Report released this week
Comments on Beijing United Information Technology Co.Ltd(603613) 2021 performance forecast: the annual net profit attributable to the parent company increased by about 88% year-on-year, and the e-commerce of industrial products continued to move forward
Comments on Milkyway Chemical Supply Chain Service Co.Ltd(603713) 2021 performance forecast: the annual net profit attributable to the parent company increased by about 47.5% year-on-year, in line with expectations
Industry view this week (this week refers to January 10 to January 16, 2022, the same below)
Cosmetics supervision has entered the 2.0 era, new regulations have been implemented one after another, and the Matthew effect of the industry is prominent. On January 1, 2021, the regulation on the supervision and administration of cosmetics was officially implemented, which is a comprehensive update of the regulation on the health supervision of cosmetics issued in 1989. After that, the supporting documents and normative systems of the industry have been gradually launched and implemented, involving cosmetic raw materials, testing, OEM, brand and other links, and the industry as a whole tends to be standardized and mature. At the same time, due to the improvement of R & D threshold and testing requirements, Matthew effect in all links of the industry is prominent.
Brand side: continue differentiation, pay more attention to basic R & D and special license application. The requirements of the new regulations for brands are mainly reflected in two aspects: (1) strict special license application. Cosmetics used for hair dyeing, perm, freckle whitening, sunscreen, anti hair loss and cosmetics claiming new effects are special cosmetics, which must be applied in strict accordance with the application for special cosmetics. The recent “377 incident” is the regulatory authority’s requirements for strengthening the application for special certificates. (2) Efficacy claims must have scientific basis. For products with different efficacy claims, different efficacy evaluation tests such as human efficacy evaluation, consumer use test and laboratory experiment shall be carried out according to the requirements. (3) Encourage basic research. The new regulations have more specific requirements for the filing and registration of new raw materials, and the brand has gradually changed from marketing driven to product driven, which is good for enterprises that pay attention to the development of new raw materials, skin texture and gene expression. (4) Strengthen product label management. The labeling information is required to be more comprehensive, and the content of no more than 0.1% is displayed as “other trace components”, so as to control false efficacy marketing.
Raw materials and OEM end: encourage raw material innovation, and the cost of OEM manufacturers is relatively under pressure. For the raw material side: the impact of the new regulations mainly lies in encouraging raw material innovation. Under the new regulations, the management mode of new raw materials has changed from simple “registration” to “combination of registration and filing”, so as to strengthen the incentive for raw material innovation. There is a two-year protection period after the approval of new raw materials, which will benefit raw material suppliers with strong R & D ability for a long time. For the OEM side: under the new regulations, the main responsibility of filing is emphasized, and it is required to set up a “quality and safety person in charge” with more than 5 years of production or quality and safety management experience to improve the overall threshold of OEM. At the same time, due to the rise of inspection cost, management cost and raw material cost, OEM enterprises are facing cost pressure, and some small OEM enterprises may be cleared.
Recommended targets: Yunnan Botanee Bio-Technology Group Co.Ltd(300957) , Proya Cosmetics Co.Ltd(603605) , Bloomage Biotechnology Corporation Limited(688363) , Fujian Green Pine Co.Ltd(300132) . Suggestions: Nanjing Cosmos Chemical Co.Ltd(300856) , Lushang Health Industry Development Co.Ltd(600223) .
Risk tips: intensified industry competition, less than expected consumption, international trade situation, rising raw material prices, etc.
