Looking back on the cosmetics medical beauty industry and companies: the industry is increasingly divided, and the strong is always strong. The current valuation of the sector has high room for improvement. In the past 21 years, the retail sales of cosmetics above the quota increased by 14% year-on-year, higher than the social zero of 1.2pct Affected by the high base in the same period, the cumulative retail sales of cosmetics above the quota increased by 7% year-on-year from January to February of 22 years, which was 2.1pct lower than the zero growth rate of the society From January to February 2019 to January to February 2022, the total retail sales of goods above designated size increased by 4.1% in a compound manner, of which the total retail sales of cosmetics above designated size increased by 11%, and the industry continued to maintain a high outlook. The industry is increasingly divided, the Matthew effect is prominent, and the leading cosmetics companies have excellent business performance in 1-2 menstrual periods, laying the foundation for their Q1 growth. Since the beginning of the year, the beauty care industry has fallen by 17.5%, ranking in the lower reaches of the whole industry and the middle reaches of the consumer industry. Since the beginning of the year, the cumulative rise and fall of individual stocks in the cosmetics medical and beauty sector has been – 32.2% to 10.1%. At present, the PE (TTM) of cosmetics medical beauty sector is at the 26th percentile since 2019, at a historical low, and the valuation of the sector has high room for improvement.
In the face of new policy variables, the cosmetics industry has entered the era of regulation 2.0, and the competitive advantage of leading companies has been highlighted. China is the second largest cosmetics market in the world. The growth rate of the industry is higher than the global average, and there is much room for the improvement of per capita consumption. The industry continues to maintain a high outlook. On January 1, 2001, the new regulations on cosmetics were implemented, and the industry entered the era of supervision 2.0. On the whole, the new regulations are stricter, encouraging R & D and standardizing the production and operation of children’s cosmetics: 1) stricter compliance:
The new regulations raise the requirements for registration / filing, increase the cycle and cost of new product launch, clarify the subject of responsibility and increase the punishment for violations. 2) Encourage research and development: the new regulations include new raw materials into the scope of registration / filing, encourage the research and development of local characteristic plants, make the formula public, and guide the upgrading of ingredients and processes. 3) Regulate the production and operation of children’s cosmetics: limit the allowable declaration of infant and children’s cosmetics, require special labeling of children’s cosmetics and strengthen safety evaluation. Leading companies have high compliance, strong R & D strength and obvious competitive advantages under the new regulations.
International cosmetics recovered steadily, and the leading performance highlighted the industry trend. 1) The industry recovered steadily, and the six major companies achieved positive growth. In 2021, the global cosmetics industry recovered steadily, and the revenue of the six major cosmetics groups achieved positive growth, but their performance was different from that before the epidemic. Among them, L’Oreal and Estee Lauder successfully got out of the impact of the epidemic, while Shiseido and amore have not fully recovered from the epidemic. 2) Strong growth in Europe and the United States and strong performance in the Chinese market. The European and American markets were affected by the low base in the same period, with overall strength and high growth. The Asia Pacific region continued to grow, with strong performance in the Chinese market. 3) High end categories have become the main force of growth. L’Oreal, Shiseido, Estee Lauder, P & G and other companies’ high-end categories performed prominently and became the main force of growth. 4) Online and duty-free channels performed well. Cosmetics group actively expands online sales and continues to operate duty-free channels. Online and duty-free channels perform well.
The medical and beauty industry has a broad space, the penetration rate has been gradually improved and the industry has been standardized, so as to promote the steady growth of the industry. The 100 billion level Chinese medical and American market maintains a high-speed development of nearly 20% and the growth rate is faster than that of the world, but the market penetration is still low and the demand release space is large. From the perspective of the industrial chain, the pharmaceutical end has high barriers, high concentration and the strongest profitability. Midstream China has a relatively complete layout in injection products, rapid iteration of products, and continuous breakthroughs in surgical and optoelectronic medical and aesthetic products. The downstream medical beauty service end has fierce competition and low concentration. The chain medical beauty institutions are still running a horse and enclosure, and are expected to form a national leader in the future.
Investment analysis opinion: the prosperity of cosmetics medical and beauty sector continues, and we are firmly optimistic about the long-term development space. 1) Yimei: grasp the upstream link companies with high R & D barriers and strong profitability, and focus on the targets driven by large single products and wide product pipeline layout. Recommendations: Imeik Technology Development Co.Ltd(300896) , Bloomage Biotechnology Corporation Limited(688363) .
Medical and American institutions pay attention to the combination of surgical and non-surgical categories and national expansion potential. Recommendation: Lancy Co.Ltd(002612) . 2) Cosmetics: the brand side continues to differentiate, focusing on the functional skin care products with fast growth and high concentration in the industry, the domestic product leader with flexible organizational structure and strong product power. Recommendations: Yunnan Botanee Bio-Technology Group Co.Ltd(300957) , Proya Cosmetics Co.Ltd(603605) . Suggested attention: Shanghai Jahwa United Co.Ltd(600315) .
Risk tip: the uncertainty of macroeconomic environment is increasing, the change of consumption demand, the intensification of industry competition, and the consumption recovery is less than expected.
