\u3000\u3 Shengda Resources Co.Ltd(000603) 605 Proya Cosmetics Co.Ltd(603605) )
Core view
Event: the company released the announcement of operating data from January to February 2022. From January to February 2022, the company realized a total operating revenue of about 630 million yuan, with a year-on-year growth rate of about 30%; The profit attributable to shareholders of listed companies was about 60 million, with a year-on-year growth rate of about 35%.
The March 8th Festival greatly promoted the performance, and the sales of cosmetics and skin care brands occupied the top list of all platforms. In the first promotion of March 8th festival in 2022, all brands of the company achieved excellent results. 1) Proya Cosmetics Co.Ltd(603605) : the main brand tiktok Tmall official flagship store has increased by more than 200% year-on-year, and the turnover volume of the shaking platform has increased by more than 100% over the same period of last year. The sales volume of the Tmall brand is up to 100%. Tmall’s “3.8 courtesy day” beauty industry TOP5, the national beauty makeup, skin care first, “early C night A” sales volume 78 thousand, double anti essence 160 thousand, feather sense sunscreen 280 thousand. 2) Caitang: the transaction amount of tmall platform increased by 400% year-on-year, and won the top list of multiple categories, among which the “master grooming sector” won the top 1 of highlight category for a second time. Tiktok is the TOP2 of China’s makeup, and its sales increased by 1800% over the same period last year.
The strategy of large single product is continuously verified, and the product drives the brand upgrading. The company is driven by product force, driven by large single products to promote single product series, constantly improving large single product matrix, extending from essence to cream, eye cream category, from anti-aging to repair efficacy, has accumulated double anti elite, rubies and other large single product matrix. Based on the digital management of product life cycle, the company continues to upgrade the composition, formula, packaging materials and design of core large products, so as to strengthen the sense of brand technology and youth.
Online is the main line and offline is parallel, focusing on the refined operation of channels. The company focuses on online channels and contributes 70% of its total revenue in 2020. Online traffic gradually shifted from traditional electricity providers to new trends such as short video. The company has increased the layout of new social networking tiktok platforms such as jitter from 21H2. At present, tmall’s official flagship store has 14.56 million fans, and the platform ranked among the top three in the sales of beauty and skin care in January and February; Tiktok shop fans 3 million 751 thousand, keep vibrato brand shop beauty makeup tiktok TOP3. In terms of offline channels, daily chemical franchise stores, supermarkets and other channels have been arranged.
Profit forecast and investment suggestions: with efficient operation management and accurate market insight, the company has continued to make breakthroughs in the strategy of large single products, mature main brand development, fast and large-scale volume of Caitang in the second growth curve, grasp the flow dividend online, pay attention to the self broadcast and head KOL cooperation, and the channel sales have continued to increase. We expect the net profit of the company in 21-23 years to be RMB 600 million, RMB 750 million and RMB 910 million respectively, corresponding to 56, 45 and 37 times of PE. We will give a “buy” rating for the first time.
Risk warning: the sales of new products are less than expected; The risk of intensified industry competition; The epidemic situation is repeated.
