Investment summary:
Talk every Monday: the rise of domestic beauty makeup
Event: the development of domestic beauty brands continues to improve. In recent years, with the continuous improvement of national income and quality of life, the scale of China’s cosmetics market has gradually expanded. Under the supervision of laws and regulations, Chinese cosmetics brands continue to transform and upgrade with the help of new media forces such as e-commerce, and develop for the better.
Under the beauty economy, cosmetics consumption continues to upgrade. In 2021, the economy outside China continued to recover, Chinese consumption gradually increased, and Chinese cosmetics sales grew well. According to the data of the National Bureau of statistics, the total retail sales of cosmetics increased year by year from 2011 to 2021, reaching 402.6 billion yuan in 2021, with a year-on-year growth rate of 18.4% and a compound growth rate of 12.62% in recent five years. The total amount of social zero fell during the epidemic in 2020, reaching 44 trillion yuan in 2021, with a year-on-year growth rate of 12.46% and a compound growth rate of 5.81% in the past five years. The growth rate of cosmetics retail sales is much higher than the growth rate of total social retail sales.
Driven by e-commerce, domestic beauty brands are constantly upgrading. With the development of mobile Internet and the change of consumers’ habits, Chinese and foreign cosmetics brands have successively settled on e-commerce platforms, and online sales have become the main sales channel of domestic cosmetics. China’s major cosmetics brands have also achieved effective growth in operating revenue through the layout of online platforms. Among them, Yunnan Botanee Bio-Technology Group Co.Ltd(300957) , Proya Cosmetics Co.Ltd(603605) , Syoung Group Co.Ltd(300740) are mainly online revenue, accounting for more than 80%.
Major domestic beauty brands have increased investment in e-commerce. With the continuous upgrading of cosmetics consumption and the layout of new channels of core domestic brands, there is a lot of room for sales growth of domestic beauty brands.
The operating data of domestic cosmetics listed enterprises are gratifying. The continuous upgrading of domestic cosmetics has won the trust of consumers to a certain extent, and the business data of major brands are very good. In the first three quarters of 2021, Yunnan Botanee Bio-Technology Group Co.Ltd(300957) company realized an operating revenue of 2.113 billion yuan, a year-on-year increase of 49.72%; The net profit was 356 million yuan, a year-on-year increase of 66.11% Proya Cosmetics Co.Ltd(603605) 2021: in the first three quarters, the operating revenue reached 3.012 billion yuan, with a year-on-year increase of 31.53%; The net profit was about 347 million yuan, a year-on-year increase of 25.74%.
Domestic beauty products open the way to the market. After brands such as Shanghai Jahwa United Co.Ltd(600315) ( Shanghai Jahwa United Co.Ltd(600315) ) and Proya Cosmetics Co.Ltd(603605) ( Proya Cosmetics Co.Ltd(603605) ) landed in the capital market, many domestic beauty brands have also opened the road to listing in recent years. The prospectus of Cosmetics Co., Ltd. has been submitted on the Shanghai Stock Exchange; Mao Geping, a Chinese made cosmetics maker, also reopened its listing. On October 21, 2021, it passed the municipal Party committee meeting and Huayin’s parent company plans to be listed on the Shenzhen Stock Exchange gem.
Promote the high-quality development of the skin care industry under the supervision of laws and regulations. In 2021, the National Drug Administration organized sampling inspection of 11 categories of cosmetics, and a total of 20245 batches of products were sampled, of which 19847 batches met the requirements. The qualified rate of sampling inspection of cosmetics in China was 98.03%, and the qualified rate of spot removal / whitening and talcum powder products reached 99.9%. Regulatory supervision helps to improve the construction of cosmetics standard system, create a safe and healthy market environment, and eliminate non-conforming small enterprises, so as to increase the share of leading enterprises.
Recommended attention faucets: Yunnan Botanee Bio-Technology Group Co.Ltd(300957) ( Yunnan Botanee Bio-Technology Group Co.Ltd(300957) . SZ), Bloomage Biotechnology Corporation Limited(688363) ( Bloomage Biotechnology Corporation Limited(688363) . SH) Yunnan Botanee Bio-Technology Group Co.Ltd(300957) focuses on sensitive skin care products. The products have high barriers, high customer stickiness, high repurchase rate, and sensitive skin care track has great growth space. Yunnan Botanee Bio-Technology Group Co.Ltd(300957) is the leader of sensitive skin care, positioning in China’s medium and high-end market and growing rapidly Bloomage Biotechnology Corporation Limited(688363) brand positioning is clear, focusing on hyaluronic acid skin care under Yimei. It has a diversified online sales layout and has the advantages of technology research and development and production. It is recommended to pay attention to the leading enterprises of various professional skin care tracks.
Market review (March 28 – April 2):
Among the Shenwan level industries, the light industry manufacturing industry rose 0.33% this week, ranking 21st among Shenwan’s 31 level-1 industries, underperforming the market. Among the sub sectors, the household goods sector performed better, up 1.73%, and the entertainment goods sector performed poorly, down 1.18%; The textile and garment industry fell 0.34% this week, ranking 25th among Shenwan’s 31 primary industries, outperforming the market. Among the sub sectors, the textile manufacturing sector fell 0.98%, the clothing and home textile sector rose 0.01%, and the jewelry sector fell 0.12%.
Industry data tracking:
Furniture: the price of TDI this week is lower than that of last week, and the price of MDI is higher than that of last week.
Papermaking: according to Zhuo Chuang information, in terms of pulp, on April 2, the market price of coniferous pulp was 697946 yuan / ton, down 0.55% from last Friday; The market price of broad-leaved pulp was 607727 yuan / ton, down 0.82% from last Friday; The market price of natural color pulp was 643333 yuan / ton, down 0.52% from last Friday; The market price of chemical mechanical pulp was 541667 yuan / ton, down 0.46% from last Friday. In terms of packaging paper, on April 2, the market price of corrugated paper was 378750 yuan / ton, up 0.41% from last Friday; The market price of white cardboard was 638500 yuan / ton, unchanged from last Friday. In terms of cultural printing paper, on April 2, the market price of double offset paper was 625500 yuan / ton, unchanged from last Friday; In terms of household paper, the market price on April 2 was 706667 yuan / ton, down 0.24% from last Friday.
Textile and clothing: on April 2, the price of cotton was 2280154 yuan / ton, up 0.34% from last week; The price of yarn has fallen, and the price of polyester has fallen.
Investment strategy:
Recently, the policy margin of the real estate industry has been relaxed. We believe that we can pay attention to the home sector in the near future. It is suggested to pay attention to [ Oppein Home Group Inc(603833) ], [ Suofeiya Home Collection Co.Ltd(002572) ]; It is suggested to pay attention to [ Jason Furniture (Hangzhou) Co.Ltd(603816) ], [ Xlinmen Furniture Co.Ltd(603008) ].
Risk tips: raw material price fluctuation risk and exchange rate fluctuation risk.
