Market Review
Last week (03.14-03.18), the CSI 300 index fell 0.94%. According to the statistics of the key weight companies selected by us (listed in the market of 1.1 sector in detail), the beauty care industry portfolio fell 2.37%, of which the medical beauty / cosmetics / personal care products fell 0.57% / 3.32% / 3.23% respectively.
Year to date, the CSI 300 index fell 13.65%. According to the statistics of the key weight companies selected by us (listed in the market of 1.1 sector in detail), the beauty care industry portfolio fell by 21.58%, of which medical beauty / cosmetics / personal care products fell by 23.55% / 20.57% / 20.61% respectively.
In terms of valuation, as of March 18, the price earnings ratio (TTM) of beauty care (801980. SI) further broke down to 43.60x, at a two-year quantile of 20.39%.
Core view
From January to February, the growth rate of zero data of daily necessities and cosmetics agencies was relatively sluggish, which was in line with the expectations under the background of weak consumption and repeated epidemics in many places. According to the data released by the National Bureau of statistics, the retail sales of social consumer goods from January to February 2022 totaled 7442.6 billion yuan, a year-on-year increase of 6.7%. Among them, the cumulative year-on-year growth rate of daily necessities / cosmetics from January to February was 10.7% / 7.0% respectively, and the cumulative retail sales reached 123.56 billion yuan / 61.78 billion yuan respectively. Since 2022, the already stressed consumer demand has faced further challenges under the repeated disturbance of the epidemic in many places across the country. Similar to the initial outbreak in 2020, cosmetics and daily necessities are slightly better than the overall consumption, showing strong resilience.
A number of listed companies released operating data for the first two months of 2022, which was significantly better than the industry as a whole. Up to now, the three listed companies in the sector have disclosed the main operating data from January to February 2022. In terms of growth rate, the cosmetics business of the three companies showed strong growth, Proya Cosmetics Co.Ltd(603605) / Bloomage Biotechnology Corporation Limited(688363) / Lushang Health Industry Development Co.Ltd(600223) revenue growth reached 30% / 55% / 146.7% respectively, which was significantly better than the overall growth rate of retail sales in the industry.
In the context of consumption upgrading and the prosperity of beauty culture, compliant cosmetics brands and medical beauty medicine and equipment leaders give priority to benefit and have good growth certainty. We believe that the current valuation of the sector is reasonable and continue to be optimistic about Imeik Technology Development Co.Ltd(300896) , Yunnan Botanee Bio-Technology Group Co.Ltd(300957) . We suggest paying attention to Proya Cosmetics Co.Ltd(603605) , Lushang Health Industry Development Co.Ltd(600223) , Bloomage Biotechnology Corporation Limited(688363) , Shanghai Haohai Biological Technology Co.Ltd(688366) , Furui medical technology, etc.
Key industry trends
The supreme law issued typical cases of consumer rights and interests protection, and the damage caused by false publicity by medical and American institutions should be paid three times; The State Food and Drug Administration will carry out drug safety rectification actions, and cosmetics and medical devices will become the focus of attention; Zhejiang issued the first provincial technical specification in the field of medical and aesthetic medicine in China; Mob Research Institute released the 2022 “generation Z” women’s insight report, and nearly 80% of generation Z women plan to do medical beauty.
Announcement of key companies
Shanghai Jahwa United Co.Ltd(600315) released the performance in 2021, with a revenue of 7.65 billion yuan, a year-on-year increase of 8.73% Imeik Technology Development Co.Ltd(300896) held the 2021 performance presentation meeting to firmly go to Hong Kong for listing and embrace supervision; Furui medical technology announced its performance in 2021, with a revenue of about $294 million, a year-on-year increase of 81.6% Aoyuan Beauty Valley Technology Co.Ltd(000615) director, vice president and Secretary Jiang Nan resigned; Furui medical invested 35 million yuan in Fuzhou Rick Brown medicine, holding 23.2% of the total; The layout of Sihuan pharmaceutical is photoelectric medical beauty, and the market scale is expected to exceed 50 billion in 2050 Lancy Co.Ltd(002612) said that it had not considered investing in the upstream industry of medical beauty Huadong Medicine Co.Ltd(000963) new series products will be produced and listed at the end of the first quarter C&S Paper Co.Ltd(002511) disclosed that the current production capacity of the company is more than 800000 tons; Hengan international completed a short-term financing of 1.5 billion yuan to supplement working capital and repay loans.
Risk tips
Risk of changes in industrial policies; The terminal demand is lower than expected.
