\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 315 Shanghai Jahwa United Co.Ltd(600315) )
Event: the company released its annual report for 2021. During the reporting period, the company achieved revenue of 7.646 billion yuan, an increase of 8.73% and net profit attributable to parent company of 649 million yuan, an increase of 50.92% and deduction of net profit not attributable to parent company of 676 million yuan, an increase of 70.76% and EPS of 0.96 yuan. The company’s performance exceeded expectations and its business maintained rapid expansion. 21q4 company achieved revenue / net profit attributable to parent company of RMB 1.816229 billion, with an increase of 8.71% / 93.76% at the same time. The results of cost reduction and efficiency increase were remarkable, and the profitability was greatly improved.
Comments:
The high growth of skin care products business drives the rapid growth of operating revenue. Focusing on the “123” business policy, the company adheres to promoting brand innovation, marketing innovation, channel upgrading and digital transformation, and overcomes the impact of short-term factors on special channel business and overseas business. The channel side of the company is led by e-commerce business, and the brand side focuses on skin care products, achieving good business results. In 2021, the company’s skin care products business performed well, achieving a revenue of 2.697 billion yuan, an increase of 22.22% and accounting for 35.31% of the revenue. The company focused on explosive products, streamlined SKUs, and continuously improved its product innovation ability. The overall sales proportion of head products of its own brand increased significantly. The repurchase rate of baicaoji, the main brand, in tmall flagship store and department store increased by 7.88pct to 41.61%, and Yuze’s repurchase rate in tmall flagship store increased by 6.22pct to 42.58%. The business of personal care, mother and baby and cooperative brands has been steadily promoted. In 2021, the revenue reached 2410 million yuan, 2158 million yuan and 373 million yuan, an increase of 0.42%, 4.18% and 6.48% respectively.
The proportion of high gross profit businesses has increased, various expense rates have been continuously optimized, and profitability has been improved. In 2021, the gross profit margin of the company was 58.73%, with an increase of 2.84 PCT, mainly because the company adhered to the differentiated brand development strategy, positioned the rapid growth of skin care business with high gross profit, and optimized the product structure. Affected by the significant increase of marketing expenses and equity payment expenses, the company’s sales expenses in 2021 were 2.947 billion yuan, an increase of 11.68% at the same time. Benefiting from the scale effect, the sales expense rate in 2021 decreased by 3.05 PCT to 38.54% at the same time; In 2021, the financial expense ratio decreased by 0.45pct to 0.16%, mainly due to the year-on-year decrease in the company’s loan interest rate, resulting in the year-on-year decrease in bank loan interest expenditure; In 2021, the company’s R & D project investment and share based payment expenses increased year-on-year, driving the company’s R & D expense rate to increase by 0.08pct to 2.13%. Overall, the company’s net profit margin increased by 2.37 PCT to 8.49% in 2021, and its profitability improved significantly.
Brand innovation channels have advanced steadily, and the business quality has blossomed at many points and continued to improve. The company maintains strategic concentration. Under the guidance of the “123” policy, the company has made various layout and continuously improved its core competitiveness. 1) Channel advancement: in terms of online business, the company actively promotes the refined operation of multiple platforms, strengthens the layout of tmall store self broadcasting, and the personnel of jd.com platform iterate, optimize and adjust to turn losses into profits, and is interested in e-commerce to explore new ways of playing in people and goods yards; In terms of offline business, the company actively promotes smart new retail business, optimizes and closes inefficient stores, and online four seasons spa business, so as to improve efficiency and turn losses into profits. 2) Brand innovation: Based on research, the company continues to improve its product power. Around the hit strategy, the company cooperates with tmall innovation center to enable the development of new products and the creation of popular models, focusing on the head SKU. 3) Marketing Innovation: the company’s cross-border IP builds brand value, word-of-mouth marketing enables new re purchase, immersive live content experience, and establishes a new benchmark for live broadcasting in the industry.
Profit forecast and investment rating: the high outlook of the industry continues to be superimposed on the continuous improvement of the company’s brand and product strength and the continuous optimization of channels. We raise the EPS forecast for 202223 to 1.20/1.53 yuan (the original value is 1.13/1.51 yuan), and the EPS forecast for 2024 to 1.76 yuan. At present, the stock price corresponds to 30.52 times PE in 22 years. We are optimistic about the company’s focus on R & D innovation, product innovation and continuous exploration in channels and marketing for a long time, The company is expected to further consolidate its dominant position, expand its market share and maintain its “buy” rating.
Risk factors: covid-19 epidemic rebounded, new product market acceptance was lower than expected, industry competition intensified, etc.
