Bloomage Biotechnology Corporation Limited(688363) (688363)
Explore Bloomage Biotechnology Corporation Limited(688363) cosmetics business’s future development space from a long-term perspective: in recent years, the proportion of Huaxi cosmetics business revenue has increased to 60%, and the potential is expected. By combing the development process and core characteristics of L’Oreal, an international leader, we explore the current development stage of Huaxi in order to look forward to its future development space.
Looking for L’Oreal’s way to success, Huaxi has first seen similar genes. 1). Hold the exclusive ingredients of core raw material technology development: Huaxi self-developed and self-produced active substances drive product development, with cost advantages and exclusive technical barriers. Hyaluronic acid is the world leader, participates in the formulation of international industry standards, and has a global layout R & D similar to L’Oreal. Its R & D strength is the first in the same industry. 2). Brand positioning is superior: Huaxi’s brands choose to hold high and play high. The brand tone is high, and it is easier to expand downward in the future. The same is true of L’Oreal’s early brand positioning. 3). “Godfather” innovation ability: Huaxi insight into the consumers’ demand for fresh and hygienic cosmetics, innovatively launched the new category of “sub throwing fluid”, to avoid the traditional essence of many times to open bottles, easy to oxidize pollution, and attract friends to compete for imitation, which is similar to L’OREAL products.
Benchmarking L’Oreal, Bloomage Biotechnology Corporation Limited(688363) is in the development stage of L’Oreal in the 1970s. 1) The brand matrix has been formed, which has more advantages than single brand low ceiling. Brand building is high and high, and it is easy to penetrate into low in the future; 2) Huaxi made the first large-scale enzymatic production of small molecular hyaluronic acid in the world and launched the exclusive “secondary throwing essence”, which is similar to L’OREAL’s unique technology in the shampoo market. Benchmarking the development of L’Oreal in the 1980s and 1990s, the next decade will be the golden decade for the development of Huaxi. At present, the annual sales of runbaiyan has exceeded 1 billion, and more brands are expected to enter the “one billion club” in the future. We believe that Huaxi will continue to expand its brand matrix in terms of self construction and acquisition in the future, further enter the overseas market and become the light of domestic goods with international influence.
Investment suggestion: we are optimistic about the long-term value of the company. At present, the stock price fluctuates in the short term, and we give a Buy-A investment rating. In the long run, the company holds the technical advantages of core raw materials and gains market reputation with excellent product strength. Its core competitiveness is difficult to be copied and surpassed. Under the background of the rise of national tide and beauty economy, the company can resonate with the development dividend of the industry. It is estimated that the revenue growth of the company from 2021 to 2023 will be 70.6%, 45.1% and 43.1% respectively, and the net profit growth will be 22.5%, 43.4% and 43.8% respectively, with outstanding growth; Maintain the investment rating of Buy-A, with a 6-month target price of 222.5 yuan and a PE of 94x in 2022.
Risk tips: the covid-19 epidemic situation continues to deteriorate, and the effect of new products on the market is not as good as expected.
