\u3000\u3 Shengda Resources Co.Ltd(000603) 605 Proya Cosmetics Co.Ltd(603605) )
Key investment points
Performance: net profit attributable to parent company increased by 21% / 44% in 21 years / 22q1
In 22q1, the company realized: revenue / net profit attributable to the parent company was 1.25/160 billion yuan, an increase of 39% / 44% at the same time; The net cash flow from operating activities was 340 million, an increase of 522%. Previously, the company disclosed the performance forecast of the first quarterly report. It is expected that the revenue of 22q1 will be 1.177-1.268 billion yuan, with a year-on-year increase of 30% - 40%; The net profit attributable to the parent company was 148159 million yuan, with a year-on-year increase of 35% - 45%. The actual growth rate is close to the forecast upper limit, slightly exceeding market expectations.
In 21 years, the company achieved: revenue / net profit attributable to the parent company was 4.63/580 billion yuan, an increase of 23% / 21% at the same time. The net cash flow from operating activities was 830 million, an increase of 150% at the same time. The high increase in cash flow was mainly due to the high increase in online revenue + the reduction of dealers' inventory and accounts receivable offline. Split of revenue in the 21st year:
By channel: the online / offline revenue was 3.92/700 billion yuan, a year-on-year increase of +50%/-38%, accounting for 85%/15%. The decline of offline revenue is mainly due to the adjustment of outlets, active destocking and the impact of the epidemic.
By brand: Proya Cosmetics Co.Ltd(603605) / Caitang's revenue was 3.83/250 billion yuan, an increase of 28% / 103% at the same time, accounting for 83% / 5%. By category: 1) skin care: revenue was 3.98 billion yuan, a year-on-year increase of + 23%, accounting for 86%; 2) Makeup: the revenue was 618 million, up + 33% year-on-year, mainly due to the successful incubation and implementation of Caitang brand.
Profitability: large single products + high growth of online direct sales drive the increase of gross profit margin, and the net profit margin of new brand incubation is stable
Category + channel improvement to increase gross profit margin. Product end, the proportion of high Maori essence category increased; On the channel side, the proportion of online direct sales increased by 18pp, and the proportion of online self broadcasting increased. At the same time, the incubation of the company's multi brand matrix resulted in an increase in the rate of sales expenses, including the incubation of new brands Caitang, correctors and the reconstruction of yuefuti brand.
22 Q1, gross profit margin 67.6% (+ 3PP), net profit margin 13.5% (+ 1.7pp), sales / management / R & D expense ratio 42.4% (+ 0.7pp) / 5.2% (- 0.6pp) / 2.4% (0.4pp) respectively. The gross profit rate of R & D expense is 0.5% (- 3PP) / 1.0% (- 3PP) / 1.0% and the net profit rate of 3PP / 3PP is 0.5% (- 3PP) / 1.0% / 3PP respectively).
Highlights: success of large single product strategy + channel development & parallel fine operation + initial appearance of beauty group pattern
1) product: the strategy of large single product is successful, extending the product life cycle and significantly increasing the unit price of consumers. The essence of the big C products was hatched successfully. The data of reptiles were used to estimate the proportion of the essence of Tmall's channels. The price of the products was increased from 100 yuan to 200 yuan in early. The essence of essence essence is the ruby essence, double anti essence, ruby cream, ruby eye cream, double anti night face cream, double anti facial mask, source repair essence, bowling blue bottle, etc. In the future, the R & D end will continue to make efforts and cooperate with the world's leading scientific research institutions.
Tiktok: 2) channels: Tmall brand self broadcasting ratio + + clinging to fast track and Kwai. In 20 / 21, the company's online direct sales increased by 80% / 76%. In the future, the company will finely operate new channels such as tmall, overweight brand self broadcasting, trembling, jd.com and so on. Offline, the company will adjust and upgrade its offline daily chemical outlets, focusing on building Yintai, Chongbai, Tianhong and other department store systems
3) brand: the pattern of "little L'Oreal" beauty group is emerging. The brand positioning and average price of products are as follows: mid-range skin care ( Proya Cosmetics Co.Ltd(603605) 200-400 yuan) + mass skin care (yuefuti 50-100 yuan) + make-up (Caitang 150200 yuan) + washing (or 150200 yuan) + high-efficiency skin care (correctors 260600 yuan). The essence of facial mask, face cream, eye mask and other products will continue to be built in Proya Cosmetics Co.Ltd(603605) . Strengthen Caitang's pre makeup, base makeup, fixed makeup and other categories to seize the market share of mid-range makeup.
Profit forecast and valuation
The company continues to promote the strategy of large single products with remarkable results, superimposes the expansion of e-commerce channels, enriches strong main brands and incubates private brands, and expands the brand matrix, which is expected to promote the continuous growth of performance. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 750 million, RMB 970 million and RMB 1.21 billion respectively, with a year-on-year increase of 30%, 29% and 25%, corresponding to 49, 38 and 30 times of PE, maintaining the overweight rating.
Risk tips
The epidemic affected the growth rate of the cosmetics industry, which did not meet expectations; The competition of downstream brands is fierce, and the competitive pressure of the company is increasing.
