\u3000\u30 Shaanxi Zhongtian Rocket Technology Co.Ltd(003009) 57 Yunnan Botanee Bio-Technology Group Co.Ltd(300957) )
[key points of investment]
The company focuses on subdivided tracks and successfully creates a leading brand of sensitive muscle care. Winona uses natural plant active ingredients to provide mild and professional skin care for sensitive muscles. The company's executives have a deep professional background. From 2017 to 2020, the company achieved rapid growth, with revenue and net profit attributable to parent CAGR of 50% and 52% respectively, higher than the growth rate of the industry, and successfully ranked among the leaders of effective skin care products in China. Winona ranked first with a market share of 22% in 2021. Strengthen the brand power and build the pricing power of segment track products. From 2017 to 2020, the gross profit margin was 81% / 81% / 80% / 76% respectively, higher than that of comparable companies.
The market of Dermatology grade skin care products has grown up with domestic products. 1) Industry growth space: it is estimated that the market scale of Dermatology grade cosmetics will be 44 billion yuan in 2024, and the CAGR will reach 26.7% from 2019 to 2024. The driving factors include the objective environment and the improvement of consumers' subjective skin care awareness. Vertically, from 2014 to 2019, the CAGR of China's dermatological cosmetics market was as high as 23.2%. High frequency and re purchase supported the broad market space of dermatological skin care products. Horizontally, compared with Japan, South Korea, Europe and the United States, the per capita consumption level of skin care products and the penetration rate of skin grade in China have more room to improve. 2) Competition pattern: the market share of domestic brands has increased from 15% in 2015 to 30% in 2020, seizing the share of traditional international brands; Winona's market share and ranking continue to rise. Under the trend of strengthening industry supervision, the company, as a compliance leader with brand strength and R & D barriers, is expected to benefit.
Product side: differentiated positioning cuts into the subdivided track, and the origin of core raw materials is strongly bound. 1) The company's focus on moisturizing products has made a steady contribution to the company's core revenue, accounting for 20% of the company's revenue. 2) The company's efficient application of raw materials, Yunnan characteristic plants and strong R & D ability supported by the medical background ensure the continuous incubation strength of "Shumin +" new products and new brands such as baby and anti-aging.
Channel end: start offline and focus on online, and accelerate the layout and construction of all channels. 1) Online: public domain drainage, private domain repurchase. Relying on the large flow of tmall channel and the strong drainage of high daily life, the company cooperates with offline Ba to transform customers into highly viscous customers in private channels, so as to resist the increasing cost of obtaining customers on the Internet platform; 2) Offline: professional cornerstone, new growth opportunities. Since its establishment, the brand has settled in specialized offline channels such as hospitals and clinics. Now it is accelerating the expansion of offline channels with high barriers such as OTC, so as to inject new increment into the company.
Marketing: medical background, professional endorsement, and consumer education in grass planting. 1) Make full use of its own medical resources and actively participate in academic conferences of dermatology. Its professionalism and safety have been highly recognized by dermatologists, consumers' trust has increased day by day, and the brand professionalism and its binding with "sensitive muscle repair" have been continuously strengthened. 2) tiktok and other forms of content marketing, such as micro-blog, jowl, Xiao Hong, and other platforms, have been growing rapidly, tiktok and other new channels have been closed.
[investment suggestions]
The company focuses on the track of efficacy skin care products, the market share of main brands continues to increase, focusing on online self-management, enhancing channel control, making good use of medical background marketing to highlight professional advantages. Based on the excellent performance of online new channels and offline OTC channels, we slightly raised our forecast of the company's operating revenue and net profit attributable to the parent company from 2021 to 2023. It is estimated that the company's operating revenue will be RMB 3.893/54.95/7.257 billion respectively from 2021 to 2023, with a year-on-year growth rate of 47.65% / 41.17% / 32.06% respectively; The net profit attributable to the parent company was 844 / 1211 / 1608 million yuan respectively, with a year-on-year growth rate of 55.25% / 43.55% / 32.72% respectively; EPS is 1.99/2.86/3.80 yuan / share respectively; On March 15, the closing price corresponding to PE was 75 / 52 / 39 times respectively. Under the PE valuation method, the company is given 67.68 times PE in 2022, corresponding to the 12-month target price of 193.55 yuan, which is raised to the "buy" rating.
[risk tips]
The performance of the new brand is less than expected;
Stricter regulation of industrial policies;
Intensified brand competition in the same industry;
The ban on restricted shares was lifted.
