\u3000\u30 Shaanxi Zhongtian Rocket Technology Co.Ltd(003009) 57 Yunnan Botanee Bio-Technology Group Co.Ltd(300957) )
[key points of investment]
The company released the annual report of 2021, and the growth rate of revenue and profit exceeded 50%. In 2021, the company achieved a revenue of 4.022 billion yuan (+ 52.6%), a net profit attributable to the parent company of 863 million yuan (+ 58.8%), and a net profit not attributable to the parent company of 813 million yuan (+ 58.6%), which is above the median value of the performance forecast. The revenue of single Q4 was 1.91 billion yuan (+ 56.7%), and the net profit attributable to the parent company was 508 million yuan (+ 54.7%). The bright performance during the double 11 promotion period led to the high growth of Q4. In 2021, the sales / management expense ratio increased from -0.2pct / – 0.3pct to 41.79% / 6.01% year-on-year, and the scale effect continued to appear. With the rapid growth of product sales revenue, the net operating cash flow at the end of 2021 increased by + 167.4% year-on-year to RMB 1.153 billion.
The leading position of the main brand was further consolidated, and the burst models broke the circle and blossomed at many points. In terms of products, in 2021, the revenue of skin care products / medical devices / make-up reached RMB 3.629/3.26/53 billion respectively, with a year-on-year revenue of 53.8% / 67.1% / – 18.8%, accounting for 90.2% / 8.1% / 1.3%. “Winona” ranks first in the market of dermatological skin care products, with a market share of + 2pct and a consolidated brand advantage. In addition to the excellent performance of special cream, the company successfully built second large single product sunscreen lotion, toner and mask market ranking rose to fourth and seventh respectively. The sub brand “Winona baby”, officially operated in 2021, entered the top 20 in the annual ranking, and the double 11 baby skin care ranked the top 10, becoming the dark horse in the industry.
Global channels have maintained high growth, and social and professional channels have made significant efforts. According to different channels, in 2021, the revenue of online self operation / online distribution / offline distribution reached RMB 2.532/7.67/706 billion respectively, with a year-on-year increase of + 52.7% / + 49.4% / + 58.3%, accounting for 63.0% / 19.1% / 17.6%. 1) Online: Alibaba’s revenue increased by 45.6% year-on-year to RMB 1.818 billion, contributing a solid basic market. Winona ranked No. 6 in tmall’s double 11 beauty protection category (the only domestic product in the top 10); JD’s annual growth rate exceeded 30%, and double 11 beauty brands ranked seventh; Vipshop double 11 beauty makeup ranks top 6; Tiktok double 11 beauty makeup first, through high-frequency self seeding + waist volume + Super head explosion, multi platform continuous force. 2) Offline: cooperation with Shuyu, Dashenlin Pharmaceutical Group Co.Ltd(603233) , Yifeng, etc. will be added. By the end of 2021, it will cover 20000 + OTC pharmacies, settle in 4000 + Watsons stores, and actively layout offline image stores.
R & D investment has been increased, new categories have been extended, and the ecological territory has been expanded. In 2021, the R & D expenses increased by 78.5% to 113 million yuan year-on-year, and the R & D expense rate increased by + 0.4pct to 2.81% year-on-year; R & D personnel increased from + 126.9% to 236, accounting for + 4.5pct to 9.92% year-on-year. R & D strength supports the company’s continued vitality. In 2021, 40 + new products were successfully listed, and 80 patents were authorized at the end of the year, including 22 invention patents. Aoxmed, a new high-end anti-aging brand, is expected to be launched in Q2 in 2022, which will continue the path of building professional product strength and is expected to contribute to a new growth pole. Relying on Yunnan characteristic plant extraction laboratory, focus on the research and development of functional cosmetics, functional foods and drugs, and build a skin health ecology.
[investment suggestion]
The company focuses on the track of efficacy skin care products, further improves the market share of main brands, has excellent omni-channel control and response speed, and continuously strengthens the strength of professional products. Based on the excellent performance of online new channels and offline OTC channels, we slightly raised our forecast of the company’s operating revenue and net profit attributable to the parent company from 2022 to 2023. It is estimated that the company’s operating revenue will be 5.527/72.72/9.438 billion yuan from 2022 to 2024, with a year-on-year growth rate of 37.41% / 31.57% / 29.79% respectively; The net profit attributable to the parent company was 1.249/1.677/2.174 billion yuan respectively, with a year-on-year growth rate of 44.79% / 34.25% / 29.63% respectively; EPS is 2.95/3.96/5.13 yuan / share respectively, and the corresponding PE is 57 / 43 / 33 times respectively, maintaining the “buy” rating.
[risk tips]
The performance of the new brand is less than expected;
Stricter regulation of industrial policies;
Intensified brand competition in the same industry;
The ban on restricted shares was lifted.
