\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 315 Shanghai Jahwa United Co.Ltd(600315) )
Core view
A hundred years of daily chemical, lasting. The company is a leading daily chemical enterprise with a long history. It has a relatively perfect multi brand and multi category matrix, covering skin care, personal care, home cleaning, mother and baby and other categories. The main brands include baicaoji, Yuze, Liushen, meijiajing and so on. China is the world’s second largest cosmetics and personal care market. From 2017 to 2021, the zero scale CAGR of cosmetics agencies reached 12.5%, which still maintained a good development trend under the epidemic. Domestic brands have successfully broken through in many categories, and the future growth can be expected. The opportunity of local brands is at the right time.
The effect of the new management reform is beginning to show. After taking office, Mr. Pan Qiusheng put forward the 123 business policy, that is, taking consumers as the center, brand innovation and channel upgrading as the two basic points, and culture, system and process and digitization as the three boosters. In 2020, the company closed 462 low yield counters and stores, cleaned up the contract costs for various channels, and built a digital operation team. Under the epidemic, the company realized a deduction of non net profit of 396 million yuan, an increase of 4.3% year-on-year. Yuze, Jiaan, Shuangmei and other brands have achieved rapid growth, and baicaoji and MAXAM, which have been declining for many years, have also been improved. The transformation of the company is expected to be better, and will soon enter a new round of high-speed development. Based on the restricted stock incentive in 2020, the company will launch the individual stock option for the Chairman Pan Qiusheng in 2021, which is expected to mobilize the enthusiasm of employees and realize the long-term development of the company.
Baicaoji and Yuze lead the rapid growth of skin care products. The company has vigorously developed skin care products with high gross profit and high growth, and successively launched a variety of new products in line with the peak promotion season. Since listing, the market feedback has been good. Brand baicaoji focuses on Taiji series and new Qibai series. Through de stocking, eliminating long tail SKUs and focusing on popular items, the performance will be significantly optimized in 2021. Brand Yuze is positioned in the skin grade sensitive muscle market, enjoying the rapid development dividend of the industry, seizing the flow outlet, and the impression of functional skin care brand is deeply rooted in the hearts of the people. In 2021, the turnover of Yuze tmall platform reached 1.133 billion yuan, a year-on-year increase of 23.7%.
Optimize the profitability of both channels. In recent years, the company has strategically reduced the long tail stores of department store channels offline, and closed 462 low yield counters and stores in 2020. By optimizing the counter and improving the image of the head counter, consolidate the advantages of CS channel, improve operation efficiency and actively expand new retail. The online platform reduces the number of head anchors, actively layout the jitter, and spells more business platforms, and improves the self capacity. Tiktok + community + live broadcast mode is adopted to stabilize the community through the construction of the private domain ecosystem. By the end of September 2021, the company has served 450000 people through wechat group, Taoqun, Tequ, private domain, etc.
Profit forecast: the company focuses on the track of high growth skin care products, continues to optimize the product structure, increase the proportion of high gross profit products, and enhance its profitability. Restore high-speed growth online, actively promote store self broadcasting, member operation and private domain traffic layout, and continue to promote new retail offline. The brand and channel optimization reform has achieved remarkable results, improved efficiency and enhanced profitability. It is estimated that the company’s net profit attributable to the parent company from 2021 to 2023 will be RMB 655 / 807 / 985 million, corresponding to pe38 / 31 / 25 times. “Overweight” rating is given for the first time.
Risk warning: the promotion of new products is not as expected; Intensified market competition; The epidemic has repeatedly affected offline channels.
