Market Review
Last week (03.28-04.01), the CSI 300 index rose 2.43%. According to the statistics of the key weight companies selected by us (listed in the market of 1.1 sector in detail), the beauty care industry portfolio rose 1.18%, of which the medical beauty / cosmetics / personal care products rose 2.43% / 0.28% / 1.07% respectively.
Since the beginning of the year, the CSI 300 index has fallen by 13.44%. According to the statistics of the key weight companies selected by us (listed in the market of 1.1 sector in detail), the beauty care industry portfolio has fallen by 20.32%, of which the medical beauty / cosmetics / personal care products have fallen by 21.25% / 18.20% / 21.50% respectively.
In terms of valuation, as of April 1, the price earnings ratio (TTM) of beauty care (801980. SI) was about 45.90x, which was at the quantile value of 35.29% in two years.
The food and drug administration has made it clear that “Shuiguang needle” and “RF instrument” are included in the supervision of class III instruments
The FDA made it clear that “Shuiguang needle” and “RF instrument” were officially included in the supervision of class III instruments, which is an important regulatory measure expected by the industry. In April and November 2021, the medical device standard management center of the State Drug Administration successively issued a notice on Soliciting Opinions on the guiding principles for the classification and definition of RF Beauty Products (Draft for comments) and a notice on soliciting the classification catalogue of medical devices (adjustment opinions), and planned to adjust the supervision level of “RF instrument” and “Shuiguang needle”. By March 30, 2022, with the formal adjustment of the classification catalogue of medical devices, the above medical and American devices will be officially included in the supervision of class III devices.
The certification of Shuiguang needle is imminent. The future pattern change still depends on the strength of supervision and law enforcement and the R & D certification ability of pharmaceutical machinery manufacturers. Compared with the two-year buffer period of RF instruments, the relevant provisions of Shuiguang needle have been implemented. However, according to the strict requirements of the new standard, the products with class III medical device qualification in China have not obtained the corresponding indications, so they are still used in violation of regulations. We believe that the change of Shuiguang needle market pattern may be strongly related to the strategy and strength of supervision and law enforcement. Supervision and law enforcement may gradually eliminate the non-conforming products with makeup brand, special makeup, class I equipment, class II equipment and three types of equipment but mismatched indications. For medical equipment manufacturers, accelerating the certification of Shuiguang needle products has become a major task.
In the context of consumption upgrading and the prosperity of beauty culture, the leading brands of compliant medical and beauty medicine and cosmetics give priority to benefit and have good growth certainty. At present, the valuation of the sector is reasonable and continues to be optimistic about Imeik Technology Development Co.Ltd(300896) , Yunnan Botanee Bio-Technology Group Co.Ltd(300957) , and the relevant targets include Bloomage Biotechnology Corporation Limited(688363) , Shanghai Haohai Biological Technology Co.Ltd(688366) , Furui medical technology, Proya Cosmetics Co.Ltd(603605) , etc.
Key industry trends
The food and drug administration has made it clear that “water light needle”, “RF instrument” and “facial implant line” are included in the supervision of class III devices; “Article 106 of cosmetics” was published to clarify the production quality management norms of cosmetics.
Announcement of key companies
Sihuan pharmaceutical plans to spin off xuanzhu biotechnology shares and be listed independently on the science and Innovation Board of Shanghai Stock Exchange Proya Cosmetics Co.Ltd(603605) it is estimated that the profit of 2022q1 will be 148 million to 159 million yuan Shanghai Haohai Biological Technology Co.Ltd(688366) 2021 annual net profit of about 352 million yuan, an increase of 53.1%; In 2021, Sihuan pharmaceutical’s medical and American business revenue was 399 million yuan, a year-on-year increase of 1383.3%; China Olympic Park has officially opened the prelude to the reorganization of war investment, and the state-owned assets have been adjusted; Ruili Yimei’s first loss in 2021 was 17.691 million yuan, from profit to loss Gradually set foot in the layout of medical and beauty industries; Ruili Yimei changed from profit to loss to 17.691 million yuan in 2021; Yisi health has newly established a flagship center of comprehensive medical services and a high-end imaging center; Huaxizi was introduced into CFO Winner Medical Co.Ltd(300888) has cooperated with some boutique hotels to produce customized cotton towels and other products Huadong Medicine Co.Ltd(000963) controlling shareholders pledged 57.36 million shares and released 90.45 million shares.
Risk tips
Risk of changes in industrial policies; The terminal demand is lower than expected.
