\u3000\u3 Shengda Resources Co.Ltd(000603) 605 Proya Cosmetics Co.Ltd(603605) )
The company released the annual report of 2021 and the first quarterly report of 2022, and the performance met expectations. ① On the whole, the company achieved revenue of 4.633 billion / + 23.47% YoY in 21 years, mainly due to the growth of online channel revenue. The net profit attributable to the parent company was 576 million / + 21.03% YoY and the net profit not attributable to the parent company was 568 million / + 20.89% YoY. The performance was in line with expectations; ② In a single quarter, Q4 achieved revenue of 1.621 billion / + 10.92% YoY, net profit attributable to parent company of 212 million / + 10.90% YoY, net profit not attributable to parent company of 212 million / + 16.54% YoY, historical high base and reduction disturbance of agent operation business, which was in line with expectations as a whole; ③ 22q1 revenue is 1.254 billion / + 38.53%, net profit attributable to parent company is 158 million / + 44.16% YoY, net profit not attributable to parent company is 147 million / + 36.21% YoY, which falls on the upper edge of performance forecast center.
The proportion of online direct sales + large single product sales + self broadcasting has increased, driving the growth of profitability and increasing the investment in brand construction. ① Gross profit margin: the gross profit margin of sales in 21 years was 66.46% / + 2.91% YoY, and that of 22q1 was 67.57% / + 3.16% yoy. The increase in the proportion of online sales, the proportion of revenue of high gross profit products under the large single product strategy and the proportion of Online self broadcasting jointly drove the continuous growth of profitability. ② Expense rate: the company's sales expense rate in the past 21 years was 42.98% / + 3.09pcts, which was mainly due to the increase of image publicity and promotion expenses under the incubation of new brands such as Caitang and correctors and the reconstruction of brands such as yuefuti. The expense rate of image publicity and promotion increased by 3.44% compared with the same period last year; The management fee rate is 5.12% / -0.33pcts; The R & D expense ratio was 1.65% / -0.27pcts, which was stable and slightly decreased, while the total R & D investment increased. The International Academy of Sciences was established to strengthen basic R & D, strengthen the research of functional raw materials and industry university research cooperation with BASF, DSM and other companies. The expense rate of 22q1 was basically the same as that of the same period last year. ③ Net interest rate: the net interest rate attributable to the parent company in 21 years is 12.43% / -0.25pcts, and the net interest rate attributable to the parent company in 22q1 is 12.63% / + 0.49pcts.
The strategy of large single products has been gradually realized, and the sub brands have performed brilliantly. The company deepened the strategy of large single product and gradually fulfilled it: (1) upgrading and iteration: with two large single product Ruby essence and double anti essence as basic, we build Ruby and double resistance series products, and constantly optimize and upgrade, extend the product life cycle; (2) improve product matrix: relying on the company's R & D strength, we will launch new products, including source repair essence, bowling blue bottle, feather feeling sunscreen and so on, and improve and optimize the product mix. In 2021, the sales of large single products accounted for more than 25% of Proya Cosmetics Co.Ltd(603605) brands and had high Maori properties. Tiktok: Tmall channel continues to consolidate the strategy of large single products, Kwai, fast track channel bonus phase + layout self seeding + optimize product structure, and expects to grow well in 22 years. Jingdong channel strengthened refined operation and optimization of goods structure. Sub brand tiktok has a 246 million /yoy+103% income in 21 years, showing bright eyes, perfect product matrix + jitter channel to support 22 years growth, and strengthen the makeup, front makeup, makeup, high gloss and other categories, deepen the penetration of new media, and seize the market share of the middle end.
Investment suggestions: management upgrading + product remodeling + grasping channel dividend + continuous marketing output, so as to promote the company's overall high-quality development from channel to product and then to brand upgrading. We estimate that the company's revenue from 2022 to 2024 will be 5.819 billion / 7.277 billion / 8.958 billion respectively, with a corresponding growth rate of 25.58% / 25.06% / 23.11%, the net profit attributable to the parent company will be 738 million / 932 million / 1.157 billion respectively, with a corresponding growth rate of 28.01% / 26.36% / 24.11%, and the PE from 2022 to 2024 will be 49.43x/39.12x/31.52x respectively, maintaining the "buy" rating.
Risk tips: the decline risk of prosperity in the cosmetics industry, the risk of intensified competition in cosmetics, the risk of sub brand incubation less than expected, and the promotion of new products less than expected.
