\u3000\u3 Shengda Resources Co.Ltd(000603) 605 Proya Cosmetics Co.Ltd(603605) )
The beauty leader has been renewed for a long time, and the transformation and upgrading has created the light of domestic products. Since its establishment in 2003, the company has focused on the cosmetics business, focusing on the ” Proya Cosmetics Co.Ltd(603605) ” brand, incubating and expanding sub brands such as “Caitang” and “Kerui skin”, and jointly building a multi brand system covering skin care, make-up, washing and other categories. The net profit attributable to the parent company increased from caq1.24 billion yuan to caq1.32 billion yuan in 2020 (about 28.48% of the gross profit attributable to the parent company), and the net profit attributable to the parent company increased from caq1.24 billion yuan to caq3.43 billion yuan in 2020 (about 1.28 billion yuan of the net profit attributable to the parent company). The company has implemented the strategy of large single products, continued to transform and upgrade its main brand to medium and high-end, and continuously enhanced its youth and sense of science and technology. The potential of “light of domestic goods” is highlighted.
Product strength has boosted and supported the long-term development of the brand, and the radiation effect of large single products has been gradually verified. The company’s main brand Proya Cosmetics Co.Ltd(603605) 2021q1-3 accounted for 81% (YoY + 28%) of the total revenue, and the 2021h1 Proya Cosmetics Co.Ltd(603605) brand large single products accounted for 15% of the revenue, accounting for about 40% of the revenue of tmall platform. From 2018 to 2021h1, the per capita consumption increased from 109.9 yuan to 173.1 yuan, and the repurchase rate increased from 20.66% to 24.42%. Ruby / double resistance / source power and other products extend to cream / eye cream / ampoule and even makeup. With the R & D overweight as the fulcrum, the ruby / double anti classical essence has been upgraded to the 2 version, maintaining the original core component and improving the new components / packaging to stimulate the new consumption demand; The main functions of each series have clear selling points, which are both different and collaborative, leading the upsurge of concepts such as “morning C night a” and “skin care ABC”, and helping the brand fully cover the consumer population.
The advantages of online operation are highlighted, the growth continues to be high, and the optimization of offline structure drives a virtuous circle. 1) Online: 2021q3 revenue is 2.457 billion yuan (YoY + 74.25%), accounting for 81.85%. Through high-quality flow pool and operation advantages, the company has strong growth toughness in Taoxi / jd.com and other traditional e-commerce platforms. The ranking of tmall beauty rose from 26th in 2020 (Gmv 295 million) to 13th in 2021 (Gmv 683 million); Tiktok tiktok and other new channels first released and self broadcast, according to the fruit set data, 21 years brand shake GMV exceeded 900 million yuan, is expected to continue to grow. 2) Offline: 2021q3 revenue is 545 million yuan (yoy-37.83%), accounting for 18.15%. Take the initiative to reduce inventory and receivables, adopt strategies such as network simplification and upgrading and product structure adjustment, reduce the number of offline outlets by about 10% in 2021h1, and the offline growth is expected to be affected, which is expected to stabilize and recover in 22 years.
The group’s platform empowerment and multi brand matrix create a secondary growth curve. The company has set up a multi category and multi brand system with clear priorities and priorities, and created the road of group empowerment of new retail business / digitization. With resource sharing and efficiency improvement, the management rate of 20172021q3 showed a steady downward trend, which were 8.6% / 7.3% / 6.3% / 5.4% / 5.5% respectively. Through strong channel / marketing and other resource advantages, Caitang focuses on incubating potential sub brands. For example, through the differentiated competition of Guofeng makeup artist brand positioning, Caitang has a revenue of 111 million yuan in 2021h1, which has begun to take shape and is expected to further expand in the future; The polishing work of scalp care brand or, younger customized beauty brand yuefuti and high-efficiency skin care brand Kerui skin on the product / marketing side has been promoted in an orderly manner, and is expected to contribute to the secondary growth curve in the future.
Profit forecast and investment suggestion: as a classic domestic beauty enterprise, the company practices the long-term large single product strategy, the main brand continues to upgrade, and multi brand vitality is renewed. With organizational coordination and efficient channel operation, the company is expected to build a new generation of cosmetics group. We predict that the revenue from 2021 to 2023 will be 4.615/57.93/7.133 billion yuan, with the same increase of 23.0% / 25.5% / 23.1% respectively, and the net profit attributable to the parent company will be 5.81/7.26/893 billion yuan, with the same increase of 22.0% / 25.0% / 23.0% respectively. The current market value of the company is 33.6 billion yuan, corresponding to 46 times of PE in 2022, maintaining the “overweight” rating.
Risk warning: industry competition intensifies; New product promotion / sub brand incubation fails to meet expectations; Product quality management risk
