\u3000\u30 Fawer Automotive Parts Limited Company(000030) 06 Chongqing Baiya Sanitary Products Co.Ltd(003006) )
Company profile: Baya’s products mainly cover sanitary napkins, baby diapers and adult incontinence products. The sanitary napkin brand “free point” enjoys high popularity. Based in Chongqing, the company is the leader in Sichuan and Chongqing. The sales network covers 17 provinces and cities including Chongqing, Sichuan, Yunnan, Guizhou and Shaanxi. The sanitary napkins and baby diapers industry is mature, and the change trend of the industry mainly lies in the change of competitive structure under the channel reform; The adult incontinence products market is still in the early stage of development. With the increase of the scale and proportion of China’s elderly population, the intergenerational change of consumer groups and the upgrading of consumption ideas, the scale growth can be expected.
Comments on the annual report: the growth rate of performance is stable, and the growth rate of sanitary napkin categories and e-commerce channels is fast. 2021 revenue of 1.46 billion yuan, + 17%, net profit attributable to parent company of 230 million yuan, + 25%. Gross profit margin / operating profit margin / net profit margin 44.7% / 17.4% / 15.3%, year-on-year + 2.0/0.5/0.8pp. Independent brand sanitary napkins / independent brand diapers / ODM products were RMB 1.184/1.48/130 billion respectively, with a year-on-year increase of + 25.0% / – 3.9% / – 12.7% respectively. Dealers / Ka / e-commerce were 857 / 266 / 210 million yuan respectively, with a year-on-year increase of + 21.8% / + 8.8% / + 36.8%%. The operation efficiency is relatively stable. In 2021, the turnover days of inventory / accounts receivable / accounts payable were 69 / 28 / 70 days respectively, with a year-on-year increase of – 1.0 / + 3.6 / – 3.2 days. Profitability remained stable. The company’s return on net assets and return on invested capital in 2021 were 19.5% and 18.9% respectively, with a year-on-year increase of – 0.5% / – 0.6%.
Optimize the product structure and consolidate the advantages of core categories. Continuous optimization of the company’s product structure: first, the proportion of the company’s core products and high gross profit category “free point” sanitary napkin revenue has increased, which is the main driving engine of the company’s revenue growth and promotes the profit margin; Second, the revenue of products with high unit price increases faster, which drives the increase of customer unit price. Sanitary napkin products have a solid position in Southwest China. Free point brand sanitary napkins accounted for more than 30% of Chongqing in 2021, ranking first; The ratio of Yundu and Shaanxi is more than 20%, accounting for more than 10%.
Focus on e-commerce channels and explore provinces outside the core region. In order to achieve the rapid development of online business, brand investment has been shifted from tiktok traditional brand to centralized resources, and the brand investment has been increased, especially in the platform of shaking and other platforms. The introduction of experienced e-commerce operators; The company has built an online distribution system for the business in peripheral provinces to expand the region.
Risk warning: repeated epidemic situation; Price fluctuation of raw materials; Channel development is less than expected; Systemic risk.
Investment suggestion: be optimistic about the channel expansion and regional expansion space of regional individual protection leaders. We are optimistic about the company’s production, R & D, iterative innovation capabilities; And the ability to further expand to more regions of the country through channel expansion. Considering the long-term prospect of the track, the company’s own competitiveness and the scarcity of the target, a certain valuation premium is given. The reasonable valuation corresponds to 26.5-29.0xpe in 2022, and the reasonable valuation range is 16.4-18.0 yuan, an increase of 25.6% ~ 37.8% compared with the previous closing price. The “buy” rating is given for the first time.
