\u3000\u3 Shengda Resources Co.Ltd(000603) 983 Guangdong Marubi Biotechnology Co.Ltd(603983) )
The growth rate of medium and high-end skin care market is faster than that of mass market, and anti-aging is still an important demand of skin care
According to iResearch consulting, the scale of medium and high-end beauty market in 2020 was 40.8 billion yuan, with a compound growth rate of 26.37% from 2016 to 2020. It is estimated that the scale of medium and high-end beauty market in 2023 will be 73.1 billion yuan, and the compound growth rate from 2021 to 2023 will be 19.84%. The CAGR of mass beauty market in 20162020 and 20212023 were 13.90% and 15.34% respectively. It can be seen that the growth rate of the medium and high-end market is significantly faster than that of the mass market. As for the efficacy of skin care, according to cbndata, 34% of the main efficacy demands of consumers who buy skin care products require anti-aging, which is the largest component of skin care demand. However, because it is difficult to see the effect of anti-aging cosmetics in the short term, the main components of anti-aging products of foreign cosmetics manufacturers, such as bifida yeast, have been tested by the market. Chinese brands lack relevant technology accumulation, so international brands occupy the main anti-aging market.
The main brand MARUMI is positioned at the middle and high end, expanding from eye and face to many categories
“MARUMI” has insisted on building a high-end brand image since its establishment. It is a scarce medium and high-end eye care brand in China. In 2007, with the launch of the advertisement of “play, play away the crow’s feet”, the company’s elastin series has become the most popular trump card product of MARUMI, which has been updated to the fifth generation. MARUMI has been deeply engaged in eye skin care while continuously iterating over the large single product eye cream. The company has launched popular new products such as butterfly eye mask, small red pen eye cream and small purple bullet eye cream. In 2021, Q4 company launched the small gold tube double collagen series, suspended the patent by using recombinant humanized collagen + translation, and vigorously developed large single products with core technology. In addition, while deeply grasping the eye skin care market, the company extends its product line to facial skin care to improve the ceiling of the company’s growth. Taking the little red pen family as an example, based on the little red pen eye cream, the company launched a set of products from the eyes to the face, including little red scorpion essence, little red pen essence cleansing, little red pen essence milk and little red pen essence water, to achieve comprehensive anti-aging.
Consolidate the high-end image of offline channels and look forward to the implementation of online transformation achievements
The offline market can give cosmetics brands the opportunity to extend service content and expand brand boundaries. Many high-end cosmetics have set up a large number of offline stores. According to the survey data of iziretail Yirui, as of January 2020, Lancome has more than 300 stores in China (including independent counters and boutiques), and more than 200 stores such as Estee Lauder, Dior and Shiseido. Therefore, the company’s product positioning is medium and high-end, and a certain number of offline channels are needed to match it. The company’s access to Sephora and other high-end beauty platforms, the stability of high-end department store channels, and the adoption of special products and channels will help to continuously improve and consolidate the brand image. With the change of beauty channel traffic, the company continues to promote online transformation. In 2020, the company will cut into emerging live channels such as Tiktok and Kwai from 0 to 1. In 2021, the daily total Gmv of MARUMI Tiktok super brand exceeded 34.52 million, and the Gmv of self broadcast single game exceeded 6.8 million, with a total broadcast volume of more than 27million.
Investment advice
As a rare medium and high-end skin care brand in China, MARUMI launched facial skin care products from eyes and face while deeply cultivating eye skin care, so as to improve the growth of the company. The company’s offline channels match the company’s medium and high-end positioning, online channels are adjusted to improve operational efficiency, and the expansion of emerging platforms such as Tiktok and Kwai makes the brand reach more young consumers. We expect that the company’s EPS from 2022 to 2024 will be 0.70, 0.81 and 0.93 yuan / share respectively, corresponding to 30, 26 and 23 times of the current share price PE respectively. For the first time, give a “overweight” rating.
Risk tips
The company’s new product marketing progress is less than expected; The company’s channel expansion is less than expected; Industry competition intensifies; Repeated outbreaks, etc.
