Yuanlong Yatu (002878): Annual Report Meets Expected Growth of Main Business

Yuanlong Yatu (002878): Annual Report Meets Expected Growth of Main Business

The annual report is in line with expectations, and the main industry has a good growth momentum. On April 19, the company released its annual report, which achieved revenue of 10 in 2018.

5.2 billion, a year-on-year increase of +28.

36%; net profit attributable to mothers reached 93.54 million yuan, a year-on-year increase of 30.

92%, slightly higher than the performance of the express report (the net profit attributed to the mother of the express report was 90.65 million yuan).

The company plans to pay a cash dividend of 3 yuan (including tax) for every 10 shares.

We believe that the company has abundant reserves of high-quality customers, has many business expansion directions, and has broken through the growth space. In the future, it can further exert its scale effect and consolidate and enhance its leading advantages.

The company’s EPS for 2019-21 is expected to be 1.



14 yuan.

Maintain the “overweight” rating.

The main business of gifts and gifts has grown steadily, and Qianma Network has overfulfilled its performance commitments to achieve revenue of 10 in 2018.

34 trillion, other business revenue 1804 million (mainly precious metals and licensed products income and property rental).

In the marketing business, the gift and gift business realized revenue 8.

3.3 billion, a year-on-year increase of +18.

84%, gross profit margin 23.

21%; revenue from promotional services business1.

4 billion, a 杭州桑拿网 year-on-year increase of +25.

59%, gross margin 26.


Qianma Network achieved revenue 1.

8.3 billion, a year-on-year increase of +51.

54%; net profit after deduction of 34.99 million yuan, exceeding performance commitment9.


Qianma Network’s consolidated revenue was 60.67 million yuan.

Revenue growth in the fourth quarter was fast, and profitability continued to increase. The company’s single quarter revenues for Q1, Q2, Q3 and Q4 2018 were 2 respectively.

03 billion, 2.

4.1 billion, 2.

3.5 billion, 3.

730,000 yuan, net profit attributable to mothers were 19.95 million yuan, 28.88 million yuan, 18.75 million yuan and 26.01 million yuan.

Fourth quarter revenue and return to net profit growth rates were 52.

30% and 30.

34%, less profit growth than income growth was mainly affected by amortization of equity incentive expenses and rental costs.

In 2018, the company’s comprehensive gross profit margin was 24.

34%, a year-on-year increase of +0.

44 points; net margin is 9.

36%, a year-on-year increase of +0.

49 points; period expenses 14.00%, a year-on-year increase of +0.

67 points.

With the increase of expenses, the company still continued the trend of steadily increasing profitability in the past few years.

The growth of old customers and the development of new customers go hand in hand. The annual report extended to digital marketing and new media shows that the company’s core customer orders and shares have doubled in 2018, which has widened the gap with the continuous increase.

Successfully opening up multiple new customers in the FMCG and financial industries is the company’s largest new customer entry year in history.

The digital marketing business digs deep into core customers and provides customers with a variety of customized services based on Internet technologies and big data.

The acquisition of a 60% stake in Qianma Networks in 2018 complemented the company’s new media marketing business segment and is expected to form a synergy with the company’s existing business.

The fast-growing domestic gift and gift leader maintains the “overweight” rating. The company’s 19-20 year net profit was estimated to be 1.


89 trillion, taking into account the World Garden Fair, the Olympic Games factors raised the franchise souvenir revenue forecast, the net profit attributable to mothers in 2019-21 is expected to be 1.



7.9 billion, with an EPS of 1.



14 yuan.

Yuanlong Arto does not have comparable companies with similar business in A shares. Some of the advertising companies we have selected in the same marketing segment have an average PE of 15 in 2020.

99 times.

Taking into account the high growth of Yuanlong Yatu and the scale of the industry leader, we believe that it can be given 22-24 times PE in 2020, corresponding to a reasonable and feasible34.


16 yuan.

Maintain the “overweight” rating.

Risk warning: the risk of reliance on major customers and the failure to renew the framework agreement of major customers; the risk of changes in the marketing methods of major customers; the risk of receivables recovery; the risk of risk concessions and changes in tax rates;