This week's view
On January 13, the Tariff Commission of the State Council issued an announcement on the implementation of the agreed tariff rate of the regional comprehensive economic partnership agreement (RCEP) on some imported goods originating in South Korea. From February 1, the tariff of facial cleanser, soap (except laundry soap), toothpaste, mouthwash and other products imported by China from South Korea will be reduced by 1% - 1.5%, and the tariff will be cleared in the next ten years (2031). In addition to the above products, China's imports from South Korea and Japan, such as cosmetics, skin care products, perfume, shampoo and other products, maintain the current 10% benchmark rate unchanged. In addition, the Australian and ASEAN member countries' perfume imports to China will be reduced to 10% from 3%, while lip and eye cosmetics will be 10% to 5%, shampoos from 6.5% to 3%, and toothpaste, cleansing cream and other categories have been exempt from customs duties. However, according to China's tariff commitments form, China's origin is China's perfume, lipstick, eye shadow and other products. The duty to export to Korea is reduced from 6.5% to 6.1% and will be cleared in 15 years. In addition, according to the Australian tariff commitment form, Australia has abolished the customs of China's perfume, lip makeup, eye makeup and shampoo this year (originally 5%). Malaysia also abolished the duty of China's perfume and eye makeup (originally 10%).
We believe that with the entry into force of RCEP, on the one hand, the competition in China's cosmetics market will further intensify, on the other hand, it also provides an opportunity for Chinese cosmetics to go abroad. We recommend Yunnan Botanee Bio-Technology Group Co.Ltd(300957) , Bloomage Biotechnology Corporation Limited(688363) , Shanghai Jahwa United Co.Ltd(600315) and Proya Cosmetics Co.Ltd(603605) with strong brand strength, R & D strength and marketing strength. In addition, we recommend Imeik Technology Development Co.Ltd(300896) which has strong R & D strength and gradual expansion of product matrix, and Lancy Co.Ltd(002612) and Huahan plastic surgery, which have rapid expansion of offline stores and pay attention to medical risk control. It is suggested to pay attention to Yonghe medical, the leading enterprise of planting, breeding and hair fixation, which is currently undergoing chain expansion nationwide.
Market performance
This week, the retail trade (CITIC) index closed at 4047.61, down 0.85%, down 1.11% since the beginning of the year. The performance of the sector outperformed the CSI 300 in one week.
Company announcement
[ Fujian Green Pine Co.Ltd(300132) : Announcement on the acquisition of utility model patents by wholly-owned subsidiaries]
[ Syoung Group Co.Ltd(300740) : 2021 annual performance forecast]
Risk tips
The epidemic situation is repeated, the consumer demand is lower than expected, and the industry competition is intensified.
