\u3000\u3000 Syoung Group Co.Ltd(300740) (300740)
The company announced the performance forecast for 2021. The net profit in 2021 increased by 64% - 89% year-on-year and 23% - 74% year-on-year in Q4. The company continues to be driven by dual business, its own brand is constantly upgraded, and its agent operating brand expands more new customers on the basis of original old customers, so as to jointly drive the growth of the company and maintain the overweight rating.
Key points
The dual business model drives the company's performance to continue high growth. The net profit of the company in 2021 is expected to increase by 64% - 89% year-on-year to RMB 230-265 million; After adding back the equity incentive fee of 26 million yuan, the net profit reached 256-291 million yuan, exceeding the equity incentive target of the current year; In Q4 single quarter, the net profit increased by 23% - 74% year-on-year to 83-112 million yuan. The company adheres to the overall strategy of taking independent brand as the core and driven by both independent brand and agency business, continues to pay attention to the input-output ratio, and further balanced development of online omni-channel. Tiktok, the company's active layout, Kwai, and live broadcast channels are rising. In October, the GMV of the live broadcast channel was broken by 100 million, and the proportion of traditional electricity providers such as Tmall decreased. In terms of business, yunifang, the main brand, has gradually upgraded its brand, including new products of micro 800 and sales of more than 23 million on the opening day; The product structure of "little confusion" of cutting-edge brands was further optimized to help the gross profit margin rise; The company's agent brands grew rapidly, and Kiko and zelens increased by more than 300% in the first three quarters.
Independent brand: focus on product strength and promote brand upgrading. Since 2021, the company has broken away from the traffic playing method, focused on the long-term development of its own brand, timely followed up the demand changes of market consumers, adjusted the product structure, increased R & D investment, realized brand upgrading and won consumer recognition on the basis of strong product strength. In terms of specific brands, in 2021, the company reshaped the brands of its sub brands: small confusion, big water drop, VAA and HPH. At the channel end, the optimized layout of online Omni channels is realized. In the future, the company will continue to strengthen R & D reserves, improve product system, timely follow up the marketing mode of the market and increase brand promotion.
Acting brand: fully undertake international brand agency, with broad space. The company has China's global service capability, and has operated more than 16 brands on behalf of the company so far. We expect that the company will achieve rapid growth in the consignment business in 2021, of which Johnson & Johnson's business makes a significant contribution. In addition, the company also continues to expand other overseas brands, and it is expected that the agent operated brands can continue to achieve rapid growth.
Valuation
Under the current share capital, the earnings per share from 2021 to 2023 are expected to be 0.59/0.91/1.4 yuan respectively; PE was 29 / 19 / 12 times respectively, maintaining the overweight rating.
Main risks
New product expansion is less than expected; Blocked cooperation with international brands; Industry competition intensifies.
