\u3000\u30 Shaanxi Zhongtian Rocket Technology Co.Ltd(003009) 57 Yunnan Botanee Bio-Technology Group Co.Ltd(300957) )
Event: the company released its annual report for 2021. During the reporting period, the company achieved revenue of 4.022 billion yuan, an increase of 52.57%, net profit attributable to the parent company of 863 million yuan, an increase of 58.77%, deduction of non net profit of 813 million yuan, an increase of 58.59%, and EPS of 204 yuan. Driven by the company’s main brand, the company’s performance increased significantly. In 2021q4, the company achieved a revenue / net profit attributable to the parent company of 1.909507 billion yuan, a year-on-year increase of 56.7% / 54.7%, and maintained a rapid growth rate under the high base.
Comments:
The cosmetics business drives the rapid growth of revenue and the rapid opening of omni-channel operation. In 2021, the company continued to consolidate its main business, of which the cosmetics business achieved a revenue of 3.682 billion yuan, an increase of 51.77% and accounting for 91.55% of the revenue, which is the main driving force of revenue growth. Medical business contributed 326 million yuan in revenue, an increase of 67.18% at the same time. The company’s cosmetics business takes “Winona” brand as the core and “building China’s skin health ecology” as the mission, deeply insight into the needs of consumers and provide professional cosmetics that meet the needs of different skin characteristics. From the perspective of channel distribution, the company adheres to the sales model dominated by online channels and actively expands offline channels. In 2021, the revenue of the company’s main business online and offline channels accounted for 82.34% and 17.66% respectively. Online channel sales are mainly self operated retail business. Through flexible use of new media marketing means, the company makes full use of the huge user traffic gathered by mainstream e-commerce platforms to expand online channels. In 2021, the online self operated business contributed 2.532 billion yuan, accounting for 63.19% of the main business income. Offline, the company has actively developed a new retail system model, deeply cooperated with OTC customers, established regional chain leading strategic projects, and made preliminary progress.
The continuous high gross profit, optimized cost management and prominent scale effect drive the increase of net interest rate. In 2021, the company’s gross profit margin was 76.01%, basically stable. In terms of expenses, the company’s sales expenses increased by 51.81% to 1.681 billion yuan due to the company’s continued increase in brand promotion and e-commerce channel layout; Benefiting from the scale effect, the company’s sales expense ratio / management expense ratio decreased by 0.2pct/0.32pct to 51.81% / 6.09%. In 2021, the company’s R & D expense rate increased by 0.42pct to 2.81%, mainly due to the low base of R & D expenses due to the inability of the company’s R & D activities under the influence of the epidemic in 2020. Affected by the increase of the company’s current deposit interest, the company’s financial expense rate decreased by 0.21pct to – 0.25% in 2021. Overall, the net profit margin attributable to the parent company increased by 0.86pct to 21.48%.
With the dual penetration of efficacy expansion and category innovation, the emergence of sub brands has attracted much attention. On the one hand, the company adheres to the “cream cream + sunscreen” as the core explosive product, and continuously improves the product line of “high Moisturizing Series” and “clear sunscreen series”. On the other hand, we actively launch new products and expand product matrix. The company launched the new “freeze-drying mask series”, which is the main product to relieve the repair effect. It has successfully completed the circle, focusing on the new products of “whitening and anti aging”, and further built a multiple efficacy skin care matrix to help the brand spiral expansion. In terms of brand, in 2021, the company’s new brand “Winona baby” became a cutting-edge and high growth brand in the industry, ranking top 20 of tmall’s annual brand and top 10 of subdivided industry categories, with outstanding achievements. The company is expected to focus on the second market segment of beauty, which is expected to help the company further expand the market.
Profit forecast and investment rating:
The high-profile image of the medical beauty industry continues, the company’s new brands are successfully listed, the product matrix will be continuously enriched, and there is a large room for growth in the future. We lowered the EPS of 202223 to 2.70/3.55 yuan (the original value was 2.80/3.76 yuan), and it is estimated that the EPS of 2024 will be 4.39 yuan. At present, the share price corresponds to 76.58 times PE in 22 years. We are optimistic about the company’s long-term focus on R & D and innovation, and constantly improve the skin care product category matrix. The strong growth of sub brands is expected to bring the second performance growth curve to the company, and the long-term competitiveness is expected to be further improved to maintain the “buy” rating.
Risk factors: industry policy change risk, product R & D and registration risk, intensified market competition, product safety risk, etc
