\u3000\u3 Shengda Resources Co.Ltd(000603) 605 Proya Cosmetics Co.Ltd(603605) )
Core view
Event: the company issued the announcement of pre increase of performance in the first quarter of 2022. It is estimated that the operating revenue in the first quarter of 2022 will increase by 30% – 40% year-on-year, reaching 1.177-1.268 billion yuan; The net profit attributable to the parent company was 148159 million yuan, with a year-on-year increase of 35% – 45%.
With the help of 38 promotion, 22q1 performance continued to increase and profitability improved. The company’s 22q1 profit growth exceeded revenue, and the company’s profitability was further improved. Specifically, from January to February 2022, the company achieved a revenue of 630 million yuan, a year-on-year increase of + 30%, and a net profit of 60 million yuan, a year-on-year increase of + 35%.
In March, driven by the promotion of March 8th Festival, the company’s revenue reached about 547638 million yuan, a year-on-year increase of + 30% – 52%, accounting for about 46% – 50% of 22q1 revenue; The net profit was about 90-100 million yuan, a year-on-year increase of + 34% – 51%, accounting for about 60% of the net profit in the first quarter. In the 38 tiktok promotion, all the brands of the company achieved excellent results, 1) Proya Cosmetics Co.Ltd(603605) : the main brand Proya Cosmetics Co.Ltd(603605) Tmall official flagship store turnover increased by more than 200% over the same period, and the turnover volume of the shaking platform increased by 100% over the same period. 2) tiktok: Tmall platform business volume increased by 400% over the same period, and it was awarded TOP list of many categories. The voice was self broadcast and was the national makeup TOP2, and sales increased 1800% year-on-year.
Continue to promote the “6 n” strategy and help the brand upgrade and development. The company focuses on shaping six abilities of new consumption, new marketing, new organization, new mechanism, new technology and new intelligent manufacturing, and creates, empowers and incubates “different” brands that meet the “different” needs of “different” consumers. 1) Products:
Focusing on enhancing product differentiation competitiveness, implementing the strategy of “large single product” and improving the large single product matrix, we have successfully launched several large single products, such as double resistant essence, ruby and so on. 2) Channel: online as the main line and offline in parallel, focusing on the refined operation of the channel. Online traffic flows from traditional electricity providers to short video and other emerging platforms. The company has increased its investment in new social networking tiktok, such as jitter, since 21H2. At present, the number of fans in Tmall’s official flagship store is 14 million 680 thousand, and the number of fans in tiktok shop is 3 million 744 thousand.
Profit forecast and investment suggestions: the company implements the “6 n” strategy to promote brand upgrading from the aspects of products, channels, R & D and organizational mechanism. With the help of efficient operation management and accurate market insight, the strategy of large single product has been continuously broken through; Grasp the flow bonus online and continue to increase sales in large quantities. We expect the net profit of the company in 21-23 years to be 600, 750 and 910 million yuan respectively, corresponding to 61, 49 and 40 times of PE, maintaining the “buy” rating.
Risk tip: the promotion of new products is not as expected; Intensified market competition; The epidemic has repeatedly affected offline sales
