\u3000\u3000 Nanjing Cosmos Chemical Co.Ltd(300856) (300856)
More than 20 years of deep cultivation has shaped the global leader of sunscreen, and the two businesses have driven rapid growth. Nanjing Cosmos Chemical Co.Ltd(300856) was founded in 2000 and listed on the gem in 2020. It is a supplier of cosmetic active ingredients and synthetic fragrances and a global leader in sunscreen manufacturing. In 2015-2020, the company's revenue / net profit attributable to the parent company CAGR reached 17% / 51%, and the revenue / net profit in 2021q1-q3 was 743 / 112 million yuan. It is expanding from a single category of sunscreen to multiple categories. In 2019, the company's sunscreen ranked first in the world with a global market share of 28% (in terms of sales), and synthetic spices are also highly competitive.
Consumption upgrading drives the increase of sunscreen demand, and the new cosmetics regulations and boots are put on the ground to offer dividends. The demand for sunscreen is becoming more and more rigid, driving the growth of the demand for sunscreen in the upstream. According to Euromonitor, 1) end products: in 2020, the global / Chinese sunscreen cosmetics market scale was 69.4/14.4 billion yuan, and the global / Chinese CAGR was 0.2% / 11.2% from 2015 to 2020. 2) Upstream: the global / Chinese consumption of sunscreen is about 54 / 12000 tons, and the CAGR is about 8% / 15% from 2015 to 2020. It is expected to maintain a compound growth rate of 4% / 7% in the next five years. Look at the main players: at present, the main manufacturers are mainly international large multinational companies such as DSM and BASF. With strong innovative technical advantages, Kos has occupied a considerable market share and continued to expand. Direct beneficiaries of the new regulations on cosmetics: according to the provisions of the new regulations on cosmetics implemented on January 1, 2022, when applying for registration or filing, the registrant and filer shall provide safety related information of raw materials with anti-corrosion, sunscreen, coloring, hair dyeing, freckle and whitening functions. As a raw material leader, the company is expected to enjoy the dividends of the new regulations with strong customer resources.
Both volume and price rise + new production capacity and new categories are about to be put into operation, and the driving factors are clear. From 2020q1 to 2021q2, due to the repeated epidemic, the rise of plateau material cost and shipping cost, the company's performance has been dragged down. Since 2021q3, the company has ushered in an inflection point of fundamentals. Specifically: 1. Short term volume and price increases: with the easing of the epidemic and the weakening of travel restrictions, downstream demand gradually recovers. At the same time, 2021q4 starts to raise the price of some products, and 22q1 will re sign a new price agreement to pass on the rise of upstream raw materials. Therefore, the gross profit margin from 21q4 to 22q1-22q2 is expected to be repaired. 2. Centralized release of medium-term new capacity + new categories: 1) build a new avobenzol production line with an annual capacity of 2K tons in 20q4, and it is expected to put in 1K tons in 22 years; 2) salicylic acid series: 6K tons of capacity, built in 21q2, and it is expected that 70% of the capacity will be released in 22 years; 3) New sunscreen: the annual production capacity of 500 tons and 1K tons in diethylaminohydroxybenzoyl benzoate and octyl triazinone is expected to be 700-800t in 2022. A total of 6000 tons of new capacity will be released in 2022, with a capacity increase of 17%. The remaining capacity is expected to continue to be released in 2023 for growth.
3. It is worth noting that the company plans to invest 3.5 billion yuan in high-end personal care and R & D projects of Anqing and Jiangning new projects in 2021, opening up space for the company's long-term development.
Investment suggestion: with complete qualifications and rich matrix, focusing on overseas giant customers, it still can actively raise prices, highlighting its global advantages, and the expansion of customers is expected. It is expected that the net profit in 2021 / 22 / 23 will be 163 / 251 / 332 million, EPS will be 144 / 2.22/2.94 yuan and PE will be 44 / 29 / 22x. It is optimistic about the development prospect of the company and will be rated as "recommended" for the first time.
Risk warning: the project progress is not as expected, the epidemic situation is repeated, and the risk of raw materials rising.
