\u3000\u3 Shengda Resources Co.Ltd(000603) 605 Proya Cosmetics Co.Ltd(603605) )
Event: the company released the operation data announcement from January to February 2022. From January to February 2022, the company realized an operating revenue of 630 million yuan, an increase of about 30% at the same time; The net profit attributable to the parent company was 60 million yuan, with a year-on-year increase of about 35%. The company’s sales momentum was good, and achieved stable growth from January to February.
Comments:
High quality development drives high performance growth, and the company has strong growth momentum. On the one hand, the company adopts the strategy of large single product, creating multiple quality single products, such as double anti essence, ruby essence, feather feeling sunscreen and so on, and gradually extends from single product to product range. On the other hand, the company actively adapted to the channel change, and on the basis of traditional online mode, took the lead in the trembling tiktok platform, and the first mover advantage was strong, and built the core driving force of revenue growth. Benefiting from the continuous efforts of new channels such as big tiktok strategy and jitter, brand potential has been steadily improved, and revenue has been kept at a high growth rate. In addition, the company actively laid out the new brand Caitang, built the second growth curve, steadily promoted the multi brand strategy, and the long-term growth prospect is expected.
Online direct marketing advantages continue to strengthen, and emerging channels bring incremental revenue. The national trend of cosmetics industry continues, and the company is recognized by consumers as a high-quality representative. During the 3 / 8 Festival 2022, the company’s brand lines continued to exert force, and successfully developed new channels from Tmall single tiktok to jitter, and promoted the brand to continuously open up the ceiling. According to official website released data, during the 3 / 8 Festival, the main brand Proya Cosmetics Co.Ltd(603605) Tmall official flagship store GMV increased by more than 200%, shaking platform GMV increased by 100% or more, and was honored with Tmall international makeup and Jingdong tiktok skin care ranking TOP1; The sub brand Caitang Gmv increased by more than 400% year-on-year, and opened for sale for 40 minutes, breaking through the full-time Gmv in the same period last year. The company maintains its head position by making use of the advantages of Tmall, jitter and other online channels, such as tiktok advantage, differentiated commodity strategy and efficient self broadcasting, and further drives the company’s online revenue to increase.
Profit forecast and investment rating: we are optimistic about the upgrading of the company’s main brand, the development of emerging channels and multi brand development. We maintain the company’s EPS forecast of 2.91/3.71/4.78 yuan from 2021 to 23. At present, the stock price corresponds to 45.07 times PE in 22 years. There is a large growth space for domestic cosmetics in the future, and maintain the “buy” rating.
Risk factors: the intensification of brand competition leads to the extension of multi brand new channels not meeting expectations; The rising cost of online traffic affects the risk of profit margin; The downturn of industry prosperity brings the risk of slowing down revenue growth.
