\u3000\u3000 Shanghai Jahwa United Co.Ltd(600315) (600315)
Event overview: the company issued the announcement of performance increase in 2021. In the 21st year, the company is expected to achieve an operating revenue of about 7.66 billion yuan / yoy + 9%, a net profit attributable to the parent company of about 655 million yuan / yoy + 52%, and a net profit deducted of about 688 million yuan / yoy + 74%; Among them, single Q4 is expected to achieve an operating revenue of 1.83 billion yuan / yoy + 10%, a net profit attributable to the parent company of about 235 million yuan / + 99%, and a net profit not attributable to the parent company of about 214 million yuan / yoy + 79%.
The channel side is led by e-commerce business and the whole platform layout: the company takes consumers as the center and the channel side is led by e-commerce business to carry out multi platform layout. In particular, it achieved year-on-year rapid and healthy growth in the second half of the year. Among them, tmall platform maintained steady growth, and JD, pinduoduo and interested e-commerce platforms showed rapid growth. According to official “War newspaper”, Tmall rose by over 35% during the double eleven period, and the total channel of e-commerce increased by 38% compared with the same period, with a tiktok of 200%, and Yu Zhe brand entered the top 20 of the list of shaking.
Brand side focuses on skin care categories and multi brand development: the company focuses on skin care categories with high gross profit and high growth on the brand side, adheres to the common development of multiple brands and achieves good business results. In the 21 years of “double 11”, various brands have made brilliant achievements. According to the official “war report”, Yuze’s omni-channel growth has exceeded 70%; Diancui tmall flagship store increased by 5 times; In addition, Qichu Omni channel + 25%, including JD + 60% and pinduoduo + 370%. According to magic mirror data, Yuze’s annual sales of tmall exceeded 1 billion yuan in 21 years, with a year-on-year increase of more than 20%, and JD increased by about 90% year-on-year. The rapid growth of skin care business boosted the overall revenue of the company.
The proportion of online self broadcasting has increased and new retail has been expanded offline: in online business, the company has continuously optimized marketing methods, strengthened self broadcasting operation, and formed a live broadcasting matrix combining super head + middle waist KOL + self broadcasting. The proportion of super head in 21 years has decreased significantly compared with that in the middle of 20 years; Tiktok channels and live broadcast innovation, double eleven Herborist court style live broadcast attracted attention, brand only ten days in the tiktok broadcast domestic brands live online average TOP2. In the offline business, the company actively expanded new retail business and slowed down the impact of the decline of offline traffic on its main business; Department store channels have successfully improved profitability through counter optimization and four seasons spa online; CS (cosmetics store) channel has achieved rapid growth in both traditional CS business and Watson business.
The gross profit margin has been improved and the profitability has been significantly enhanced: the company adheres to the differentiated brand development strategy. As the high gross profit and rapid development category positioned by the company, the skin care category has achieved rapid growth and led to the improvement of the overall gross profit. The company’s q1-q3 gross profit margin in 21 years is + 62.8% / + 1.27pct year-on-year, and it is expected that the annual gross profit margin will maintain an increasing trend. It is expected to achieve a net interest rate of 8.55% / + 2.43pct in 21 years; Single Q4 is expected to achieve a net interest rate of 12.84% / + 5.77pct. Thanks to the growth of gross profit margin, the sales expense rate decreased, the proportion of online self broadcasting increased, the operation continued to optimize, and the profitability of the company was significantly enhanced.
Investment suggestion: focusing on the “123” business strategy, the company has continuously improved its brand and channels, sustained and stable revenue growth and high profit growth. It is expected that in the future, the company will continue to carry out multi platform layout, optimize the live broadcast matrix and realize the healthy growth of the brand. We are optimistic about the company’s business development. It is expected that the company will achieve revenue of RMB 76.6/93.8/10.7 billion and net profit attributable to the parent company of RMB 655 / 831 / 1093 million in 21-23 years, with a year-on-year increase of 52.3% / 26.9% / 31.4% respectively. The corresponding P / E is 39 / 31 / 24x, giving a “recommended” rating.
Risk tip: macroeconomic growth is declining, channel reform is accelerating, and the cultivation of new brands is not as expected
