\u3000\u30 Shaanxi Zhongtian Rocket Technology Co.Ltd(003009) 57 Yunnan Botanee Bio-Technology Group Co.Ltd(300957) )
Event: the company released its annual report for 2021, and achieved an annual operating revenue of 4.022 billion yuan, a year-on-year increase of + 52.57%; The net profit attributable to the parent company was 863 million yuan, a year-on-year increase of + 58.77%.
Comments:
All channels have achieved rapid growth and brand influence has been further strengthened. In terms of channels, during the reporting period, the company’s online self operated / online distribution / offline self operated / offline distribution channels achieved operating revenue of RMB 25.32/7.67/0.02/706 million respectively, with year-on-year revenue of + 52.72% / + 49.42% / – 34.52% / + 58.27%, accounting for 63.19% / 19.15% / 0.04% / 17.62% respectively. Among them, the company achieved a revenue of RMB 1.818 billion on Alibaba platform, a year-on-year increase of + 45.56%, accounting for 45.36%. The company adheres to the offline based and online led sales model, increases the investment of online resources, further strengthens the popularity and influence of the core brand “Winona baby”, and the brand “Winona baby” also received a lot of attention during the “double 11” period. The average number of self operated stores in the year was + 1.02 million to + 1.87 million on a year-on-year basis.
Profitability improved slightly and cash flow was abundant. The company’s annual gross profit margin was – 0.24pct to 76.01% year-on-year, and the sales / management / R & D / financial expense rate was – 0.2 / + 0.12 / + 0.4 / – 0.22pct to 41.79% / 8.92% / 2.81% / – 0.25% year-on-year respectively. The slight increase in R & D expense rate was mainly due to the low R & D investment base under the influence of the epidemic last year. Under the comprehensive influence, the company’s annual net interest rate rose from + 0.86pct to 21.48% year-on-year. In 2021, the company’s net operating cash flow increased by + 167.44% year-on-year to RMB 1.153 billion, benefiting from the rapid growth of sales revenue and abundant cash flow.
Vigorously invest in R & D and innovation, and gradually improve the product matrix. The company attaches importance to R & D and innovation. It has a number of core technologies in the field of preparation of effective components of characteristic plant extracts and sensitive skin care. During the reporting period, it was awarded the provincial “Yunnan characteristic plant extraction laboratory”. In 2021, the company’s R & D expenses increased by 78.5% to 110 million yuan year-on-year, the number of R & D personnel increased to 236 compared with 104 last year, and the proportion of R & D personnel increased by 4.46 PCTs to 9.92%. Relying on a strong R & D system, the company has also achieved beautiful performance on the product side. While the advantages of the popular single product “special care cream + sunscreen” are stable, the company has improved the efficacy skin care matrix through efficacy expansion and category innovation to help the brand spiral growth.
Investment suggestion: the company is a leading enterprise of Dermatology grade skin care products in China. Its market share has expanded steadily and covered for the first time. It is rated as “buy”. Relying on R & D and innovation, the company continues to improve its product strength, and implements a multi brand plan through internal cultivation and extension acquisition. Its performance is expected to achieve high-quality growth. We expect the net profit attributable to the parent company in 22 / 23 / 24 to be RMB 1.18/15.9/2.09 billion, corresponding to 63 / 46 / 35 times of the current market value PE respectively. It is covered for the first time and given a “buy” rating.
Risk tip: the epidemic affects consumption, industry competition intensifies, and brand expansion is less than expected.
