\u3000\u3 Shengda Resources Co.Ltd(000603) 605 Proya Cosmetics Co.Ltd(603605) )
Performance overview: the growth rate of net profit attributable to parent company in 22q1 was 35% – 45%, exceeding market expectations
The first quarter performance forecast exceeded expectations: 22q1 revenue was 1.177-1.268 billion yuan, a year-on-year increase of 30% – 40%. The net profit attributable to the parent company was 148159 million yuan, with a year-on-year increase of 35% – 45%. The original expectation was to continue the previously disclosed operation from January to February 2022, with a revenue growth rate of about 30% and a net profit growth rate of about 35%. The above growth rate is the lower limit of the performance forecast, so it is judged that the performance is expected to exceed expectations.
Section 3.8 review of achievements: Double growth of brand exposure and word-of-mouth. The main brand Proya Cosmetics Co.Ltd(603605) Tmall official flag GMV grew 200%+, jitter GMV grew 100%+, Tmall international cosmetics TOP1, Jingdong products skin care TOP1, popular products C C A/ A/ double cumulative anti tiktok cumulative sales volume of over 10000 pieces, planning “Lion Dance Girl” theme film fever 120 million; The sub brand Caitang tmall official flag Gmv increased by 400% year-on-year.
Performance driven: increase customer unit price of new products + expand customer base of new channels + expand categories of new brands
Interpretation of the core reasons why the performance exceeded expectations: 1) the success of the large single product strategy extended the product life cycle and significantly increased the unit price of consumers. With C A as the representative, the largest single product hatched successfully. According to the reptile data, we judged that the proportion of the essence of Tmall channel increased, and drove the unit price from 100 yuan to 200 yuan + last year. 2) actively tiktok channels bring new increments. In early 2021, tiktok, Proya Cosmetics Co.Ltd(603605) , was the first representative of the “smell sensitive” Chinese product, and was the first to be stationed in the jute. According to the reptile data, we tiktok Proya Cosmetics Co.Ltd(603605) in 2021, accounting for 10%+, and the ratio is expected to increase in 2022. 3) New brands accelerate incubation. Caitang, a cutting-edge cosmetics brand, is growing rapidly. Its revenue is expected to exceed 200 million yuan in 2021 and is still expected to grow rapidly in 2022.
Future outlook: strengthening Cream Eye Cream + focusing online direct channel + actively incubating new brand
1) products: through the cream, eye cream, face cream and mask, etc., continue to seize the middle end market. Large single product category expansion, single product upgrade, new product launch, including early C night A, whitening, sunscreen, throwing, mask and so on.
2) channel: focus tiktok, especially Tmall, jowin, Jingdong and other direct channel.
3) sub brand: Caitang + or + yuefuti + Kerui skin. ① Caitang: focus on the base makeup, strengthen the categories such as pre makeup, base makeup, fixed makeup and high gloss repair, strengthen KOL cooperation and seize the market share of mid-range makeup. ② Or (offrelax): it aims at medium and high-end washing and care, with a price range of 150200 yuan. Through cooperation with Japanese Chinese scientists, it completes R & D, production and sales in Japan, and then radiates back to the Chinese market. The brand expects to achieve a breakthrough of 0-1 this year. ③ Yuefuti: at the initial stage, it focused on the oil skin consumers and served the young generation of Chinese consumers through targeted product development of young oil skin. ④ Kerui skin: focus on high-efficiency skin care brands, gather the latest scientific and technological capabilities, and serve consumers with medium and high-end functions.
Profit forecast and valuation
The company continues to promote the strategy of large single products with remarkable results, superimposes the expansion of e-commerce channels, enriches strong main brands and incubates private brands, and expands the brand matrix, which is expected to promote the continuous growth of performance. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be RMB 600 million, RMB 790 million and RMB 980 million respectively, with a year-on-year increase of 27%, 31% and 24%, corresponding to pe60, 46 and 37 times, maintaining the overweight rating.
Risk tips
The growth rate of cosmetics industry did not meet expectations; The competition of downstream brands is fierce, and the competitive pressure of the company is increasing.
