\u3000\u3 Guocheng Mining Co.Ltd(000688) 363 Bloomage Biotechnology Corporation Limited(688363) )
The global leader in hyaluronic acid raw materials, and the raw material business is stable and good. In 2020, the global market share of hyaluronic acid raw materials of the company was as high as 43%. In 2021, the revenue of raw materials reached 900 million yuan, a year-on-year increase of + 29%, of which the revenue of pharmaceutical grade, cosmetic grade and food grade raw materials increased by 16% / 16% / 37% year-on-year respectively. In 2021, hyaluronic acid is approved to be added to ordinary food, and the demand for functional food is expected to increase the demand for upstream raw materials; In terms of cosmetics, from 2016 to 2019, the global market scale CAGR reached 16%, and the market of efficacy skin care products continued to be booming. As a leader in raw materials, the company is expected to benefit.
Create a functional skin care brand matrix and increase investment in self broadcasting. The differentiated positioning of its four major brands, taking advantage of the e-commerce platform and well-known KOL traffic, quickly completed the construction of large single products of the brand. In 2021m3, the core single product revenue of runbaiyan / kwadi / mibeier / BM muscle brand accounted for 69% / 95% / 11% / 56%. Tiktok gradually reduces its head anchors’ input and builds its own team on the platform such as jitter. It is expected to optimize the rate and improve profitability. The revenue scale of functional skin care products in 21 years was 3.3 billion yuan, with a year-on-year increase of + 147%. It is estimated that the segment revenue CAGR in 21-24 years will reach 37%.
Establish a diversified medical end product matrix and usher in new opportunities in the policy window period. The company actively expands and improves categories. In 2021, the company launched the defense against aging double needle, positioning the high-end market, filling the blank of static grain segmentation. In March 2021, the state incorporated Shuiguang needle into the supervision of class III medical devices. Benefiting from the policy window period, Runzhi doll needle is expected to further improve the market coverage. It is estimated that the CAGR of medical terminal business income in 21-24 years will reach 22%.
Based on the long-term layout, promote the establishment of functional food industry standards. Relying on its own advantages in raw materials and the accumulation of reputation in skin care brands, and with the support of a strong innovation and transformation technology platform, the company has realized the expansion and exploration in the large functional food market, led the establishment of industry standards and built industry ecology. In 2021, the company launched three major brands: Black zero, shuijiquan and Wuxiang corner. Its products cover a variety of daily snacks such as drinks, jelly and candy. Under the trend of “punk health”, the food business is expected to meet development opportunities.
Investment suggestion: the company’s leading position in global hyaluronic acid raw materials is stable, and four-wheel drive develops steadily. Differentiated positioning of skin care products business, large sales volume of core single products, gradual improvement of brand awareness, and high growth momentum of business; In terms of medical and American products, the license advantage is further highlighted under the tightening of supervision; The functional food market has broad space, forward-looking layout and long-term development. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 1.08/14.4/1.82 billion respectively, and the corresponding EPS will be RMB 2.24/2.99/3.79. For segment valuation, we will give the company a target market value of RMB 88.5-97.3 billion. Maintain the “buy” rating.
Risk warning: the research and development of new products is not as expected; The promotion of new products is less than expected; Market competition intensifies.
