\u3000\u3 Shengda Resources Co.Ltd(000603) 605 Proya Cosmetics Co.Ltd(603605) )
Events
The company disclosed its 2021 quarterly report and 2022 annual report. In 2021, the company achieved an operating revenue of 4.633 billion yuan, a year-on-year increase of 23.47%, and a net profit attributable to the parent company of 576 million yuan, a year-on-year increase of 21.03%. It is proposed to pay a cash dividend of 8.6 yuan (including tax) for every 10 shares and increase 4 shares with capital reserve for every 10 shares.
In the first quarter of 2022, the company achieved an operating revenue of 1.254 billion yuan, a year-on-year increase of 38.53%, and a net profit attributable to the parent company of 158 million yuan, a year-on-year increase of 44.16%.
Key investment points
On the one hand, the parent company's net revenue increased by more than 2.3 billion yuan in the first quarter of 2021, and the main brand continued to achieve a rapid growth of 2.3 billion yuan in the first quarter of 2021, accounting for more than 2.5 billion yuan in the first quarter of 2021, Accounting for about 60% of the revenue of tmall platform (more than 55% in the first three quarters of 21 years). On the other hand, Caitang, the makeup brand incubated by the company, has developed rapidly in 21 years, and its revenue has doubled. Quarter by quarter, 21q1 / Q2 / Q3 / Q4 company achieved revenue of 9.1/10.1/10.9/1.62 billion yuan respectively, with a year-on-year increase of 48.9% / 30.4% / 20.7% / 10.9%. The growth rate of 21q4 revenue slowed down month on month. It is judged that it is related to the company's contraction of cross-border agent brand business and the high base in the same period of last year. 22q1 company achieved a revenue of 1.254 billion yuan, with a year-on-year increase of 38.5% under the promotion of the "March 8" festival, and the revenue in March alone reached 624 million yuan. On the net profit side, in 2021, the company realized a net profit attributable to the parent company of RMB 576 million, with a year-on-year increase of 21.03%. The growth rate of the company's performance was basically consistent with the growth rate of revenue, and the high-quality growth continued to be realized. Among them, 21q1 / Q2 / Q3 / Q4 realized a net profit attributable to the parent company of RMB 1.1/1.2/1.4/210 million respectively, with a year-on-year increase of 41.4% / 15.0% / 30.1% / 10.9%. 22q1 company realized a net profit attributable to its parent company of 158 million yuan, a year-on-year increase of 44.2%, close to the upper limit of previous performance forecast.
Online channels are the basic business of the company, and offline channels are in the process of adjustment and Optimization: from the perspective of channels, in 2021, the company's online channels achieved a revenue of 3.924 billion yuan, a year-on-year increase of 49.5%, accounting for 85% of its main business revenue from 53% in 19 years. The company's online sales are dominated by tmall platform, accounting for more than 45%. In 21 years, the company continued to consolidate the large single product strategy of tmall platform to improve the customer unit price and repurchase rate, In 2021, the customer unit price of Proya Cosmetics Co.Ltd(603605) brand on tmall platform increased to 205 yuan, and the repurchase rate exceeded 30%. In terms of offline channels, the revenue in 2021 was 696 million yuan, a year-on-year decrease of 38.0%, and the proportion in the main business revenue decreased from 47% in 19 to 15%. The decline in offline channel revenue was due to the company's initiative to optimize and adjust the daily chemical and supermarket outlets, take the initiative to remove inventory, focus on building Chongqing Department Store Co.Ltd(600729) , Yintai department store, Tianhong Department store and other systems, adjust the counters of shopping malls and improve the brand image, The spread of the epidemic in China in the past 21 years has had an impact on the offline passenger flow. It is expected that the scale of the company's offline channel revenue will still shrink this year and the proportion of online channels will further increase.
The potential of Proya Cosmetics Co.Ltd(603605) main brand is upward, and the second growth curve of Caitang brand is prominent: from the perspective of brands, in 2021, Proya Cosmetics Co.Ltd(603605) , Caitang, other brands and cross-border agent brands achieved revenue of RMB 3.83 billion, RMB 250 million, RMB 410 million and RMB 140 million respectively, with a year-on-year increase of 28.2%, 103.5%, - 6.0% and - 34.0%. Caitang, a color makeup brand, has a prominent second growth curve, accounting for 5.3% of the main business revenue. It is expected that Caitang brand will start to make a profit in 22q1, The main brand Proya Cosmetics Co.Ltd(603605) has achieved the rapid growth of the leading industry under the background of year-on-year double-digit growth in the industry in 21 years, accounting for 82.9% of the main business revenue, and other independent brands and cross-border agent brands account for 8.9% and 3.0% of the main business revenue.
Profitability is in the opposite direction, and the cost is good. Profitability has increased by 2.9pct to 66.5% in 2021 compared with 2021, and the gross profit margin of 3.2pct has increased by 3.2pct to 67.6%. Face to face, the company's profitability has increased significantly with the increase of the cream, eye cream, face cream and the essence of online direct sales. In terms of expense ratio, in 2021, the company's expense ratio increased by 2.7pct to 49.6%, of which the sales / management / R & D / financial expense ratio was 43.0% / 5.1% / 1.7% / - 0.2%, with a year-on-year increase of + 3.1 / - 0.3 / - 0.3 / + 0.2pct. In 2021, the company increased the publicity and promotion of new brand images such as Caitang, keruifu and yuefuti. The sales expense ratio increased, and the expense ratio of 22q1 was basically the same year-on-year. Under the comprehensive influence, In 2021, the net profit margin of the company's sales was 12.0%, which remained basically stable compared with the same period of last year. The net profit margin of 22q1 company increased by 1.7pct to 13.5% year-on-year. In terms of inventory, as of the end of the year, the company's inventory was 450 million yuan / - 4.4%, and the inventory turnover days were 106 days, an increase of 4 days year-on-year. In terms of cash flow, the net cash flow from operating activities of the company in 2021 was 830 million yuan, with a year-on-year increase of 150.2%. On the one hand, it was due to the rapid expansion of online revenue scale, on the other hand, it was due to the destocking of offline channels and the lack of credit policy support for dealers in 21 years, and the accounts receivable decreased by 51% year-on-year.
Investment suggestion: in 2021, the company continued to deepen the strategy of large single products and realized the synchronous and rapid growth of scale and performance. 22q1 still achieved more than 30% revenue growth under the influence of the epidemic and the obvious slowdown of growth in the industry. The voice accumulation of main brands has achieved remarkable results and new brands have grown rapidly. We expect the company's earnings per share from 2021 to 2024 to be 3.60, 4.48 and 5.65 yuan respectively. The closing price on April 21 corresponds to about 50 times of the company's PE (22e), maintaining the "buy-b" proposal.
Risk warning: overseas brand promotion affects the cosmetics market competition; Marketing promotion and brand cultivation may put pressure on the expense rate; The epidemic situation in China has been repeated.
