Jinjia Co., Ltd. (002191): Leader in the cigarette label industry, with new tobacco development highlights
Core Views Leading companies in the tobacco label industry, color boxes, and new tobacco development are interesting.
The company was incorporated in Shenzhen in 1996 and listed on the Shenzhen Stock Exchange in 2007. Its current business position is in the research, production, and sales of high-end packaging prints and packaging materials. Its main products include cigarette labels, color boxes, and laser packaging materials. It is a leader in the tobacco label industry.At the same time, the company is actively exploring the field of new tobacco products, and a new point of performance growth is formed in the later stage.
In 2018, the company benefited from the continuous improvement of the tobacco market, the development of color box products market, and the company’s operating income 33.
74 trillion, +14 ten years ago.
56%; due to the slightly lower gross profit margin of the color box business, which lowered the company’s overall gross profit margin, the company transferred three fee controls, increasing investment income and realizing net profit attributable to mothers7.
25 trillion, +26 a year.
In terms of revenue structure, the proportion of each business is: Cigarette Mark 76.
1%, laser packaging material 18.
0%, color box 13.
2%, internal interference -20.
0% and other about 12.
7%; due to the higher gross profit margin of the cigarette label business, the gross profit contribution accounted for nearly 80%, which is the main source of performance elasticity.
In historical performance, the company’s revenue and its compound net profit attributable to mothers during the period from 2014 to 2018 were 9.
8%, average growth performance, and income statement due to non-operating income and expenditure, tax disturbance, performance is weaker than the income side.
In our opinion, the company’s current focus lies in: 1) the recovery of the industry and the optimization of the structure of the tobacco label business, which will continue to grow steadily in the next few years, making the company’s performance a good tone; 2) the business of color boxes and packaging materials is expanding rapidly, And gradually contribute to the performance flexibility; 3) the new tobacco business is still in the strategic layout period, or into a long-term profit growth point.
Tobacco label business: The short-term benefit of the cigarette industry is picking up, and the optimization of the industry structure in the medium term also has some highlights.
The tobacco label business is highly related to the cigarette industry. The short-term benefits of the tobacco market have improved. In the medium term, the company gradually changed the industry consolidation opportunity to increase market share: 1) After destocking in 2016, the industry’s production and sales and revenue growth gradually picked up. The tobacco market in 2018Significant improvement, according to the data of the State Tobacco Monopoly Administration, a total of 11,556 tax advantages and disadvantages.
20,000 yuan, an annual increase of 3.
69%; The company seized the industry’s stability and improved, the cigarette brand structural upgrade, optimized the company’s product structure, expanded new markets and new products, and achieved a growth in cigarette label sales in 20187.
97%, revenue growth 8.
05%, performance industry; 2) Transformed into the national “level cigarette strategy” implemented by cigarette brands, and the standards of cigarette level include “continuous optimization of cigarette structure, continuous improvement of grades, stable price, stable sales growth”, etc.In several aspects, we believe that under the background of industry integration and optimization, the number of cigarette brands will continue to decrease and gradually gather to the mid-to-high end, which will help market leaders to accelerate business expansion and integration through mergers and acquisitions.
In the next few years, the company’s cigarette label business will still be the company’s core business and major performance contribution point, with a high probability of continuous industry average performance, and the growth rate is expected to remain at 5% -10%.
Color box and laser packaging materials business: rapid growth, and gradually contribute to the elasticity of performance.
1) Color box business: Revenue from color box business in 20184.
460,000 yuan, an increase of 67 in ten years.
09%, meanwhile, the business development is gratifying, which is to increase the customer base in the later period.
The company’s scale has been continuously improved by strengthening its post-press manufacturing capabilities, improving the performance of automated equipment, and increasing production capacity and sales; through reorganization, the company has maintained “China (Jinzhongzhi)”, “Nanjing (nine-five years honor)”, and “Yunyan” (largeNine)), “Moutai alcohol”, “Yanghe” and other well-known tobacco and alcohol brand color box packaging market share, while continuing to grow the market, product development efforts, continue to add new customers to expand new products, has obtained British American Tobacco, Renault Tobacco, Philip Morris International, Yue Ke and other well-known brands of new tobacco products qualified supplier qualification; well-known liquor brands such as “Jinjiu”, “Red Star Erguotou”, “Jiang Xiaobai” outer packaging, etc., for the subsequent continuous high-growth growth customersBasics; 2) Laser packaging materials: the short-term growth rate has improved, and the promotion of investment projects has some highlights.
In 2018, the company’s laser packaging materials achieved revenue6.
08 million yuan, an increase of 4 in ten years.
62%, which is equivalent to the improvement in the growth rate in 2017; we believe that with the completion of the 2019 fund-raising project “China Toyota Optoelectronics Technology Reconstruction and Expansion” and in conjunction with the company’s recent active expansion of extended customers, the business can return to medium-speed growth and can be expected.
New tobacco: It is still in the strategic layout period, or it may become a point of long-term profit growth.
The development of the new tobacco industry that the company pays close attention to has already been carried out through the parent company and part-time subsidiaries in the early strategic layout, or has become a point of long-term profit growth: 1) Jinjia Technology, a subsidiary, actively promotes its products to tobacco companies.Has cooperated with China Tobacco companies in Yunnan, Shanghai, Henan, Shandong, Guangxi, Chongqing; 2) Shenzhen Jinjia Health, a wholly-owned subsidiary, and Shenzhen Qianhai Fosun Ruizhe Asset Management Co., Ltd., a subsidiary of Fosun Group, have established joint venturesPromote investment and mergers and acquisitions of high-quality targets in the field of new tobacco and health technology; 3) The company establishes a joint venture with Beijing Miwu Technology and Shenzhen Nanqiao Qianhai Innovation Fund Partnership to make use of the advantages of various parties in technology and capital to promoteThe development of new tobacco products; 4) The company and Yunnan Tobacco Industry signed a strategic cooperation framework agreement to jointly promote the research and production and sales of new products in the field of new tobacco products. Jinjia Technology and its subsidiary Shenzhen Huayu Technology Development jointly invested to establish a joint venture companyTo achieve the implementation of strategic cooperation.
Earnings forecast and rating: The company’s EPS for 2019-2021 is expected to be 0.
58 yuan, 0.
65 yuan and 0.
72 yuan, currently corresponding to 2019-2021 price-earnings ratios of 20 respectively.
2 times, 17.
9 times and 16.
1x coverage for the first time, giving the company a “cautious recommendation” rating.
Risk reminders: The boom of the cigarette industry is shifting; the advancement of new tobacco strategies is blocked.