\u3000\u3 Shengda Resources Co.Ltd(000603) 605 Proya Cosmetics Co.Ltd(603605) )
Key investment points
Event: the company issued the announcement on the pre increase of Q1 performance in 2022. The net profit attributable to the parent company in 2022q1 was 148 million yuan to 159 million yuan, with a year-on-year increase of 35% to 45%. The growth rate of net profit attributable to the parent company in 2022q1 was faster than the market’s expectation for the growth rate of performance in 2022.
According to the operating data from January to February 2022, the revenue increased by 30% and the net profit attributable to the parent increased by 35%. According to the operating data announcement issued by the company, the operating revenue from January to February 2022 was 630 million yuan, a year-on-year increase of 30%; The net profit attributable to the parent company was 60 million yuan, a year-on-year increase of 35%, and the performance was very bright at the beginning of the year.
The sales trend continued to improve, with Proya Cosmetics Co.Ltd(603605) and Caitang growing at a high speed online in section 3.8, and large single products contributing to the growth. (1) Proya Cosmetics Co.Ltd(603605) : “3.8 quarter” Tmall grew by more than 200% over the same period, and the number of trembling voice increased by over 100% over the same period. Sales volume entered the top five of Tmall beauty industry, ranking first among Tmall’s national makeup and Jingdong tiktok skin care rankings. The “3.8 quarter” Proya Cosmetics Co.Ltd(603605) exhibits good products including “early C evening A” suit, double anti essence, ruby essence, source essence, feather feel sunscreen and so on. In the tiktok official self broadcasting, Proya Cosmetics Co.Ltd(603605) ranks first in the tiktok blue V rankings. (2) Caitang: Caitang Gmv increased by more than 400% year-on-year, and sold for 40 minutes, breaking through the full-time Gmv of 3.8 last year. In terms of self broadcasting, Tang Yi, the founder of Caitang brand, flew to tmall store for self broadcasting, ranking first in the list of cutting-edge beauty makeup on that day; Tiktok self made second place in national makeup, 600 thousand times the total viewing volume, GMV increased 1800% over the same period last year. “The 3.8 quarter” the best products of the Tang Dynasty are the master dressing table, the master makeup front milk, the double high gloss, the concealer disk and so on.
With the help of the festival theme, characteristic marketing continues to make efforts to achieve emotional resonance with consumers. From the perspective of marketing, Proya Cosmetics Co.Ltd(603605) in the “3.8 Festival” marketing in the past two years has always been unique and conveyed a distinctive attitude. The “3.8 Festival” in 2020, together with China Women’s daily, launched a series of activities of “gender is not the boundary line, prejudice is”. This year’s “3.8” festival continued to deepen the theme. First, it planned the TVC theme short film of “lion awakening girl”, which conveyed the spirit of women’s struggle with the story of the whole women’s class of Xingtang Xingshi in Nanxing, Guangzhou; Two, we invited 7 brands of Babycare, dresscode, kidsland, Kwai Fu, MaiaActive, the US takeaway and the Swan to participate in the theme of “gender is not a boundary line, prejudice is the theme”. We convey the brand’s “sense of value” by focusing on women’s values and attitudes. The company’s success in the “3.8” marketing lies in realizing the emotional resonance with female consumers and promoting the bright sales performance in the “3.8”.
Profit forecast and investment rating: the company is a popular cosmetics group with flexible organization and leading efficiency in China, with leading multi platform layout and smooth implementation of large single product strategy. We maintain the parent net profit forecast of 583 / 718 / 889 million yuan from 2021 to 2023, with a year-on-year increase of 22.6% / 23.1% / 23.8%. The corresponding dynamic PE is 62 / 51 / 41 times, maintaining the “overweight” rating.
Risk warning: industry competition intensifies; The expansion of new brands is less than expected.
