\u3000\u30 Shaanxi Zhongtian Rocket Technology Co.Ltd(003009) 57 Yunnan Botanee Bio-Technology Group Co.Ltd(300957) )
The year ended with a bright performance, and Q4 continued to increase. In 2021, the company achieved a revenue of 4.022 billion yuan (year-on-year + 52.57%), a net profit attributable to the parent company of 863 million yuan (year-on-year + 58.77%), and a net profit not attributable to the parent company of 813 million yuan (year-on-year + 58.59%). Among them, Q4 achieved revenue / net profit attributable to parent company + 56.66% / + 54.67% year-on-year.
The revenue of online and offline channels of the company continued to decline to RMB 3.34 billion, accounting for more than RMB 3.4 billion in 2020, and the revenue of online and offline channels accounted for more than RMB 3.4 billion. Tiktok’s revenue from online self built platform was +29.46% (11.24%), and the revenue of Ali platform was +45.56% (45.36%), which achieved steady growth and rapid rise of Kwai Chung’s emerging platform. 2) Offline: the company continues to expand Watson and OTC channels and improve its brand image by opening an offline experience center. By the end of 2021, more than 4000 Watson stores had been settled, and 20000 OTC channels had been covered. In 2021, the company’s offline channels achieved revenue of 708 million yuan, a year-on-year increase of + 57.76%, and the proportion of revenue increased to 17.60%.
The revenue of skin care products and medical devices increased, and the proportion of color cosmetics decreased: 1) skin care products: in 2021, the revenue of skin care products of the company was 3.629 billion yuan (year-on-year + 53.75%), the proportion increased slightly to 90.22%, and the gross profit margin was 75.37% (year-on-year -0.75 PCT); 2) Medical devices: the medical devices produced and operated by the company mainly include hyaluronic acid repair biofilm and hyaluronic acid repair patch dressing, which are mainly used for the protection and care of damaged skin after minimally invasive surgery. With the rapid development of China’s light medicine and beauty market, the postoperative skin repair and care market has great prospects. In 2021, the company’s medical device revenue reached 326 million yuan (year-on-year + 67.12%), accounting for 0.70 PCT to 8.10%; 3) Makeup: in 2021, the company’s makeup revenue was 530736 million yuan (year-on-year – 18.76%), accounting for 1.32% from 2.48% in 2020.
The main brand Winona continues to upgrade and iterate, adding new sub brands to expand the territory of skin health. 1) Main brand: Winona, the main brand, continued to grow in large quantities. In 2021, the sales of beauty category ranked No. 6 on tmall’s double 11 beauty list, and the annual brand growth rate on jd.com platform exceeded 30%. During the reporting period, focus on large single products and continuously improve the gross profit margin; 2) Sub brand: the company creates multiple sub brands and develops in coordination with the main brand. Among them, Winona baby focuses on infant sensitive muscle care. Its tmall flagship store became famous for the first time in the tmall double 11 event in 2021, ranking the top 10 in the subdivided industry categories, with a year-on-year explosive growth of more than 10 times; Beauty answers focuses on the light medical beauty market with medical beauty repair, high-end anti-aging and great potential; The company will also focus on building high-end anti-aging brand aoxmed in 2022, develop functional foods and expand the territory of skin health.
The gross profit rate declined slightly, the expense rate was well controlled, and the net profit margin increased: in 2021, the company’s gross profit margin was 76.01% (year-on-year -0.24 PCT), and the net profit margin increased by 0.86 PCT to 21.48%. The rates of sales / management / R & D / financial expenses were 41.79% / 6.10% / 2.81% / – 0.25% (year-on-year -0.21 / – 0.29 / + 0.41 / – 0.22 PCT). During the reporting period, the company increased sales expenses such as brand image promotion expenses and e-commerce channel expenses, increased R & D investment, established Yunnan characteristic plant laboratory, and upgraded R & D strength.
Profit forecast and investment suggestion: as a leading enterprise of sensitive skin care, the company has actively promoted brand construction and new product marketing in recent years, and its business has continued to achieve brilliant growth. Meanwhile, the company has newly established a wholly-owned private equity subsidiary, which is expected to further promote the layout of international beauty groups while providing project reserves for the company in the future. We expect that the company’s EPS from 2022 to 2024 will be 2.78/3.81/5.06 yuan / share respectively, and the PE corresponding to the closing price of 156.23 yuan on March 22, 2022 will be 56 / 41 / 31 times respectively, maintaining the “buy” rating.
Risk factors: the risk that the product expansion is less than expected and the industry competition intensifies.
