\u3000\u3 Shengda Resources Co.Ltd(000603) 605 Proya Cosmetics Co.Ltd(603605) )
[key points of investment]
The company released the annual report of 2021 and the first quarterly report of 2022, and 22q1 achieved a good start. In 2021, the revenue is yoy + 23.5% to 4.633 billion yuan, the net profit attributable to the parent is yoy + 21.0% to 576 million yuan, and the net profit not attributable to the parent is yoy + 20.9% to 568 million yuan. In a single quarter, the revenue of 21q4 was yoy + 10.9% to 1.621 billion yuan, and the net profit attributable to the parent company was yoy + 10.9% to 212 million yuan; 22q1 revenue yoy + 38.5% to 1.254 billion yuan, and the net profit attributable to the parent yoy + 44.2% to 158 million yuan, which fell below the upper limit of performance forecast, mainly due to the excellent performance during the promotion period of the Eighth National Congress of the Communist Party of China.
Large single products + online direct sales jointly drive the optimization of profitability. The Q1 gross profit margin in 2021 / 2022 was 66.46% / 67.57%, yoy respectively + 2.9pct/3.2pct, which mainly benefited from the increase in the proportion of high gross profit products under the large single product strategy and the increase in the proportion of high gross profit online direct sales channels. The ratio of sales / management / R & D expenses in 2021 is 42.98% / 5.12% / 1.65%, yoy respectively + 3.09pct / - 0.33pct / - 0.27pct. Among them, the large increase in the sales expense rate is mainly due to the incubation of new brands of Caitang and keruifu and the brand reconstruction of yuefuti, which makes the image publicity and promotion rate yoy + 3.44pct. In 2021, the net interest rate yoy-0.02pct to 12.02%.
Online channels led the growth, and the proportion of self broadcast increased. According to different channels, the online / offline revenue in 2021 was 3.924 billion yuan / 696 million yuan respectively, yoy respectively + 49.5% / - 38.0%; Revenue accounted for 84.93% / 15.07%, yoy respectively + 14.9pct / - 14.9pct. Tiktok Kwai / Jingdong accounted for 45%+/15%+/10%+ respectively, and continued to optimize Tmall's fine operation and increase the proportion of self broadcasting of the Tmall's tiktok. The expected growth in 2022 is still high. The offline contraction is mainly due to the company's initiative to reduce the outlets of CS and supermarkets, focusing on key supermarkets such as Chongbai, Yintai and Tianhong.
The strategy of large single product continues to be fulfilled, and the contribution to revenue and performance is stable. In terms of brands, the revenue of Proya Cosmetics Co.Ltd(603605) / Caitang / other private brands / cross-border agent brands in 2021 was 38.29/2.46/409136 million yuan respectively, yoy respectively + 28.25% / + 103.48% / - 5.96% / - 34.04%, accounting for 82.87% / 5.33% / 8.85% / 2.95% respectively. Among them, large single products account for more than 25% of the revenue of Proya Cosmetics Co.Ltd(603605) brand and about 60% of the revenue of tmall platform. In 2021, ruby and double resistance essence were iterated to 2 version, and new brand new products including source repair essence, bowling blue bottle, feather feeling and sun protection were newly developed. Sub brands Caitang, yuefuti and youzilai 22q1 turn losses into profits and are expected to contribute new increment.
Cooperation with high-quality institutions to strengthen basic R & D and raw material end layout. The company maintains cooperation with front-end research institutions and excellent raw material suppliers such as Institute of Microbiology of Chinese Academy of Sciences, Ashland China, BASF China, DSM Shanghai, lipotrue s.l. of Spain and Zhongke Xinyang of Shenzhen, and works together with Zhejiang Pai peptide innovative peptide R & D, peptide green synthesis and raw material production and supply, which is expected to be preferentially applied to Ruby series.
[investment suggestions]
The company's large single product strategy has achieved remarkable results, the brand construction is deeply rooted in the hearts of the people, and the platform organization enables the construction of brand matrix. Based on the excellent performance of the company's online direct sales channels, we slightly raised the forecast of the company's operating revenue and net profit attributable to the parent company from 2022 to 2023. It is estimated that the company's operating revenue will be RMB 6.002/76.01/9.342 billion from 2022 to 2024, with a year-on-year growth rate of 29.54% / 26.63% / 22.92% respectively; The net profit attributable to the parent company was 742 / 934 / 1158 million yuan respectively, with a year-on-year growth rate of 28.72% / 25.96% / 23.96% respectively; EPS is 3.69/4.65/5.76 yuan respectively; The corresponding PE is 49 / 39 / 31 times respectively, maintaining the "overweight" rating.
[risk tips]
Macroeconomic impact on consumer demand;
New brand incubation and new product promotion are not as expected;
Image promotion costs erode profits.
