\u3000\u3 Bohai Water Industry Co.Ltd(000605) 136 Shanghai Lily&Beauty Cosmetics Co.Ltd(605136) )
Core view
Performance: the profit increased steadily year-on-year, and the effect of cost reduction and efficiency increase was further demonstrated. In 21 years, the revenue was 4.155 billion yuan, a year-on-year increase of - 9.67%, and the net profit attributable to the parent company was 411 million yuan, a year-on-year increase of + 20.99%. The net profit attributable to the parent company achieved double-digit growth for eight consecutive years. The decline in revenue was mainly due to the change of revenue recognition mode caused by the transformation of some cooperative brands from distribution mode to agent operation mode. Quarter by quarter, Q4 achieved a revenue of 1.654 billion yuan, a year-on-year increase of - 22.56%, and a net profit attributable to the parent company of 148 million yuan, a year-on-year increase of + 0.96%.
Revenue splitting: emerging platforms grew rapidly, and the gross profit margin of e-commerce retail business increased. China's Tmall / China tiktok international / other revenue share is 89.27%/3.95%/6.78%, respectively, and the revenue is 1 -14.78%/1.43%/228.51%, and the revenue is -14.78%/1.43%/228.51% respectively. The company still operates on Tmall platform, and the business of the other business is obviously growing. 2) Sub products: beauty care / other categories account for 97.50% / 2.50% respectively; 3) By Region: the proportion of domestic / overseas revenue is 95.32% / 4.68% respectively; 4) Sub sales mode: e-commerce retail business / brand marketing operation business / others accounted for 93.19% / 5.22% / 1.60% respectively, and the revenue was - 11.25% / 8.85% / 73.06% year-on-year respectively. The structural adjustment was mainly due to the transformation of some brands from e-commerce retail business mode to brand marketing service mode.
Profitable operation: the gross profit margin and net profit margin increased both, and continued to reduce costs and increase efficiency. The gross profit margin in the year of 21 was 36.46%, with a year-on-year increase of + 6.10pct, mainly due to the increase of gross profit margin caused by the transformation of business model of some cooperative brands (the distribution mode was changed to agent operation mode and switched to high gross profit service fee mode); The net interest rate increased by 2.52pct to 9.86%; The sales rate increased from + 3.53pct to 20.12% year-on-year, mainly due to the retroactive adjustment of accounting policies. In terms of operating capacity, the number of inventory turnover days in 21 years + 60.43 days to 143.60 days, mainly due to the expansion of brand business and the increase of goods preparation; The net operating cash flow was -134 million yuan, a year-on-year increase of - 176.39%, mainly due to the expansion of business and the increasing pressure on goods preparation.
Risk warning: the epidemic situation repeatedly affects the demand; Some cooperative brands terminate or change the mode of cooperation.
Investment suggestions: continue to reduce costs and increase efficiency, pay attention to the expansion of new brands and new platforms, and maintain the "buy" rating. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 494 / 580 / 647 million, with a year-on-year growth rate of 20 / 18 / 12%; Diluted EPS = 1.23/1.40/1.56 yuan, and the current share price corresponds to PE = 17 / 14 / 13X. As a head beauty agent operator, the company has profound multi brand and multi-channel operation ability. Specifically, 1) brand cooperation: through independent brand incubation and external investment, the company continues to expand the brand matrix. Brand incubation has made rapid progress, and has successfully incubated multiple private brands; 2) platform operation: continuous investment and rapid growth for tiktok and other emerging platforms. In the 21 years when the Internet industry has strengthened governance and traffic growth has slowed down, it has helped the diversified development of the platform and reduced costs and increased efficiency through full category consumer insight and multi-year data model, so as to realize the steady growth of performance; In the medium to long term, the company is expected to enhance the existing tiktok brand business and expand its new brand and new category development, shaking and other platforms to gain new profit growth points, and drive continuous improvement of performance. Maintain the "buy" rating.
