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"Investor's Network" Ye Xin
In China, there is a "cigarette label" behind every pack of cigarettes, and the main manufacturer of the "cigarette label" - Shenzhen Jinjia Group Co., Ltd. (hereinafter referred to as "Jinjia shares", 002191. Since its establishment, SZ) has experienced a golden period of industry development and a difficult period of industry change, and is ushering in a painful moment on the road of enterprise development.
On April 20, during the special period when Chairman Qiao Luyu was unable to perform his duties, Shenzhen Jinjia Group Co., Ltd. (hereinafter referred to as "Jinjia Shares", 002191. SZ) 2023 annual report is on schedule. According to the annual report, in 2023, the company will achieve operating income of 3.945 billion yuan, a year-on-year decrease of 23.96%, a net profit attributable to the owners of the parent company of 118 million yuan, a year-on-year decrease of 40.03%, and basic earnings per share of 0.08 yuan, a year-on-year decrease of 42.86%. This series of financial indicators all reflect the decline in the company's operating conditions.
At the same time, the chairman of Jinjia shares, Qiao Luyu, was investigated and detained three times in just three years, which also had a certain impact on the company's reputation and operation, although the company did not disclose the specific reasons why Qiao Luyu was repeatedly detained, the company said that the board of directors is operating normally, but the company's operating performance is still facing a lot of pressure and challenges.
The company's performance continued to decline
According to public information, Jinjia's main products are high-tech and high-value-added cigarette labels, color box packaging of high-end well-known consumer brands, new packaging materials such as laser paper/film, cigarette film, and new tobacco products. The company's customers mainly include China Tobacco Company, mid-to-high-end liquor brands, e-cigarette brands, consumer electronics brands, pharmaceutical brands, makeup brands, etc.
Since its listing on the A-share Shenzhen Stock Exchange in December 2007 to 2020, the performance of Jinjia shares has been relatively stable, and only in 2010 and 2016 there was a decline in net profit attributable to the parent company. After that, in addition to the performance increase in 2021, the net profit attributable to the parent company in 2020, 2022, and 2023 will decline, with a year-on-year decline of 6.07%, 80.65%, and 40.03% respectively. In terms of revenue, operating income in 2023 will decrease by 23.96% year-on-year, which is also the first decline in 9 years since 2014.
In 2023, the performance of various data indicators of Jinjia shares will not be satisfactory. Among them, the gross profit margin of Jinjia shares was 25.95%, a year-on-year decrease of 6.51%, the net profit margin was 3.66%, a year-on-year decrease of 18.06%, sales expenses, management expenses, and financial expenses totaled 398 million yuan, and the three fees accounted for 10.08% of revenue, an increase of 16.43% year-on-year. In terms of R&D investment, R&D expenses decreased by 20.02% year-on-year.
From the perspective of peers, in 2023, Chiyu's net profit attributable to the parent company will be 117 million yuan, which is almost the same as Jinjia's 118 million yuan in the same period, but the former's operating income is 654 million yuan, while the latter's operating income is 3.945 billion yuan, which is a large gap. At the same time, the gross profit margin of 25.95% of Jinjia shares is also lower than the gross profit margin of 40.19% of Chiyu shares in the same period, and even lower than the average gross profit margin of the industry of 30.06%.
Although the profit amount of Chiyu shares and Jinjia shares is comparable, the amount of dividends is not as good as that of Jinjia shares. According to the 2023 annual equity distribution plan, Chiyu shares plan to distribute 1.5 yuan for every 10 shares, with a total cash dividend of 76.8923 million yuan. Jinjia shares distributed a cash dividend of 3 yuan (tax included) for every 10 shares, and a cash dividend of 424 million yuan, which basically carved up the net profit attributable to the parent company that year. In fact, coincidentally, when the net profit attributable to the parent company in 2022 is only 197 million yuan, the annual dividend amount will reach 570 million yuan.
Since 2018, affected by factors such as the "merger of China Tobacco" and the "new national standard of the tobacco industry", the tobacco industry as a whole has been in a period of adjustment. In this context, under the pressure of the growth of Jinjia's traditional cigarette label business, the company actively promotes the development of new business, expands the color box business, packaging new materials, and new tobacco products.
In terms of products, in 2023, in the main business of Jinjia Co., Ltd., the revenue of cigarette labels will be 1.480 billion yuan, a year-on-year decrease of 24.08%, accounting for 37.51% of the operating income, the revenue of color boxes will be 1.014 billion yuan, a year-on-year decrease of 12.71%, accounting for 25.69% of the operating income, the revenue of laser materials and cigarette films will be 890 million yuan, a year-on-year decrease of 4.43%, accounting for 22.57% of the operating income, and the operating income of new tobacco products will be 432 million yuan, a year-on-year decrease of 22.05%.
It is not difficult to see that in 2023, the core business of Jinjia Co., Ltd. will decline across the board, mainly due to the pressure on the growth of various businesses due to the weak demand for downstream cigarettes, liquor, consumer electronics, etc.
However, institutions continue to be optimistic about the development prospects of Jinjia shares, and CICC expects that with the gradual recovery of downstream demand and the introduction of the company's new tobacco customers, the company's color box business is expected to return to rapid growth in the future. In addition, the company's new tobacco business is progressing smoothly, and the business layout has gradually extended to the whole industrial chain links such as equipment, raw materials, products, brands, and channels, and has accumulated many well-known tobacco customers at home and abroad.
The chairman of the board of directors was filed three times
Jinjia has been deeply involved in the packaging industry for nearly 30 years, from a traditional tobacco packaging manufacturer, to one of the most influential listed companies in the industry, and the development of Jinjia is inseparable from the "evolution" of the founder.
According to public information, Jinjia shares were founded by the founder Qiao Luyu, according to his resume information, Qiao Luyu, male, born in 1956, Chinese nationality, long-term residence in Australia, high school education. From 2003 to 2006, he served as the chairman of Jinjia Co., Ltd., and from 2006 to 2010, he served as the chairman and general manager of the company.
Behind Qiao Luyu is a story full of controversy and challenges. Qiao Luyu was an ordinary workshop worker in Shandong Heze Cigarette Factory in his early years, until the 90s of the last century, Qiao Luyu left his post to go to Shenzhen for development, and founded Jinjia shares, and gradually made it bigger and stronger.
After more than ten years of development, Qiao Luyu has promoted the development of Jinjia shares, and his personal worth has also been very high. According to the "2022 Hurun Global Rich List", Qiao Luzhi's wealth of 8.5 billion yuan ranked 2677th. Jinjia's 2023 financial report shows that Chairman Qiao Luyu has a salary of 1.938 million yuan.
However, Qiao Luyu has been placed on file for investigation three times in the past three years and has been placed in detention. On the morning of April 15, Jinjia Co., Ltd. suddenly issued an announcement saying that Qiao Luyu, the company's actual controller and chairman, had been placed on file for investigation. Immediately afterwards, the stock market opened, and Jinjia shares were sealed on the fall limit.
In fact, it is not new for Qiao Luyu to be placed on file for investigation. As early as April 2022 and June 2023, he has been investigated twice in a row and placed in detention. However, the strange thing is that the general manager Hou Xudong signed the notice issued by the Shangyou County Supervision Commission on April 1, 2022, but did not report to the company's board of directors in a timely manner, and the reason given was: because Mr. Qiao Luyu did not participate in the specific operation and management of the company, Hou Xudong personally judged that Mr. Qiao Luyu's investigation had nothing to do with the company and did not affect the normal performance of the chairman's duties. Shortly thereafter, the China Securities Regulatory Commission (CSRC) issued a warning letter to Jinjia and Hou Xudong for failing to report to the board of directors in a timely manner, resulting in the delay in the disclosure of retention matters by Jinjia shares.
Regarding Qiao Luyu's investigation this year, the industry speculates that this may be related to the anti-corruption storm in the tobacco system in recent years. For example, in January this year, Zhu Linyao, the actual controller of Huabao Co., Ltd., a listed company in the cigarette industry chain, and his son were placed on file for investigation, and Zhou Tao, deputy secretary of the party group and general manager of Yunnan China Tobacco Industry Co., Ltd., was suspected of serious violations of discipline and law and voluntarily surrendered.
"During the special period when Mr. Qiao Luyu, the chairman of the board of directors, is unable to perform his duties, I deeply feel the worries and confusion of all shareholders." Hou Xudong, general manager of Jinjia shares, said in the annual report "A Letter to Shareholders": "The performance did not meet expectations, not overnight, but due to the interweaving of multiple factors. The wheels of the times are rolling forward, the packaging industry and the new tobacco industry are still vibrant, but the market is unpredictable, full of challenges and opportunities. ”
Where is the cigarette label faucet going?
At present, with the intensification of global tobacco control efforts and the continuous decline of smoking rates, the traditional business model of the tobacco industry is facing unprecedented pressure. The pain of industry development is also the driving force for transformation and upgrading, and Jinjia is actively transforming the series of new energy layout.
Carbon neutrality and carbon peak have become a global consensus, and Jinjia Co., Ltd. focuses on new energy and new channels, and vigorously invests in related fields. According to the company's disclosure, according to the data on the website of the National Bureau of Statistics, as of December 2023, the output of new energy vehicles has increased by 30.3%, and the company's composite current collector products are currently mainly used in lithium-ion batteries, which have broad development prospects.
Jinjia Co., Ltd. not only pays attention to the development of the new energy vehicle market, but also is committed to seizing the opportunity of the rapid development of new energy vehicles, consumer electronics and other markets at home and abroad, and constantly expanding its business scope. The company's "one-step" composite copper foil construction project is expected to be put into production by the end of 2024, which will further expand the company's business territory in the electronic materials industry.
In 2023, Jinjia Co., Ltd. will also invest more than 100 million yuan in the development of new materials and new energy technologies through the establishment of a wholly-owned subsidiary, Shenzhen Jinjia Xinyuan Technology Group Co., Ltd. In addition, the company also plans to invest 100 million yuan to set up a wholly-owned subsidiary, Shenzhen Jinjia Juneng Technology Co., Ltd., which also focuses on the development of new materials and new energy technologies. Through the attention and investment in the field of new energy, Jinjia shares demonstrate the company's determination to transform the new energy track.
In the face of transformation, Jinjia Co., Ltd. has entered the fields of new energy vehicles, power batteries, and new energy materials through continuous technological innovation, diversified investment and prediction of future development trends, actively promoted its transformation and layout in the field of new energy, and explored new growth points to cope with market changes.
In the secondary market, as of the close of trading on April 19, Jinjia's current price-to-earnings ratio (TTM) is about 52.37 times, the price-to-book ratio (LF) is about 0.9 times, the price-to-sales ratio (TTM) is about 1.57 times, and the total market value is 6.2 billion yuan. (Produced by Thinking Finance)■