Investment advice
Cosmetics: the enforcement of the new regulations on cosmetics continues to be tightened. General purpose cosmetics containing whitening ingredient “377” are required to be forcibly removed from shelves and all products in production are stopped, Relevant products need to be re registered as special-purpose cosmetics (whitening efficacy is special efficacy, applicable to the registration system, and the registration cycle is usually 1-2 years, not applicable to the filing system). In January 22, there is no buffer period for the efficacy verification required by the new product registration and filing, and the brand competition under the new regulations returns to product power. It is suggested to pay attention to the head brand Yunnan Botanee Bio-Technology Group Co.Ltd(300957) / Proya Cosmetics Co.Ltd(603605) and Lushang Health Industry Development Co.Ltd(600223) in the rising period ； It is expected that the large brand OEM will be less affected by the new regulations. At the same time, the demand for functional raw materials will increase and benefit the upstream raw material suppliers Nanjing Cosmos Chemical Co.Ltd(300856) .
Diamond jewelry: global diamond demand is picking up, wholesalers have replenished their stocks, and it is expected that the recovery will continue to the first half of 22 years; Benefiting from the recovery of global diamond terminal retail, India’s imports of rough diamonds and exports of finished diamonds increased significantly year-on-year in October, After the Diwali festival (November 3-7), Indian processing plants have expanded their production capacity to meet the demand for 22q1 orders (wholesalers are expected to replenish their inventory in 22q1 after the peak sales season of 20q4). At present, the global diamond inventory of 30-40 finished products has increased, but there is still a shortage of more than 1 carat. The demand for diamond terminals has improved, driving the price of rough diamonds to rise by about 20% since the beginning of 21.
Main points
Market Review
This week, the Shanghai Composite Index, Shenzhen Component Index and Shanghai Shenzhen 300 rose 1.63%, 1.47% and 3.14% respectively, and the cosmetics sector rose 4.53%, outperforming Shanghai and Shenzhen 3001.39pct, which is in the middle and upper reaches of the industry. In terms of individual stocks, baozun e-commerce, Yunnan Botanee Bio-Technology Group Co.Ltd(300957) , Guangdong Marubi Biotechnology Co.Ltd(603983) led the increase, while Yixian e-commerce, Lafang China Co.Ltd(603630) led the decrease. Diamond jewelry sector fell 0.56% this week, underperforming Shanghai and Shenzhen 3003.70pct, which is located in the middle and lower reaches of the industry. In terms of individual stocks, Shanghai Yuyuan Tourist Mart (Group) Co.Ltd(600655) , Fiyta Precision Technology Co.Ltd(000026) led the increase, and Shenyang Cuihua Gold And Silver Jewelry Co.Ltd(002731) , Mclon Jewellery Co.Ltd(300945) , Henan Huanghe Whirlwind Co.Ltd(600172) led the decline.
Industry dynamics
Industry news: BASF, an industrial raw material giant, will expand Shanghai Jinshan sunscreen production line; Yayang’s parent company acquired ladrome and overweight the aromatherapy track; Freida has opened the health care products industrial park to enable the layout of the cosmetics industry chain; Guangdong Marubi Biotechnology Co.Ltd(603983) the latest scientific research achievements have been published in international journals, and biological fermentation technology has made a breakthrough; The supervision of products under the new regulations has been tightened. In 2021, the state and local drug administrations have notified cosmetics products and enterprises 79 times, involving 525 batches of cosmetics; In November, the global diamond market demand was stable, and the tight supply of large grain diamonds led to a rise in prices.
Key announcement: (cosmetics) Lancy Co.Ltd(002612) the general meeting of shareholders failed to pass the proposal on investment and establishment of medical American Equity Investment Fund Boheng No. 1 and related party transactions; Bloomage Biotechnology Corporation Limited(688363) The high-tech Innovation Park of Shandong Industrial Technology Research Institute is selected as the new site of the company’s Jinan R & D center. The adjustment and upgrading of Tianjin sodium hyaluronate and related projects are expected to be completed and officially put into production before April 2022. (diamond jewelry) Henan Liliang Diamond Co.Ltd(301071) 2021 annual performance forecast: it is expected that the net profit attributable to the parent company will be 231.5 million yuan – 244.5 million yuan, an increase of 217.14% – 234.95% at the same time, and the basic earnings per share will be 4.72 yuan / share – 4.98 yuan / share; Mclon Jewellery Co.Ltd(300945) in November, two direct stores, wanxianghui store in Luyang, Anhui Province and Longding Wanda store in Jiaxing, will be added.
Risk statement
The development of new products / marketing / channels is less than expected; Loss of key customers of production / agent operators.
