\u3000\u3 Shengda Resources Co.Ltd(000603) 605 Proya Cosmetics Co.Ltd(603605) )
The overall growth in 2021 was steady, and the performance in 2022q1 was brilliant
The company released its 2021 annual report and the first quarterly report of 2022: in 2021, it achieved a revenue of 4.633 billion yuan (+ 23.47%) and a net profit attributable to the parent company of 576 million yuan (+ 21.03%); In 2022q1, the company achieved a revenue of 1.254 billion yuan (+ 38.53%) and a net profit attributable to the parent company of 158 million yuan (+ 44.16%), continuing a high growth. As a leading brand of domestic cosmetics, the company has continuous inspection of large single products and multi-channel logic, with outstanding core competitiveness. We raised the profit forecast for 2023 and added the profit forecast for 2024. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 7.38/9.36 (+ 0.23) / 1.168 billion yuan, corresponding to EPS of 3.67/4.66 (+ 0.12) / 5.81 yuan, and the current share price corresponding to PE of 49.4/38.9/31.2 times, maintaining the "buy" rating.
In 2021, online channels continued to grow rapidly, and large single products promoted the continuous improvement of gross profit margin
In terms of channels, the company's online and offline channels achieved revenue of 3.924 billion yuan (+ 49.5%) / 696 million yuan (- 38.0%) respectively in 2021. The continuous high growth of online revenue has accounted for 85%. Offline is expected to be affected by network adjustment and epidemic situation; By category, the revenue of skin care / beauty and cosmetics was + 22.7% / + 33.0% year-on-year respectively; By brand, the revenue of main brand Proya Cosmetics Co.Ltd(603605) increased steadily (+ 28.3%), and Caitang increased by (+ 103.5%). In terms of profitability, the comprehensive gross profit margin in 2021 / 2022q1 was 66.5% (+ 2.9pct) / 67.6% (+ 3.2pct) respectively. Boosted by the increase of online share and the strategy of large single products, the gross profit margin maintained an upward trend. In terms of expenses, the company's sales / management / R & D expense ratio in 2021 was 43.0% / 5.1% / 1.7% respectively, with a year-on-year increase of + 3.1pct / - 0.3pct / - 0.3pct respectively. The rapid growth of sales expenses was mainly affected by the incubation of new brands and the reconstruction of some brands.
Based on the "6 n" strategy, consolidate core competitiveness, multi-channel layout and continue to build a large single product matrix
In 2022, the company firmly promoted the "6 n" strategy and consolidated its core competitiveness. Product side: we expect that the proportion of ruby series, double anti series and other large single products will continue to increase, and there will be a large number of new products such as feather sense sunscreen; Channel side: Kwai tiktok and other traditional e-commerce channels remain steady, and the channel structure optimization of the channel and fast track brings profitability to Tmall. Brand side: Caitang and other brands are growing rapidly. It is expected to turn losses into profits in 2022, and the multi brand matrix will contribute to the increment. We believe that under the background of channel flow reform and new strict regulation of cosmetics, the company is expected to rise against the trend and further improve its competitiveness and market share by virtue of high-quality large single products and strong channel operation ability.
Risk tips: the epidemic repeatedly affects demand, market competition intensifies, and the promotion of new products is less than expected.
