Cinda Securities: Proposed large-scale repurchase of Morning Light shares to strengthen confidence, trend of operational improvement emerging.

Cinda Securities research report pointed out that the large-scale share repurchase proposal of M&G Stationery enhances confidence, and the trend of operational improvement is emerging. The repurchase amount of 5-10 billion yuan is far higher than the past repurchase proposal scale, and the large-scale share repurchase proposal embodies threefold significance of transmitting confidence, value restoration, and team cohesion, highlighting the company's excellent cash flow and development confidence. In addition, competition in the stationery industry is intensifying, with IP collaborations, channel expansion, and new product iterations all relying on the execution power of the core team. The repurchase used for incentives is conducive to strengthening the stability of core employees, assisting in the rejuvenation transformation and the landing of innovative business initiatives. In addition, the company's dividend distribution ratio has been close to 70% over the past 25 years, and we expect the positive dividend policy to continue. Furthermore, overseas markets are gradually forming a category stronghold, with the potential to contribute additional growth in the future. Additionally, it is expected that the competitive pressure in office supplies group procurement will continue in the short term, but the market share is expected to further increase after the potential listing of KOLIPU. It is expected that each business segment in Q2 will continue to show a positive trend, and the traditional core business is expected to achieve year-on-year positive growth due to a low base. It is expected that the company's attributable net profit from 2026 to 2028 will be 14.6 billion, 16.0 billion, and 17.4 billion yuan respectively, corresponding to PEs of 14.2x, 12.9x, and 11.9x.