\u3000\u30 Shaanxi Zhongtian Rocket Technology Co.Ltd(003009) 57 Yunnan Botanee Bio-Technology Group Co.Ltd(300957) )
Event: in 2022q1, the company achieved revenue of 809 million yuan, with an increase of 59.32%, net profit attributable to the parent company of 146 million yuan, with an increase of 85.74%, deduction of non net profit of 124 million yuan, with an increase of 61.82%, and EPS of 0.34 yuan. Driven by the core products of cosmetics, Q1 performance growth exceeded expectations.
Comments:
The cosmetics business has driven high income growth, and the core large single products have successfully emerged from the circle. The cosmetics business of 2022q1 company contributed to the main revenue, and the core products performed well. By category, the income of 2022q1 special care cream, sunscreen and Shumin essence has achieved rapid growth; The company expects that the freeze-dried series products will achieve rapid growth during the non major promotion activities in the first quarter, and are expected to become the core single product supporting the facial mask category throughout the year. In addition, driven by strong scientific research product power, we expect that the revenue growth of the red repair series and the whitening series supported by the whitening essence will be higher in the first quarter.
The gross profit margin remained high and various inputs made steady progress. Under the comprehensive influence of product and channel structure, the gross profit margin of 2022q1 company is 77.82%, basically stable. In terms of expenses, the company’s sales expense rate increased by 2.10pct to 48.02% due to factors such as the company’s continuous investment in brand image promotion expenses and the increase of marketing personnel’s salary expenses; In 2022q1, the company’s administrative expenses and R & D expenses increased by 51.17% and 35.71% to 613097 million yuan and 309967 million yuan, mainly due to the increase of administrative expenses such as management personnel costs and investment in R & D activities with the growth of the company’s scale. It is expected that with the development of plant laboratories and the continuous deepening of foreign cooperative R & D, the annual R & D expenses will maintain a relatively stable growth with the income. Benefiting from the scale effect, the management expense rate and R & D expense rate of the company decreased by 0.41pct and 0.67pct to 7.58% and 3.83% in 2022q1. In 2022q1, the company obtained a year-on-year increase in deposit interest income, which promoted the year-on-year increase of financial income by 283.44% to 3.5969 million yuan. Overall, in 2022q1, the net profit margin attributable to the parent company increased by 2.57pct to 18.06%, and the high profitability continued. The operating cash flow of 2022q1 company is – 167 million yuan in stages, which is mainly due to the company’s lengthening of the account period and the extension of the payment and settlement cycle.
New brands continue to incubate and expand emerging segments, which is expected to create the company’s second growth curve. In 2021, the company’s new brand “winonababy” became a cutting-edge and high growth brand in the industry. The 2022q1 brand contributed nearly 30 million yuan of revenue, and it is expected that the high-speed growth trend of revenue will continue throughout the year. The company will lay out the “beauty answer” brand focusing on skin repair for a long time to further expand the market segment and is expected to bring new performance growth points. The company endows the new brand “aoxmed” with important strategic significance. The company will continue to cultivate deeply and position the brand as high-end. In the future, it is expected to realize the simultaneous rise of volume and price and build a new performance growth curve of the company.
Profit forecast and investment rating:
The functional cosmetics industry continues to have a high outlook, the company’s new brands are progressing smoothly, the product matrix is constantly enriched, the offline channel layout continues to expand, and there is a large room for growth in the future. We raised the EPS of 202224 to 2.86/3.77/4.84 yuan (the original value was 2.70/3.55/4.39 yuan). At present, the share price corresponds to 68.76 times PE in 22 years. We have long been optimistic about the company’s focus on R & D and innovation, continuously improve the skin care product category matrix, and create a healthy skin ecology. The growth of sub brands is strong, which is expected to bring the second performance growth curve to the company, and the long-term competitiveness is expected to be further improved to maintain the “buy” rating.
Risk factors: industry policy change risk, product R & D and registration risk, intensified market competition, product safety risk, etc.
