Chiyou shares (603429): 18 years of rapid revenue growth, 19 years of cigarette label volume expected

Chiyou shares (603429): 18 years of rapid revenue growth, 19 years of cigarette label volume expected
Event: The company released its annual report and achieved revenue in 20184.580,000 yuan, an increase of 96 in ten years.00%; net profit attributable to mother 1.15 ppm, an increase of 16 in ten years.39%; deduct non-net profit 1.08 million yuan, an increase of 59 in ten years.92%.In addition, the company plans to pay 3 yuan for every 10 shares and pay 2 yuan. Baptism paper business grows steadily In 2018, the company’s pickup paper business achieved revenue2.96 ppm, an increase of 29 in ten years.69%, gross margin 54.70%.The company is a leader in the field of cigarette tipping paper. The downstream customers are of high quality and stable cooperation, which has gradually laid a good foundation for sustainable development in the future.According to the number of reports, the company’s tobacco tipping paper business has developed steadily, and sales revenue has increased year by year.While maintaining the steady growth of the tobacco tipping paper business, the company has stepped up design innovation and research and development, actively explored new products and new markets, and achieved a twofold increase in the production and sales of cigarette tipping paper.During the same period, they increased by 2.44% and 15.26%. The layout of the cigarette label business continued to deepen, contributing new revenue increase. The company gradually laid out the cigarette label business on the basis of the stable development of the tobacco tipping paper business.The sales revenue of 成都桑拿网 cigarette labels in 2018 was 1.5.7 billion, accounting for 34% of operating income.29%, has become another important source of revenue for the company following the tobacco tipping paper business.Since June 2017, the company changed its ability to raise projects to build cigarette labels and began to enter the cigarette label industry; In February 2018, it acquired Dafeng Technology to integrate its customers and has won the bids for cigarette products from Anhui Tobacco, Yunnan Tobacco, and Shaanxi Tobacco.In order to further expand the tobacco label business, the company expanded its tobacco label production capacity through a fixed increase. It is expected that all projects will be put into production by the end of 2020, when the company’s total tobacco label capacity will reach 2.45 million boxes. Looking ahead, the 淡水桑拿网 development of new-type tobacco is ahead of the development of new-type tobacco in the world. The current global market for heated non-combustible products reaches 5 billion US dollars (up 138%), and is expected to reach 15 billion US dollars in 2021, which will account for the volume of all new tobacco products45%.Domestic policies actively promote the development of new tobacco products. Yunnan, Sichuan, Guangdong and Hubei China Tobacco currently sells non-burning tobacco products overseas.In October 17th, the company and Anhui Tobacco Cross-Border Cooperation Agreement, the two parties will establish a joint engineering center to promote the development of related industries such as new tobacco products and supporting materials for cigarettes; in November 18th, it established the company’s reputation with the electronics company Kunming Xuguang.Development of new tobacco design services.We believe that the company leverages Anhui Tobacco’s new tobacco research capabilities and tobacco sales qualifications, strives to quickly develop new tobacco advances and cuts into the new tobacco industry chain, prioritizing to become a qualified supplier and gaining the “first-mover” advantage. Profit forecast and investment recommendations The company’s 19-year tobacco label will enter a period of rapid volume reduction. Traditional tobacco tipping paper will reduce costs and improve efficiency steadily, leading the new tobacco layout.We estimate the company’s net profit attributable to its parent to be 1 in 19/20.96/2.66 ppm (decreased gross margin of cigarette label business, affecting comprehensive gross margin, from the previous value of 2).25/3.(26 trillion down), an increase of 69 in ten years.65% / 36.08%, maintain “overweight” rating. Risk reminder: New business development is less than expected, new tobacco policy is less than expected, integration acquisition target is less than expected, fundraising investment project construction is less than expected