Jinjia Co., Ltd. (002191) Brief Evaluation Report: Shenren Packaging Production Reconstruction and Expansion Project Retains Recommendations through Wine Labels

Jinjia Co., Ltd. (002191) Brief Evaluation Report: Shenren Packaging Production Reconstruction and Expansion Project Retains Recommendations through Wine Labels

Event On the evening of December 10, 2019, the company issued an announcement on the production restructuring and expansion projects and related transactions of the joint-stock subsidiary. The company transformed into a joint-stock subsidiary, Shenren Packaging, Renhuai City, Guizhou Province, for a production restructuring and expansion project. The total project investment was 6.

34 trillion, Jinjia shares invested no more than 2.

2.2 billion (accounting for 35.

00%), and the rest is funded by Guizhou Moutai Distillery Group Technology Development Company and Shanghai Rencai Printing Co., Ltd. 2 respectively.

85, 1.

2.7 billion (45%).

01%, 19.


The main content of the production reconstruction and expansion project is to upgrade the equipment capacity of the wine supporting industrial park in Tanchang Town, Renhuai City, Shenren Packaging, expand the plant space, and improve the construction of comprehensive facilities. The construction period is 3 years and will be implemented in two phases.The construction scale is to produce paper packaging products with an annual output of 15 units of liquor and 200,000 cases of cigarette labels.

Our analysis and judgment of the production and reconstruction project passed. In cooperation with Moutai and Jiu Biao, we participated in the production and expansion of Shenren Packaging, a subsidiary of Renhuai City, Guizhou Province. The scale of the project is to produce paper packaging products with an annual output of 15 and 200,000 boxes.Tobacco label, the proposed product plan is to provide 12.

5 batches required for initial liquor packaging, upscale wine box packaging, 2.

5 Personalized and customized gift box packaging products required for a certain kind of liquor packaging, 50 million sets (200,000 large cases) of cigarette label products.

According to company estimates, the project is expected to achieve annual operating income.

310,000 yuan, annual average net profit1.

610,000 yuan, the internal financial income of the project increased by 23.

51%, payback period is (after tax) 6.

41 years.

We expect that the project will effectively enhance Shenren Packaging’s ability to supply and serve liquor packaging products from Moutai Group and social liquor companies, which will help strengthen the scale of operations, increase market share and operating income; for the company, the project is in line with the company’s developmentStrategy to achieve the company’s expansion and extension of fine wine packaging, enhance the company’s comprehensive competitiveness in the large packaging sector, and help the company’s business in color box products continue to develop, forming the company’s second pillar, and promote the development of Moutai TechnologyThe company has in-depth strategic cooperation to effectively increase the company’s operating performance.

The optimization of the cigarette label is stable, the color box maintains a high growth, and the performance is good.
Since 2019, the company has been cultivating the large packaging industry around a three-year plan (2019-2021), and has performed well.

The main business of the cigarette label continued to be consolidated, the color box business developed rapidly, breakthroughs were made in the cultivation of emerging industries, and the company’s performance maintained a good growth. The company’s operating income in 2019Q1-3 was 28.

84 ppm, an increase of 21 in ten years.

35%; net profit attributable to mother 6.

73 ppm, an increase of 23 in ten years.


The main business of cigarette labels has steadily increased.

The company seized the opportunity of the good development of the cigarette label industry, continuously adapted to the market, continued to increase the design and development of key specifications, key brand products, grasped the market opportunities for product structure adjustment, and continued to maintain its competitive advantage.

The company’s cigarette label 都市夜网 business in Q1 2019 achieved revenue of 20.

51 ppm, an increase of 10 in ten years.

twenty four%.

The strength of color box products increased rapidly, forming the company’s second pillar.

The company has continuously strengthened the R & D design and production process to speed up the process of intelligent production. Fine-quality tobacco packaging, 3C product packaging and other color box packaging have achieved good results.

In terms of wine packaging business development, the company signed strategic cooperation agreements with Moutai Technology and Wuliangye Fine Printing to carry out in-depth cooperation.

Among these announcements, the Shenren Packaging Capacity Reconstruction and Expansion Project is currently undergoing the approval process business of the Coarse Taiwan Group, and Yibin Jiamei, a joint 武汉夜生活网 venture established with Wuliangye Fine Printing, is expected to officially start production in November.

2019Q1-3 company’s color box products realized revenue 5.

500,000 yuan, an annual increase of 104.

65%, complete long-term goals and tasks in advance.

In terms of color box customers and product development, the company has maintained well-known tobacco and alcohol brands such as “China (Jinzhongzhi)”, “Nanjing (Respect of the Ninth Five-Year Plan)”, “Yunyan (Dazhong Jiu)”, and “Moutai Alcohol”.At the same time as the market share of fine color box packaging, the market continues to expand, product development efforts, and new customers are continuously released to expand new products.
The wine packaging also serves well-known liquor brands including Yanghe, Jiang Xiaobai, Jinjiu, etc. The new tobacco packaging customers have expanded more than 30 cooperative companies such as British American Tobacco, Renault Tobacco, Yue Ke, Ling Xi, Magic Flute, and mobile phone product packaging.Cover well-known customers such as vivo, Zhongnuo, Shanghai faction.
Investment suggestion: As a leader in cigarette labeling and large packaging, Jinjia Co., Ltd. is poised for new tobacco business with high dividends and low estimates.

We estimate that the company’s operating revenue for 2019-2020 will be 40.

37, 47.

68 ppm, an increase of 19 in ten years.

65%, 18.

12%; net profit attributable to mothers is 8 respectively.

89, 10.

71 ppm, an increase of 22 in ten years.

53%, 20.

47%, corresponding to PE of 16.

4x, 13.

6x, maintain “Buy” rating.

Risk factors: industry competition intensifies; there is uncertainty about domestic new tobacco policies.