Qixin Group (002301): hardware + software + service large office business grows rapidly

Qixin Group (002301): hardware + software + service large office business grows rapidly
Report Summary: Policy-driven, blue ocean market for office supplies.The 2015 Regulations of the People’s Republic of China on the Implementation of the Government Procurement Law clearly required the implementation of unified standards for the construction of electronic procurement platforms for government procurement. Subsequently, the State Council successively issued a number of regulations requiring the government and central enterprises to shift from the traditional decentralized procurement model to the centralized procurement model.At present, all large provinces, cities, and municipal governments, insurance agencies, military enterprises, and other large enterprises and institutions have publicly tendered office supplies for the procurement of office materials, and the policy has nurtured the blue ocean market for office supplies.The annual office supplies market size in 2018 was approximately 1.900 million, the market size is expected to reach 2 by 2020.2 trillion.Leading companies have laid out the office supplies market in recent years. The company has deeply cultivated the office stationery industry for more than 20 years, and has accumulated rich customer resources. It is expected to benefit from the rapid growth of the industry and achieve rapid growth.  B2B + cloud video business has strong core competitiveness and provides a “hardware + software + service” product system.In 2018, the company’s office collections achieved a total revenue of about 2.8 billion, and its core competitiveness in B2B business is strong, and it continues to develop large customers.The company currently has 30 storage and logistics centers, covering a total area of 100,000 square meters, with 100+ transport vehicles, and strong service delivery capabilities. In addition, the company has upgraded through 26 subsidiaries, 3 offices and 200+ offline service providersBusiness capabilities have achieved full coverage of delivery services in 31 provinces and cities nationwide.In 2016, the company acquired Yinpeng Cloud Computing, a leader in the cloud video industry, and entered the SaaS enterprise service field.The company will continue to pay attention to the development and upgrade of the cloud video conference platform, continuously expand the application scenarios, and strengthen the development of intelligent hardware, improve product supporting capabilities, and better meet the diverse needs of different customers and different scenarios.The company provides customers with a one-stop “hardware + software + service” product system, which improves customer stickiness and enhances the company’s profitability.  Efficiency is improved, and net profit margin is expected to continue to increase.From 2016 to the present, the company’s large office business after deduction of non-net profit margin from 2016 -0.25% steadily increased to 1 in 2018.15%, the company ‘s sales of its own products will increase in the future, and its efficiency will be further improved. The company ‘s large office business profit margin is expected to continue to increase.  Earnings forecast and estimation: The company’s EPS is expected to be 0 in 19-21.47, 0.63, 0.83 yuan, corresponding PE is 25X, 18X, 14X.Risk warning of maintaining “Buy” rating: Large-office business 重庆耍耍网 development is less than expected, depending on Tongtong ‘s revenue being less than expected