% year over year, of which Jiumu achieved revenue of 348 million yuan, +25% year over year.
As of 24Q1, the company had a total of 678 major retail stores, including 639 in Kumu, 435 directly managed (a net increase of 18 from the end of 23), and 204 franchises (a net increase of 3 compared to the end of 23). In terms of direct office sales, the business scenario has expanded from one-stop office to MRO industrial products, employee benefits, and marketing gifts, digging deeper into the potential of original customers to increase the share, and steadily developing new customers, which is expected to achieve qualitative growth.
Expense control is effective, and profit levels remain steady. 2024Q1 gross profit margin 20.2%, +0.5pct year on year, net profit margin 6.9% to mother, +0.1pct year on year. The total cost rate during 2024Q1 was 12.0%, +0.2pct year-on-year.
Profit prediction and rating: As a leader in the stationery circuit, the company's traditional core business base is stable. Offline channels are being heavily cultivated using digital tools, and the profitability of major retail stores is expected to increase steadily. Colipu continues to expand its business boundaries. The net profit for 2024-2026 is estimated to be 1.81 billion yuan, 2.11 billion yuan, and 2.43 billion yuan, corresponding to PE of 18x, 15x, and 13x, maintaining the “recommended” rating.
Risk warning: Terminal consumption falls short of expectations, channel expansion falls short of expectations, industry competition intensifies, raw material prices fluctuate, etc.