\u3000\u3 Shengda Resources Co.Ltd(000603) 605 Proya Cosmetics Co.Ltd(603605) )
Event:
The company issued the 2021 annual report.
Comments:
The revenue and profit increased with high quality. In the first quarter, several small brands turned losses and the net profit margin increased
In 2021, the company realized an operating revenue of 4.633 billion yuan, with a year-on-year increase of 23.47% and a gross profit margin of 66.46%. The increase of large single product strategy and online proportion led to the continuous growth of gross profit margin; Quarter by quarter, Q1-Q4 company achieved operating revenue of 9.05/10.12/10.95/1.621 billion respectively, with a year-on-year increase of 48.88% / 30.42% / 20.71% / 10.92%. In 2021, the net profit attributable to the parent company was 576 million yuan, with a year-on-year increase of 21.03% and a net profit margin of 12.02%, which remained stable; In the first quarter of 2022, the company realized an operating revenue of 1.254 billion, with a year-on-year increase of 38.53%, and a net profit attributable to the parent company of 158 million, with a year-on-year increase of 44.16%. The profit scale was close to the upper limit of the previous forecast. The net profit margin in the first quarter reached 13.50%, which increased month on month, and the small brands yuefuti, Caitang and youzilai turned losses into profits.
The large single product strategy drives the high growth of main brands online and the continuous adjustment of offline channels
In terms of channels, in 2021, the company's online channels increased by 49.54% year-on-year to 3.924 billion, accounting for 84.93%. Among them, direct channels increased by 76.16% to 2.803 billion, accounting for 60.66%; Distribution channels + 8.56% to 1.121 billion, accounting for 24.27%. In terms of offline channels, the operating revenue was 696 million, a year-on-year decrease of 38.03%, of which the daily chemical channel decreased by 40.52% to 502 million, and other offline channels decreased by 30.50% to 194 million. By brand, Proya Cosmetics Co.Ltd(603605) main brand increased by 28.25% to 3.829 billion in 2021, accounting for 82.87% of revenue. Caitang's revenue reached 246 million in 2021, with a year-on-year increase of 103.48%, accounting for 5.33%. Other private brands and cross-border agent brands achieved revenue of 409 million / 136 million respectively, down 5.96% / 34.04% respectively. Face cream essence essence, essence of double cream, ruby cream, ruby eye cream, double anti night lamp eye cream, double anti facial mask, source repair essence, bowling blue bottle, feather feeling sunscreen 9 large single products, 21 total of large single products accounted for the main brand proportion 25%+, Tmall platform large single product accounted for about 60%.
Investment advice and profit forecast
The company is the leader of China's mass cosmetics. The main brand products, R & D, channels and marketing have multiple forces, the brand strength has been continuously improved, the product success rate is high, and the upward potential energy is strong. At the same time, the company actively expands the brand matrix, among which Caitang, yuefuti, or and other differentiated positioning small brands have a good momentum. Based on the "6 n" strategy, it is expected to build a large Chinese beauty ecological group. We estimate that the net profit attributable to the parent company from 2022 to 2024 will be RMB 744 / 921 / 1180 million, EPS will be RMB 3.70 / 4.64 / 5.87, corresponding to PE of 49 / 39 / 31x, maintaining the "buy" rating.
Risk tips
Brand market competition intensifies, and the incubation of new projects is less than expected
