\u3000\u3 Shengda Resources Co.Ltd(000603) 605 Proya Cosmetics Co.Ltd(603605) )
Matters:
The company issued the announcement of performance pre increase: the company expects to realize the net profit attributable to the shareholders of the listed company in the first quarter of 2022, ranging from 148 million yuan to 159 million yuan, with a year-on-year increase of 35% to 45%, and the revenue is expected to increase by 30% to 40% compared with the same period of the previous year.
Guoxin retail view: as a leading brand of domestic cosmetics, under the changes of industry online traffic and regulatory policies last year, the company prospectively increased the creation of star single products and the layout of new brands. At the same time, it actively grasped the incremental opportunities of the new e-commerce platform and achieved stable and rapid development of performance. In this year’s trend of continued differentiation in the industry, the company continued to achieve growth much higher than the industry average in Q1 through the accumulation of early layout. Throughout the year, the company will continue to promote the “6 n” strategy (new consumption, new marketing, new organization, new mechanism, new technology and new intelligent manufacturing), and promote the continuous and steady high growth of annual performance. Specifically, at the end of the product, the company will continue to promote the strategy of large single product, strengthen and upgrade the mature single product series, such as double anti elite and Ruby essence, increase the derivative layout of the new product list of last year, and actively prepare new products such as whitening and so on, so as to push the brand continuous volume and price rise. Channel end companies are adapting to the trend of online traffic change. While the traditional Tmall platform continues to maintain strong growth, it relies on the first mover advantage of the earlier layout of the tiktok platform to continue contributing to effective growth. On the brand side, the company actively promotes multi brand construction. Caitang’s brand performance continues to be excellent and is gradually growing into the second growth pole of the company. We temporarily maintain the company’s profit forecast for 21-23 years, with EPS of 2.86/3.47/4.31 yuan / share, and the current share price corresponding to PE is 63 / 52 / 42 times, maintaining the “buy” rating.
Comments:
In 2022, the net profit attributable to the parent company in Q1 increased steadily, which is expected to be + 35% ~ 45% year-on-year
According to the company’s announcement, in the first quarter of 2022, the company is expected to realize a net profit attributable to the shareholders of the listed company of 148 million yuan to 159 million yuan, with a year-on-year increase of 35% to 45%, and the revenue is expected to increase by 30% to 40% compared with the same period of the previous year. Previously, the company has announced the operating data from January to February of 22 years. The announcement shows that from January to February of 2022, the company will achieve a revenue growth of about 30%; The net profit attributable to the parent company increased by about 35%; Therefore, compared with the previous 1-2 months, the growth performance of Q1 has improved in terms of revenue and profit.
We expect that although the offline channels are expected to be under pressure from the rebound of the epidemic in various regions in March, the company’s performance during the “March 8” e-commerce promotion Festival is extremely bright, which promotes the continuous and accelerated growth of the revenue end. At the same time, under the “big single product” strategy, the company expects to further increase the proportion of overall high unit price products, which promotes the increase of gross profit margin. With effective marketing strategy, the company’s overall profitability will be further optimized.
The “6 n” strategy has been continuously promoted, the online channels have performed brilliantly, and the effect of product upgrading has appeared
In 2022, the company continued to promote the “6 n” strategy (new consumption, new marketing, new organization, new mechanism, new technology and new intelligent manufacturing). The channel side actively responds to the changing situation of traffic and realizes the continuous and beautiful performance of online platforms; The product side accelerates the shaping of star single products with the support of R & D; The marketing side actively helps to break the brand circle and strengthen the construction of differentiated brand mind. Specifically:
1. The channel layout was accelerated and advanced, and the performance of e-commerce continued to be beautiful in March
On the channel side, while tmall’s basic market achieved steady and high growth, the company actively launched a new platform layout, thus realizing the overall rapid growth of e-commerce channels. Especially during the “March 8” online promotion in March, the company’s main brand Proya Cosmetics Co.Ltd(603605) , tmall platform Gmv increased by 200% over the same period, and the brand was ranked among the top 5 in tmall beauty industry and the top 1 in domestic brands; Tiktok tiktok GMV grew by 100%+ compared with the previous year, and the official self broadcast was ranked TOP1 in the blue V list of the beautiful beauty makeup. The social interaction aspect of 1000 master’s multi platform strong grass planting has 450 million interactive dissemination.
2. During product upgrading, the proportion of large single products continues to increase
The performance of the company’s star products has continued to shine since last year, and has gradually become an important support for the growth of the company’s performance, volume and price. In 2021, the cumulative revenue of Q3 large single products accounted for about 20% + of Proya Cosmetics Co.Ltd(603605) main brands, and the proportion of large single products reached 70% + during the double 11 period last year. Supported by the continuous improvement of large single products with high unit price, the average selling price of the company’s products continued to increase.
In this year’s “38” promotion period, the company set up a group of “early C night A” cumulative sales volume of 78 thousand + pieces, double resistance essence cumulative sales 160 thousand + branch, ruby essence cumulative sales 39 thousand + branch, source power essence cumulative sales 85 thousand + branch, feather sense sunscreen cumulative sales volume 280 thousand + branch. On the whole, the upgrading effect of the company’s products continues to show, which is expected to gradually seize the medium and high-end market and further improve the customer unit price.
3. The multi brand layout has achieved initial results, and the second brand Caitang has performed brilliantly
The company has been actively distributing many brands. Last year, the color cosmetics brand tiktok’s three quarter revenue increased by 185% to 164 million yuan, and its performance was excellent. During the “38” period this year, the sales of GMV Tmall platform increased by 400%+ compared with last year, and sales of the platform sales increased by 1800%. Throughout the year, Caitang is expected to gradually become the second growth curve contributing to the growth of the company’s revenue. In addition, the company has also laid out a number of new brands, covering different segments of beauty tracks: including or (off & relax) for medium and high-end washing and care; Yuefuti brand, which is specially aimed at the skin care and washing needs of young consumers; And Kerui skin brand focusing on high-efficiency skin care. Thus, it is expected to realize the medium and long-term iterative growth of performance through multi brand layout in the future.
Investment suggestion: the effect of large single product strategy is further highlighted. The “6 n” strategy continues to promote the growth of leading enterprises and maintain the “buy” rating
Overall, as a leading brand of domestic cosmetics, the company prospectively increased the creation of star single products and the layout of new brands under the changes of industry online traffic and regulatory policies last year. At the same time, it actively grasped the incremental opportunities of the new e-commerce platform and achieved stable and rapid development of performance. In this year’s trend of continued differentiation in the industry, the company continued to achieve growth much higher than the industry average in Q1 through the accumulation of early layout. Throughout the year, the company will continue to promote the “6 n” strategy (new consumption, new marketing, new organization, new mechanism, new technology and new intelligent manufacturing), and promote the continuous and steady high growth of annual performance. Specifically, at the end of the product, the company will continue to promote the strategy of large single product, strengthen and upgrade the mature single product series, such as double anti elite and Ruby essence, increase the derivative layout of the new product list of last year, and actively prepare new products such as whitening and so on, so as to push the brand continuous volume and price rise. Channel end companies are adapting to the trend of online traffic change. While the traditional Tmall platform continues to maintain strong growth, it relies on the first mover advantage of the earlier layout of the tiktok platform to continue contributing to effective growth. On the brand side, the company actively promotes multi brand construction. Caitang’s brand performance continues to be excellent and is gradually growing into the second growth pole of the company. We temporarily maintain the company’s profit forecast for 21-23 years, with EPS of 2.86/3.47/4.31 yuan / share, and the current share price corresponding to PE is 63 / 52 / 42 times, maintaining the “buy” rating.
Risk tips
The risk of changes in consumer demand, the risk of changes in relevant policies in the cosmetics industry, the risk of decline in e-commerce growth, and the risk that the launch of new products is less than expected
