Review of sector Market:
This week (3.21 ~ 3.25), Shenwan beauty care sector rose by + 1.57%, stronger than the market. Shanghai Composite Index and gem index were – 1.19% and – 2.80% respectively. Shenwan beauty care sector outperformed Shanghai Composite Index by 2.76 PCT and gem index by 4.37 PCT.
Wind medical beauty and cosmetics index: this week, the CSI 300 index was – 2.14%, and the wind medical beauty index was + 0.84%, outperforming the CSI 300 market by 2.98pct; The wind cosmetics index was + 3.94%, outperforming the CSI 300 market by 6.08pct.
Industry highlights:
The State Food and Drug Administration issued the annual report of the national cosmetics supervision and sampling inspection in 2021. In 2021, the National Drug Administration organized the sampling inspection of 11 types of cosmetics, including hair dyeing, shampoo and hair care, and color makeup. A total of 20245 batches of products were sampled, of which 19847 batches of products met the requirements. The qualified rate of the national cosmetics sampling inspection was 98.03%, and the overall qualified rate of 9 types of products, such as talcum powder, freckle / whitening cosmetics, reached more than 98%. (State Food and Drug Administration)
The State Food and Drug Administration of China has publicized the NMN（ β- Nicotinamide mononucleotide) can be used as a new raw material for cosmetics. The filing company shows that Yuyao lefosbon Health Technology Co., Ltd. is a wholly-owned subsidiary of “Bulao pharmaceutical” gene port. Studies have shown that NMN is beneficial to protect the heart, prevent diabetes, Alzheimer’s disease, obesity, and has anti-aging effect. (State Food and Drug Administration)
IResearch consulting released a quick view of the Investment Research Report on China’s beauty and skin care industry: the overall size of China’s beauty and skin care industry is about 500 billion, including basic skin care and personal care. ① Driven by the diversification and deepening of channels, consumption upgrading and other factors, China’s beauty track has maintained a steady development trend. ② Driven by the expansion of consumer groups, the entry of new players and the transformation of existing players to medium and high-end, the growth of China’s facial skin care track is relatively stable. ③ Functional skin care track will still benefit from the continuous expansion of demand groups and the improvement of repurchase rate in the future. ④ The medical dressing track continues to benefit from the improvement of product penetration and repurchase rate. ⑤ The new beauty collection store benefits from the entry of players, but new players will form a strong competition with traditional players. (iResearch consulting)
Vipshop released the beauty list in March: Sales of sunscreen cosmetics rose sharply. Vipshop data show that in March this year, the search volume of “sunscreen” on the platform increased by 93% month on month, and the overall sales volume of sunscreen cosmetics increased by nearly twice month on month. Among them, the growth rate of men’s purchase of sunscreen cosmetics was twice that of women, and from post-95 to post-70, the purchase of men of all ages increased by double digits year-on-year. (lianshang.com)
Company announcement:
Proya Cosmetics Co.Ltd(603605) : the announcement of pre increase of performance in the first quarter of 2022 is issued, and the net profit attributable to the parent company is expected to be 148 million yuan to 159 million yuan, with a year-on-year increase of 35% to 45%.
Yunnan Botanee Bio-Technology Group Co.Ltd(300957) : the annual report of 2021 was released. In 2021, the company achieved revenue of 4.02 billion yuan (YoY + 53%), net profit attributable to parent company of 860 million yuan (YoY + 59%), net profit deducted from non attributable to parent company of 810 million yuan (YoY + 59%), and basic earnings per share of 2.12 yuan. In Q4 of 2021, the revenue was 1.91 billion yuan, the net profit attributable to the parent was 510 million yuan, and the net profit not attributable to the parent was 480 million yuan.
Jahen Household Products Co.Ltd(300955) : the announcement that the wholly-owned subsidiary of the company has obtained the hygiene license of disinfection product production enterprise was issued. Huzhou Jiaheng Industrial Co., Ltd., a wholly-owned subsidiary of the company, recently received the hygiene license of disinfection product production enterprise issued by Zhejiang Health Commission, which is conducive to the company’s expansion of production capacity of relevant products and maintaining stable production capacity and product quality; It is conducive to the sustainable development of the company and the implementation of the company’s strategic layout.
Huadong Medicine Co.Ltd(000963) : the announcement on the progress of clinical trials in the United States of the cooperative R & D project of the wholly-owned subsidiary was issued. The wholly-owned subsidiary, immunogen, a partner in East China and the United States, announced the results of the clinical trial of mirvetuximab, a new class 1 biological product for the treatment of ovarian cancer. The trial has reached the main research end point, which is on folate receptor α Highly expressed platinum resistant ovarian cancer has clinically significant antitumor activity, consistent safety and good tolerance. It is expected to submit mirvetuximab’s biological product license application in the United States this month.
Investment advice
(1) cosmetics industry: under the background of stricter supervision of the cosmetics industry, strong products + strong brands have become an important way for brands to break the circle, and continue to pay attention to head cosmetics brands with strong R & D ability and brand strength. In addition, the safety and importance of cosmetic raw materials have been improved, and attention has been paid to high-quality upstream raw material companies. Attention: [ Yunnan Botanee Bio-Technology Group Co.Ltd(300957) ] subdivide the leader in the field of sensitive muscle skin care; [ Proya Cosmetics Co.Ltd(603605) ] diversified high-quality brands; [ Shanghai Jahwa United Co.Ltd(600315) ] multi category development and continuous innovation to create new items; [ Guangdong Marubi Biotechnology Co.Ltd(603983) ] focuses on medium and high-end, with rich marketing and distribution channels; [ Syoung Group Co.Ltd(300740) ] strong operation capacity and gradual improvement of category structure; [ Cabio Biotech (Wuhan) Co.Ltd(688089) ] large amount of Ara and DHA, SA approved new raw materials for cosmetics.
(2) medical beauty industry: the demand side of the medical beauty industry continues to expand, the supply side products are more diversified, and the policy side strengthens the supervision of medical beauty institutions and medical beauty products. We are optimistic about upstream medical and American enterprises with class III medical device certificate and perfect product matrix layout and downstream medical institutions with long-term standardized operation. Attention: [ Bloomage Biotechnology Corporation Limited(688363) ] local hyaluronic acid raw material leader; [ Imeik Technology Development Co.Ltd(300896) ] Tongyan needle is heavily listed, and differentiation meets higher demand; [ Huadong Medicine Co.Ltd(000963) ] overall layout of medical beauty business; [ Shanghai Haohai Biological Technology Co.Ltd(688366) ] integration of R & D, production and sales; [Sihuan medicine] botulinum toxin + double antibody go hand in hand; Pay attention to Lancy Co.Ltd(002612) etc. of the layout of downstream medical and aesthetic institutions.
Risk tips
The risk of intensified industry competition; Uncertainty of industrial regulatory policies; Macroeconomic fluctuations, etc.
