The Meihu sector has the attribute of high-quality consumer goods, and its long-term allocation value is prominent. Since the beginning of 2022, the Meihu sector has fallen by 15.8%, and the market trend has outperformed the market. In terms of horizontal comparison in the optional / mandatory consumer sector, the performance growth rate, profitability and other indicators are excellent, which is located in the middle and upper reaches. From a long-term perspective, the fund's allocation heat to the Meihu sector showed an upward trend as a whole. The total market value of equity funds' positions in the sector in 2021 increased by 62.4% year-on-year, accounting for 0.4%, and increased by 0.08pcts year-on-year. In terms of individual stock selection, they prefer high-quality leaders of each subdivision track, such as Imeik Technology Development Co.Ltd(300896) / Yunnan Botanee Bio-Technology Group Co.Ltd(300957) / Proya Cosmetics Co.Ltd(603605) positions, with a total market value of RMB 12 / 49 / 3.2 billion respectively, accounting for 25% / 44% / 7% of circulating shares respectively. The current valuation of cosmetics / medical beauty sector is 50 / 54 times respectively, which are at the historical median level. Combined with the high prospect of the industry, the long-term configuration value is prominent.
The industry maintains strong toughness and high growth, and the competition pattern is constantly optimized. 1) Cosmetics: with high-quality attributes such as high gross profit and easy consumption, the retail sales of cosmetics maintained high and resilient growth. The retail sales of cosmetics increased by 14% in 2021, exceeding social zero as a whole, and increased by 1.8% in 2022q1, mainly due to the phased decline of the epidemic, which is expected to rebound in the future. Driven by the new regulations, it will turn to high-quality development, with efficacy concept / emerging social media as the main increment, and high-quality domestic products are expected to increase their share through R & D / product / channel combination; 2) Medical beauty: factors such as the sinking of the line level and the accelerated penetration of light medical beauty drive the hot demand of the industry. In 2021, the scale of China's medical beauty market increased by 15% to 227.4 billion yuan, and the scale of users increased by 19% to 18.13 million. The number of medical beauty institutions was about 13000 by 2022q1, an increase of 21% at the same time. The supervision was stricter for regional institutions and product ends, and the clearing of the informal market was accelerated; 3) Cultivated drill: the change of supply and demand continues to show a high outlook. In 2022q1, the import and export volume of cultivated drill in India increased by 106% / 77% respectively. Driven by the supply gap and high profit margin, upstream manufacturers have significantly expanded their production, and new and old jewelers and manufacturers in the downstream market have arranged brand retail.
The performance of high-quality leaders is bright, and the head effect is expected to continue. 1) Cosmetics: in 2021, the revenue / net profit of brand manufacturers increased by more than 20% at the same time. In the face of the epidemic and the rise of raw materials, the performance of the whole year is still strong. In 2022q1, under the pressure of repeated epidemic and high base, the revenue and net profit of return to parents increased by + 3.8% / - 21.6% year-on-year Yunnan Botanee Bio-Technology Group Co.Ltd(300957) / Proya Cosmetics Co.Ltd(603605) and other leading enterprises increased rapidly and their profitability remained high. The net profit attributable to the parent company in 2021 was + 59% / + 21% year-on-year. Agent operation and raw material agent industry and commerce are greatly affected by the industry environment. The revenue of the sector is - 6.5% / + 1.8% year-on-year. The performance is under pressure and needs to be digested and adjusted; 2) Medical beauty: the epidemic accelerated differentiation. The revenue of upstream manufacturers increased by 92.5% in 2021, and the revenue of leading medical beauty companies such as Imeik Technology Development Co.Ltd(300896) , Huadong Medicine Co.Ltd(000963) and Huadong Medicine Co.Ltd(000963) increased by 104% / 123%, highlighting the advantages of R & D / qualification / pipeline. In the medical service sector, the revenue / net profit attributable to the parent company increased by 32% / 17% in 2021. The epidemic affected the expansion of stores and profits, the profit growth rate decreased by 1.3pcts, and some leading enterprises had strong anti risk ability and increased against the market; 3) Cultivating diamonds: the shortage of supply pushed the revenue of the sector to increase by 30% in 2021, the profit turned from loss to profit, the average gross / net profit margin increased by 3.65/7.14pcts, and the profitability of Henan Liliang Diamond Co.Ltd(301071) / North Industries Group Red Arrow Co.Ltd(000519) and other core manufacturers increased significantly.
Investment advice. The beauty industry has high-quality attributes such as high growth toughness and pattern optimization, and the leading barriers are expected to increase. From the perspective of track growth, medical beauty cultivation drill cosmetics. From the perspective of the impact of the epidemic, we believe that cultivation drill cosmetics = medical beauty injection medical beauty terminal. Long term prospects: high-quality brands in cosmetics through R & D / products / channels, with Yunnan Botanee Bio-Technology Group Co.Ltd(300957) , Proya Cosmetics Co.Ltd(603605) , Shanghai Jahwa United Co.Ltd(600315) , corresponding to 69x / 55x / 28x PE in 2022; Medical, American and Chinese leading consumables manufacturers with both R & D and qualification barriers. Imeik Technology Development Co.Ltd(300896) , Bloomage Biotechnology Corporation Limited(688363) , corresponding to 78x / 66x PE in 2022; Cultivate leading manufacturers with core technology and clear production capacity in drilling, and recommend Henan Liliang Diamond Co.Ltd(301071) , North Industries Group Red Arrow Co.Ltd(000519) , corresponding to 32x / 32x PE in 2022.
Risk tip: repeated outbreaks lead to pressure on the consumption environment; Industry competition intensifies; The cost of traffic acquisition is upward; Risk of changes in industrial policies; New product promotion / capacity expansion was less than expected.
