Chenguang Stationery (603899) 2018 Annual Financial Results Review: Steady Long-Term Performance and Rapid Growth of Emerging Businesses

Chenguang Stationery (603899) 2018 Annual Financial Results Review: Steady Long-Term Performance and Rapid Growth of Emerging Businesses

Investment highlights: Event: 3/26 The company released its 2018 annual report, which reported a real revenue of 85.

35 ppm, an increase of 34 in ten years.

26%; net profit attributable to mother 8.

07 million yuan, an increase of 27 in ten years.


Among them, Q4 achieved revenue of 24.

USD 1.1 billion, an annual growth of 29.

36%, net profit attributable to mother 1.

82 ppm, an increase of 29 in ten years.


Traditional businesses have grown steadily, and emerging businesses have continued to develop.

In 2018, the company focused on “adjusting the structure and stabilizing growth” as its annual focus, focusing on and deepening the terminal.

(1) Rebuilding the moat from traditional businesses.

The 18-year revenue has increased by 16% every year. The four products of mass products, boutique cultural and creative products, office products, and children’s art products have been fully promoted.

The company has expanded retail terminals7.

With more than 60,000 stores, the distribution system and store channels have formed a solid moat.

In terms of products, writing instruments maintained steady growth and achieved revenue19.

4.6 billion (8.

82% yoy); student stationery achieved revenue of 18.

5.8 billion (13.

(YoY growth of 79%); revenue from office stationery reached 46.

1.3 billion (62.


(2) High growth in emerging businesses.

Klip will benefit from customer expansion and achieve revenue.

8.6 billion (106.

03% yoy), accounting for 30% of the company’s revenue.

3%, net profit increased from 11.14 million yuan to 32.14 million yuan, and profitability continued to increase; Chenguang Life Museum achieved revenue3.

0.6 billion (49.

15% yoy), the number of retail stores reached 255, of which Jiumu Zamusha opened in Q3 of 18, joined the expansion, accelerated expansion, and gradually reduced losses. It is expected that 2019 will be an important turning point in profit; Chenguang technology business has developed steadilyThe camp is constantly enriching, with more than 1,000 online authorized stores, further increasing the online penetration rate.

The overall profit remained stable, and the gross profit margin of the product rose steadily.

Comprehensive gross profit margin and interest rate 0.

78pct to 25.

8%, mainly due to changes in income structure, low-margin office product business expansion.

Among them, writing instruments / student stationery / office stationery gross profit margins respectively changed +0.

48pct / 1.

89 points / 0.
09pct to 34.
8% / 33.

50% / 18.


On the expense side, due to the impact of Colibri, Jiumu channel construction, rising logistics costs and publicity input, the sales expense ratio rose by 0.

28 points to 9.

25%; staff management is reasonable, and management costs fall by 0%.

24pct to 5.


Net interest rate fluctuated in 2018.

52 points to 9.

5%, the net profit level of the company is expected to be stable and upward through the release of the profitability of the Copley and cultural and creative businesses.

The acquisition of Shanghai Anshuo helped the category and channel expansion.

Company with 1.

93.2 billion acquisition of 56% stake in Ashuo Culture and Education.

Anshuo Culture and Education realized income from January to September 20183.

9 trillion, net 重庆耍耍网 profit-6136 million, due to the replacement of export orders, but the relationship with major customers still maintained.

MARCO, a well-known brand in Shanghai, has high visibility and continuous R & D capabilities in the field of wood pencils. Its product channels are available in 80 countries around the world.

The acquisition complies with the company’s “strong product” strategy, helping to further improve the product matrix.

At the same time, Shanghai Anshuo’s export channels and experience can greatly promote the company’s export business development.

The company’s overseas channels will be expanded in depth, and internal and external synergies can be expected.

Profit forecast and investment rating: As a leader in stationery, the company’s traditional business + emerging business constitutes a dual momentum of 苏州桑拿网 performance.

The advantages of traditional business channels are obvious. Under product upgrades and store expansions, it constitutes a safe pad for stable performance growth. Emerging businesses have gradually entered a period of high-speed development. Colip has benefited from the expansion of government customers across the country and the rapid deployment of cultural and creative services.Profitability is constantly improving; the acquisition of Shanghai Anshuo, “strong product” + synergy between overseas and domestic channels can be expected.

It is expected that the company’s operating income in 2019-2021 will be 105.

5.7 billion, 130.

5 billion, 164.

3.7 billion; net profit was 9.

8.2 billion, 12.

1.1 billion, 14.

88 ppm; EPS is 1.

07 yuan, 1.

32 yuan, 1.

62 yuan, the corresponding PE is 34.

66x, 28.

1x and 22.


First coverage, giving the company a “strong recommendation” rating.

Risk warning: product upgrades are not as good as market changes; if the company cannot maintain the scale of the development industry, it may face fiscal and tax risks