2024Q1's performance was in line with expectations. Major retail stores and online channels grew at an impressive rate. In 2024Q1, the “buy” rating company achieved operating income of 5.49 billion yuan (+12.4%, same below), net profit to mother of 380 million yuan (+13.9%), and deducted non-net profit of 330 million yuan (+11.1%). The company's 2024Q1 revenue performance maintained steady growth. Among them, major retail stores & online channels maintained a high growth rate. We maintain our 2024-2026 profit forecast. The net profit for 2024-2026 is 18.34/21.15/2,434 billion yuan, the corresponding EPS is 1.98/2.28/2.63 yuan, and the PE corresponding to the current stock price is 17.8/15.4/13.4 times. We continue to be optimistic about the steady development of the company's strategy in the next five years. The traditional main business continues to grow, profitability continues to improve, and maintain the “buy” rating .
Profitability: The gross profit margin remained stable. The 2024Q1 gross profit margin was 20.2% (+0.5pct) for the period, the gross profit ratio for the period was 12.0% (+0.2pct), and the sales/management/R&D/finance expense ratios were 7.4%/3.9%/0.9%/-0.3%, respectively, +0.4/0.0/-0.1/-0.1pct, respectively. The net sales margin for 2024Q1 was 7.4% (-0.1pct). 2024Q1's operating cash flow was 68 million yuan (-49.7%). The decline was mainly due to the increase in payment payments made by the company to upstream suppliers during the reporting period. We are optimistic that 2024 will increase the share of high-margin channels such as the company's retail stores and online channels, which will drive the company's gross margin to continue to improve, and net interest rates will continue to improve under cost control and cost reduction and efficiency.
Revenue split: Major retail stores and online channels are growing rapidly. The direct office supply business is under short-term pressure. Looking at the breakdown by product, 2024Q1's writing tools/student stationery/office supplies/direct office sales business earned 5.6/8.5/9.0/2.95 billion yuan respectively. +15.7%/+17.1%/+6.4%/+11.6%, respectively. According to the business model, we expect the company's traditional core business to maintain a steady growth trend in 2024Q1. Among them, Chenguang Technology (online channel) revenue is 250 million yuan (+32.7%), and we are optimistic about stabilizing traditional channels such as Tmall and Jingdong under the company's differentiation strategy and developing emerging channels such as Douyin; 2024Q1's direct office sales business (Colipu) revenue of 2.95 billion yuan (+11.6%), and the short-term growth rate is under pressure. We expect the revenue growth rate to gradually rise as the economic environment recovers; 2024Q1's retail business revenue is 3.7 billion yuan (+11.6%) 100 million yuan (+23.5%), of which Jiumu Grocery Club's revenue was 350 million yuan (+25.1%). As of March 31, 2024, the number of the company's Jiumu Grocery Store stores reached 639, an increase of 21 over the end of 2023. We are optimistic that the major retail business will maintain a high growth rate in 2024 as store expansion accelerates and store efficiency recovers.
Risk warning: New business development falls short of expectations, new product promotion falls short of expectations, industry competition intensifies