Shanghai Jahwa United Co.Ltd(600315) (600315)
Main points:
"Z generation" has developed the inertia of seeking beauty and helped the cosmetics industry increase both volume and price
The cosmetics industry is in the stage of intergenerational transformation. The "Z generation" growing with the Internet has released the demand for beauty earlier, and has formed the inertial behavior of skin care and makeup. With the "Z generation" gradually moving towards the workplace, driven by consumption upgrading, it is expected to become a booster for the simultaneous rise of volume and price in the industry. In addition, compared with the traditional purchase behavior, cosmetics consumption is more rational, pay more attention to ingredients and efficacy, weaken the blind pursuit of brands, and give domestic products a better growth environment. During the post epidemic period, sensitive, dry and other skin problems caused by "mask face" broke out one after another, accelerating the more targeted differentiation process of effective skin care. The industry scale is expected to continue to grow rapidly under the dual effects of audience expansion and deep excavation of single customer value.
Big data helps insight into new opportunities
By combing the products, the company focuses on the head brands such as Yuze and baicaoji. Yuze brand focuses on skin care, seizes the bonus of social media and live broadcast traffic, and fully consolidates the brand image with strong barrier repair power, which is expected to continue to grow. Baicaoji adopts cutting-edge Chinese herbal skin care to compete with international brands. Innovative marketing methods have promoted the popularity and younger transformation of the company. This year's double eleven company's innovative voice of the two companies is using the tiktok plot. The online number of the live broadcast of the fifth day live broadcast of the extended Jubilee palace is 50 thousand, which will enhance the confidence of the brand recovery. In addition, the company, in collaboration with Tmall innovation center, strengthens consumer insight and ensures the creation of explosive products through big data analysis capabilities. For example, in the TMIC white bottle test, consumers prefer nicotinamide to white mud mask better than competing products.
Tiktok's new retail process accelerates, active layout of the line is shaking and private sector operations are running.
The company optimized and adjusted the traditional channels, strategically closed and downsized the Department Store channels, comprehensively accelerated the new retail layout and improved the operation efficiency. In the first three quarters of 2021, the company's new retail business achieved a year-on-year growth of 100%, accounting for more than 10% of China's offline business. Tiktok tiktok, a company's focus on expanding the channel of jitter, and Taobao and jitter, has been a rapid growth of GMV in the third quarter of 2021. The total number of GMV in the tiktok shop was 20 million yuan. By the end of the third quarter of 2021, the total number of private domains such as wechat group, Taoqun and Tequ had accumulated 450000. It is expected that in the future, after the company introduces consumers into the private domain ecological cycle through a single brand, it is expected to form a cross repurchase network among brands to reduce traffic costs.
Investment advice
The company's brand building is changing from "multi brand" to "excellent brand". Through "survival of the fittest", the company tilts resources to products with large single products and popular characteristics, so as to achieve a win-win effect of natural drainage and performance growth. In cooperation with tmall innovation center, digital empowerment helps the company grasp the marginal changes of consumption trend and gain insight into new market opportunities. Make concerted efforts online and offline to create private traffic and enhance customer stickiness. We expect that the company's EPS from 2021 to 2023 will be 0.78, 1.17 and 1.55 yuan / share respectively, corresponding to 51, 34 and 26 times of the current share price PE respectively. For the first time, give a "buy" rating.
Risk statement
New product promotion is not as expected; The progress of online channel expansion is less than expected; Industry competition intensifies; The epidemic situation is repeated.
