\u3000\u3 Shengda Resources Co.Ltd(000603) 605 Proya Cosmetics Co.Ltd(603605) )
Key investment points
The company disclosed the announcement on the pre increase of 22q1 performance, and the growth rate exceeded the expectation: it is expected that the year-on-year growth rate of 22q1 revenue will be 30% – 40%, and the net profit attributable to the parent company in a single quarter will be 148159 million, with a corresponding year-on-year growth rate of 35% – 45%, and the operating performance exceeded the expectation; Previously, the company disclosed the operating data from January to February: the operating revenue was 630 million / yoy + 30%, and the net profit attributable to the parent was 60 million / yoy + 35%.
Product side: stick to the big single product strategy + broaden and improve the product matrix. From the “morning C night A” skin care trend to increase the source repair series to the “ABC” skin care formula, Tmall flagship store “38” promotion Festival, “early C night A” suit, double anti essence, ruby essence, source essence, feather sense sunscreen sales volume is 78 thousand pieces, sales volume 160 thousand, 39 thousand, 85 thousand, 280 thousand, reptile data show that “C C A” series 1-2 month sales accounted for more than 60% in Tmall. Compared with 2021, there has been a marked improvement in the whole year. We expect that the future product marketing upgrade + R & D iteration will promote “super large single product”. The company has launched blue bottles, orange bottles, two bowling and ampoule essences, and research and development can promote the improvement of large single product matrix.
Channel end: Tmall channel performance outstanding year, the channel is expected tiktok continues to increase. 1) Online traditional channels: tmall’s growth rate is considerable. Crawler data shows that under the background of the off-season consumption in January and February, Proya Cosmetics Co.Ltd(603605) year-on-year growth rate far exceeds the performance of the industry. During the March 8th event, the main brand Proya Cosmetics Co.Ltd(603605) in tmall’s flagship store Gmv increased by more than 200% year-on-year, ranking among the top 5 of the beauty industry and the top 1 of domestic beauty makeup. Proya Cosmetics Co.Ltd(603605) is expected to rely on the fan base to exceed the average growth rate of the industry. 2) online emerging channels: tiktok channel is expected to continue to grow. Tiktok tiktok tiktok tiktok, the company’s first layout, holds the new air gap. The data of flying melon show that the main brand Proya Cosmetics Co.Ltd(603605) 21 has been ranked ten times in the US cosmetics category for many times in the year of Proya Cosmetics Co.Ltd(603605) 21, and the “38” festival has been increasing by 100% over the same period. Tiktok has gradually made a strong effort to shake its voice channels, and based on the development of the vibrato and the brand’s first advantage, the 22 year’s channel is expected to continue to increase for 21 years. 3) Offline channels: annual sales are expected to remain stable. It is expected that the sales structure of department stores will be adjusted and the inventory of products will be stable in the next 22 years.
Brand side: new products + channel breakthrough, led by Caitang to boost the growth of the second curve. 1) Cai Tang: focus on the field of makeup, and gradually launch makeup products, foundation solution, repair sector and other products, relying on the founder of Tang Yi endorsement + product structure, multiple balances + marketing to open the volume, “38” Tmall official flagship store GMV grew by 400% over the same period, 40 minutes to break through the whole year, showing tiktok, with the Tmall, jitter and other multi platform continuous marketing efforts to promote the brand’s expected growth. 2) Other brands: or, as Proya Cosmetics Co.Ltd(603605) ‘s first attempt to enter the scalp care market, is expected to achieve a breakthrough of 0 to 1 this year; Kerui skin is a new high-efficacy skin care brand launched in 21 years. At present, it is still in the period of brand adjustment and is expected to break through and upgrade in the future.
Investment suggestions: management upgrading + product remodeling + grasping channel dividend + continuous marketing output, so as to promote the company’s overall high-quality development from channel to product and then to brand upgrading. We estimate that the net profit attributable to the parent company from 2021 to 2023 will be 599 million / 747 million / 927 million respectively, and the corresponding PE will be 60.6x / 48.6x / 39.1x respectively, maintaining the “buy” rating.
Risk tips: the decline risk of cosmetics prosperity, the risk of intensified cosmetics competition, the risk of sub brand incubation less than expected, and the promotion of new products less than expected.
