\u3000\u30 Shaanxi Zhongtian Rocket Technology Co.Ltd(003009) 57 Yunnan Botanee Bio-Technology Group Co.Ltd(300957) )
Key investment points
The company issued the annual report of 2021, and the profit was in line with expectations. ① In 2021, the revenue was 4.022 billion / yoy + 52.57%, the net profit attributable to the parent was 863 million / yoy + 58.77%, and the net profit attributable to the parent after deduction was 813 million / yoy + 58.59%. The performance growth rate was in line with the expectation, and the growth rate fell below the upper edge of the performance forecast center; ② In a single quarter, 2021q4 achieved a revenue of 1.91 billion / yoy + 56.66%, a net profit attributable to the parent of 508 million / yoy + 54.67%, and a net profit attributable to the parent of 480 million / yoy + 61.34% after deduction. The performance growth rate was in line with expectations.
The overall profitability remained stable, and the R & D side continued to invest to build the whole chain. In 2021, the gross profit margin is 76.01% / – 0.25% PCTs, and the net profit attributable to the parent company is 21.45% / + 0.84% PCTs; In a single quarter, the gross profit margin of 2021q4 is 75.01% / -0.57% PCTs, and the net profit margin attributable to the parent company is 26.58% / -0.34% PCTs. In 2021, the promotion of double eleven was strong, which disturbed the level of Q4 gross profit margin. The double eleven Winona brand ranked sixth in the beauty category and became the only domestic brand to enter the top ten in the beauty category. In terms of expenses: (1) the sales expense rate is 41.79% / -0.21pcts. The company publicizes a number of star spokesmen and continues to increase brand image publicity expenses and e-commerce channel expenses, which basically matches the income scale. Winona baby brand promotion and the new aoxmed brand are expected to have limited room for the decline of sales expense rate in the medium and short term; (2) The management fee rate is 6.10% / -0.29pcts; (3) The R & D expense rate is 2.81% / + 0.41pcts. The company has arranged multiple R & D projects such as efficacy cosmetics, characteristic plants, functional foods and medical devices, cooperated with Yunnan Pharmaceutical Research Institute and other institutions to establish a characteristic plant extraction laboratory, established “basic theoretical research – Application Development – industrialization common key technology development – Industrial incubation – market”, and continued to launch enabling products at the R & D end.
Channel side: Alibaba platform is the basic disk, with continuous high growth online; Offline OTC and Watson multidimensional force. The revenue from online channels is 3.3 billion yuan / yoy + 51.94%; Offline channels achieved revenue of 708 million / yoy + 57.76%, and the revenue contribution increased slightly to 17.60%. (1) Traditional online channels: tmall serves as the basic channel and has in-depth cooperation with the head anchor. The performance of double 11 in 2021 was brilliant. Alibaba platform achieved revenue of 1.818 billion / yoy + 45.56%, continuing the high growth trend. The rise of jd.com, vipshop and other channels made up for the decline of tmall traffic dividend. The proportion of Alibaba revenue decreased from 47.66% in 2020 to 45.36%; Tiktok (2) online emerging channels: tiktok channel is developing rapidly. Flying melon data shows that Winona has been ranked 20 in the US cosmetics class for many times. The company’s self broadcasting structure is reasonable, and is expected to become an important engine for online growth. (3) Self built platform: 853200 to 2983500 new registered users, with an average customer unit price of 1112.5 yuan and an income of 450 million / yoy + 29.46%, following the strategy of “public fish farming and private fishing”; (4) Offline collection stores: by the end of 2021, a total of 4000 Watson stores had settled in and actively participated in the double 11 activities, increasing the coverage depth of channels in the second half of the year; (5) Offline OTC: covering more than 20000 in total, and cooperating with Yunnan Jianzhijia Health-Chain Co.Ltd(605266) to make full use of the member asset pool, with high channel barriers; (6) Other channels: the first counter of the national department store appeared in Hangzhou Yintai department store. The company plans to open direct stores in the shopping malls of core cities to increase image publicity, and the opening of Shanghai Lingkong experience center marks the company’s initial layout in the field of shengmei. We expect to lay out OTC + Watson channel + offline counters in breadth and depth, and the proportion of offline channels is expected to increase to a certain extent.
Brand side: the baby brand matrix is perfect, and the anti-aging new brand is waiting to be launched. (1) The official operation of Winona baby’s tmall flagship store in 2021 ranked the top 20 of the year, and the breakdown category ranked the top 10, with a year-on-year growth of more than 10 times. The popular large single product “Shurun nourishing cream” ranked the top 3 in the industry. In the future, we will continue to promote product refinement and age stratification, and comprehensively upgrade in the fields of product matrix, R & D formula and so on. On the channel side, Wuxi Online Offline Communication Information Technology Co.Ltd(300959) synchronous promotion will be carried out, and vertical channels such as mother and baby stores and confinement clubs will be launched to increase the layout of tmall and open JD flagship stores to improve the online volume. It is expected that better performance will be welcomed in 2022. (2) Aoxmed, a new anti-aging brand, has a high-end layout. At present, three products have been put on record and are expected to be listed in May 22. It is expected to launch offline medical and beauty institutions, realize large-scale growth through online after maturity, and bind with the founding team in terms of ownership structure. The company and Sequoia set up a private equity fund in Hainan to carry out brand acquisition, M & A and equity investment to expand new brands, benchmark overseas giants into platform companies and promote the layout of multi brand matrix.
Investment suggestion: the rise of the ingredient party promotes the high growth of functional skin care products, the new regulations of cosmetics raise the industry threshold, and it is more difficult for small and medium-sized brands to break the circle. Yunnan Botanee Bio-Technology Group Co.Ltd(300957) continues to consolidate its leading position in channels and products, and derives from the main brand Winona to form a multi brand matrix, so as to realize the sharing and empowerment between China and Taiwan. Based on the company’s outstanding performance in 21q4, we expect the revenue of 22-24 years to be 5.57 billion / 7.4 billion / 9.51 billion, and the net profit attributable to the parent company to be 1.21 billion / 1.68 billion / 2.2 billion. The closing price corresponding to PE on March 22 was 55x / 40x / 30x respectively, maintaining the “buy” rating.
Risk tip: the decline risk of industry prosperity; The risk of intensified industry competition; Brand concentration risk; The incubation of new brands is less than the expected risk; Risk of reduction of major shareholders.
