Qixin Group (002301): B2B business promotes high revenue growth and is optimistic about the company’s long-term development
Event: The company disclosed the third quarter of 2019: the company achieved revenue of 43 in the first three quarters of 2019.50 ppm, an increase of 58 in ten years.01%; net profit attributable to mother 1.830,000 yuan, an increase of 30 in ten years.99%; net profit after deduction to mother 1.610,000 yuan, an increase of 44 in ten years.73%.Among them, the single third quarter achieved revenue of 16.USD 8.6 billion, an annual increase of 58.13%; net profit attributable to mother 4284.960,000 yuan, an increase of 48 in ten years.56%; net profit after deduction is 37.83 million yuan, an annual increase of 28.59%.  Opinion: B2B business promotes high revenue growth, and the smooth implementation of growth is optimistic about long-term development.Driven by policies, the office direct sales industry continued to explode.The company has been cultivating office stationery for many years, fully enjoying the development bonus of the industry, and has the ability to win consecutive bids.In addition to the traditional stationery, equipment, and consumables, the company has vigorously developed MRO industrial products this year, strengthened its integrated service capabilities, and stood out from the competition, driving B2B business revenue to increase rapidly this year.On October 21, 2019, the company’s fixed increase was implemented smoothly and it is planned to add 1.8 billion funds for “cloud video conference platform upgrade and business line expansion project”; 2.600 million yuan of funds for “smart office equipment development and industrialization projects”; 3.1 billion yuan was used for “Group Digital Operation Platform Construction Project”.Three major investment projects have helped B2B & Cloud Video’s two main businesses, which will be 1. Enhance the informationization of B2B business, open up front-end products and segment management; 2. Enhance various aspects of business support for cloud platforms and expand applications as the 5G era is approaching; 3. The two major businesses help each other to create an 西安耍耍网 integrated and integrated office service platform of “hardware + software + services” for the company.The company’s B2B business and cloud video averages are in a leading position in its field. The smooth implementation of the fixed increase will enhance the company’s business capabilities, further enhance its comprehensive competitiveness, and it is expected to continue to grow in the future.  The change in income structure affects gross profit margin, and the scale effect gradually reduces the expense ratio.The company’s gross profit margin for the first three quarters was 14.60%, ten-year average 3.57 points.The company’s B2B business gross margin (19H1: 12.53%) is lower than SaaS business (19H1: 65).09%), we expect the company’s B2B business revenue growth in the first three quarters will be significantly faster than the SaaS business, changes in revenue structure dragged down the overall gross profit margin.  In terms of expenses, the company’s expenses during the first three quarters9.74%, a decrease of 3 per year.38pct, in which the sales / management / financial expense ratio is 6.02% / 3.76% /-0.03%, short-term changes of -1.53 / -1.24 / -0.60 points.As the company’s B2B business revenue grows, the scale effect is gradually significant, and the sales and management expense ratio declines.Affected by the devaluation of the RMB, the company recorded a foreign exchange gain of 64.400,000 yuan, far more than the same period last year, so the financial expense ratio fell.  Overall, the company’s net profit in the first three quarters reset4.23%, zero for one year.92 points.  Earnings forecast and estimation: Affected by the decline of the company’s gross profit margin, the company’s profit forecast is lowered, and it is expected that the EPS for 19-21 will be 0.35, 0.44, 0.61 yuan, corresponding PE is 34X, 27X, 20X.Maintain “Buy” rating.  Risk reminder: customer development is not smooth, office supplies market is sluggish