Core view
Important data: according to the online cosmetics sales data in January 2022, the off-season market sales remained stable, the market structure appeared differentiation, the growth of Winona, Proya Cosmetics Co.Ltd(603605) and other brands was bright, and the head domestic cosmetics brands welcomed the rapid growth: 1) tmall platform: skin care products gmv61 in January 2022 900 million yuan, with a year-on-year increase of 5.8% and a month on month decrease of 16.2%. Gmv, an imported skin care brand, fell year-on-year, and the growth rate of domestic head brands was bright, Proya Cosmetics Co.Ltd(603605) and Winona recorded high growth rates of 67% and 78% respectively; Make up in January 2022, the Gmv of make-up sales on tmall platform reached 3.28 billion yuan, with a year-on-year increase of 3% and a month on month decrease of 10.5%. In January, the sales of domestic head makeup brands were differentiated. The sales volume of huaxizi and perfect diary tmall decreased by - 43% and - 62% respectively year-on-year, and Karachi increased rapidly by 15% year-on-year. 2) tiktok platform: skin care products dropped tiktok in January, and January 2022, sales of GMV on skin were 2 billion 652 million yuan, a 21.6% decline. Make up gmv12.0 in January 2022 3.9 billion yuan, down 7.2% month on month.
The valuation of the beauty sector is at the bottom of the past two years. The valuation of the sector is 20% lower than the historical quantile, and the safety margin is sufficient. As of February 16, 2022, the PE (TTM) of the beauty sector was 47.7 times, the valuation level was lower than the 20% valuation quantile (59.5 times) in the past two years, and was below - 1 times the standard deviation of the average valuation of the sector in the past two years. Since 21h2, the sector has experienced relatively full adjustment. At present, the valuation of the beauty sector is at a relatively reasonable level, and the safety margin is relatively sufficient.
In 2021, the performance of beauty leaders continued to increase, and the cost performance of key targets was highlighted. As of February 16, 2022, among the beauty companies that announced the performance forecast, the performance of Imeik Technology Development Co.Ltd(300896) in 2021 doubled year-on-year, and the upper limit of performance forecast of Syoung Group Co.Ltd(300740) , Shanghai Haohai Biological Technology Co.Ltd(688366) , Yunnan Botanee Bio-Technology Group Co.Ltd(300957) , Shanghai Jahwa United Co.Ltd(600315) increased by more than 50% year-on-year. The expected net profit of key targets of the sector in 22-23 years increased by 33.50% and 26.14% year-on-year, corresponding to PE of 32.4 and 25.7 times respectively. The performance of the sector is expected to maintain rapid growth, and the cost performance of key targets is prominent.
Investment suggestion: in 2021, China's cosmetics industry will have a zero year-on-year growth rate of 14%, and the demand for beauty will continue to grow rapidly. It is expected that the industry will maintain a high boom in the next few years. The short-term epidemic situation is superimposed with strict supervision, the market sales are flat, showing a trend of structural differentiation, and the domestic brands at the head of the subdivided track continue to grow rapidly. Under the large single product strategy, the R & D investment of domestic brands has been strengthened, the product strength and brand strength have been rapidly improved, a long-term moat has been built, and the superposition of strict supervision is conducive to the improvement of the market share of head brands. In 2021, the performance of the leading enterprises of beauty care was strong, and the performance price ratio of key targets was prominent. It is suggested to pay attention to the leader of sensitive skin care products Yunnan Botanee Bio-Technology Group Co.Ltd(300957) (300957. SZ), the light of domestic beauty makeup Proya Cosmetics Co.Ltd(603605) (603605. SH), the leader of century domestic daily chemicals Shanghai Jahwa United Co.Ltd(600315) (600315. SH), the leader of medical beauty injection Imeik Technology Development Co.Ltd(300896) (300896. SZ), the world's largest supplier of hyaluronic acid Bloomage Biotechnology Corporation Limited(688363) (688363. SH) Biomedicine + ecological health two wheel drive Lushang Health Industry Development Co.Ltd(600223) (600223. SH).
Risk warning: the epidemic situation is repeated, affecting the passenger flow of offline channels; The sales of new products are less than expected; Intensified market competition; Macroeconomic downside risks.
