Lushang Health Industry Development Co.Ltd(600223) (600223)
event:
On November 24, the company announced that Freda biology, a wholly-owned subsidiary of the company, received the notice on the results of capital increase listing announcement issued by Shandong property rights trading center on that day. As of the expiration of listing on November 23, 2021, an intended investor has submitted an investment application, qualified for intended investment and paid a deposit of 73.824 million yuan, The investor is a joint purchaser composed of Nantong Zhaohua No. 2 emerging industry investment fund partnership and Guangxi Tencent Venture Capital Co., Ltd
Buy a body.
comment:
War investment has a high-quality background and is expected to enable the development of cosmetics
The consortium is purchased by Guangxi Tencent Hangzhou zhongdayuan ( Hangzhou Onechance Tech Corp(300792) actual control), Nantong Zhaohua (China Merchants capital actual control) / Jinan kinetic energy Jiafu (Shandong new kinetic energy actual control), Shanghai Zhongyuan (Shanghai newspaper group / Shanghai Urban Investment / Shanghai Shanghai Xinhua Media Co.Ltd(600825) It is composed of five companies. Among them, Tencent and Wangchuang, as the leading enterprises of Internet and e-commerce agent operation, are expected to provide more industrial resource support for the company’s cosmetics business in terms of online operation and traffic import in the future. Combined with the company’s strong R & D strength, the company’s cosmetics competitive advantage will be further enhanced.
The transformation of great health has been continuously promoted, and the 4 + n brand strategy in the cosmetics sector is clear
In 2018-19, the company successively acquired focus Biology (60.11%) and Shandong Furuida Pharmaceutical Group (100%), starting from the real estate business to lay out the cosmetics, medicine and raw materials business. Furuida’s cosmetics business officially opened the “4 + n” brand strategy: hyaluronic acid (Yilian) + micro ecological protection (Dr. yu’er) + fragrance (yipahan) + precision skin care (good face) + n (UMT, etc.), among them, Dr. Yilian and Dr. yu’er have begun to enter the stage of large-scale growth, and the sales revenue in the first three quarters was 427 million yuan / 488 million yuan respectively. The company’s cosmetics business achieved rapid growth. From January to September 2021, the company’s cosmetics sector achieved revenue of 993 million yuan, a year-on-year increase of 174.6%.
Profit forecast and investment suggestions:
The 4 + n strategy of the company’s cosmetics business is clear. Previously, the company has carried out strategic cooperation with Hangzhou Onechance Tech Corp(300792) to build EPAR Khan. The introduction of war investment is conducive to further releasing the growth potential. We expect that the company’s EPS in 2021-23 will be 0.72, 0.89 and 1.1 yuan respectively, and the corresponding PE will be 20x / 17x / 13X respectively, maintaining the “buy” rating.
Risk statement
1) Cosmetics sales are lower than expected; 2) Fluctuation risk of real estate business; 3) Drug policy supervision risk.
