\u3000\u3000 Shanghai Jahwa United Co.Ltd(600315) (600315)
Performance overview: the revenue is slightly lower than expected, and the profit is much higher than expected
According to the company’s performance forecast, Shanghai Jahwa United Co.Ltd(600315) 2021 will achieve: 1) operating revenue of about 7.66 billion yuan, a year-on-year increase of + 9%; 2) The net profit attributable to the parent company was about 655 million yuan, a year-on-year increase of + 52%; 3) The net profit deducted from non parent company was about 688 million yuan, a year-on-year increase of + 74%.
Among them, Q4 achieved: 1) the operating revenue was about 1.83 billion yuan, a year-on-year increase of + 9.8%; 2) The net profit attributable to the parent company was about 235 million yuan, a year-on-year increase of + 99%; 3) Net profit deducted from non parent company was about RMB 214 million, a year-on-year increase of + 79%. The original estimated revenue of Shanghai Jahwa United Co.Ltd(600315) 2021 was 8.2 billion yuan, a year-on-year increase of + 17%. The announcement revenue was 7.66 billion yuan, which was slightly lower than the expectation; It was originally estimated that Shanghai Jahwa United Co.Ltd(600315) the net profit attributable to the parent company was 540 million yuan, a year-on-year increase of + 25%. The net profit attributable to the parent company in this announcement was 655 million yuan, a year-on-year increase of + 52%.
On September 15, 2001, the company gave equity incentive to pan Qiusheng, chairman and CEO. 1) Upper limit conditions: operating revenue of 8.47 billion yuan / 9.59 billion yuan / 10.81 billion yuan and accumulated net profit of 500 million yuan / 1.38 billion yuan / 2.6 billion yuan on 2021 / 22 / 23. 2) Lower limit conditions: the operating revenue is RMB 7.75 billion / RMB 8.77 billion / RMB 10 billion on 2021 / 22 / 23, and the cumulative net profit is RMB 430 million / RMB 1.17 billion / RMB 2.21 billion. Based on the performance forecast, in 2021, the income side was slightly lower than the exercise conditions, and the net profit exceeded by a large margin.
The net interest rate increased quarter on quarter, and the profitability improved significantly
Based on the company’s performance forecast, the annual net interest rate in 2021 was about 8.55%, a new high since 2015; Q4’s single quarter net interest rate was 12.84%, a new high since 16q2, with a year-on-year increase of 5.77pp. Since 21q2, the net interest rate in a single quarter has been 5.57% / 8.31% / 12.84% respectively, increasing quarter on quarter.
Brand based, channel overweight, digital boost
We judge that the improvement of the company’s profitability is mainly due to: 1) the proportion of skin care products with high gross profit has increased; 2) the proportion of super head has decreased due to the refined operation of e-commerce; 3) Offline department store channel counter closing optimization and online SPA have successfully improved offline profitability.
Brand: optimized structure and rich categories
1) in 2021, baicaoji will streamline the long tail SKU to create a head explosive. The Tai Chi series of new cream, cream, essence, new seven white whitening essence and peptide Anti Wrinkle Essence have been released, and won the TMIC new product innovation award and the seven Tmall gold makeup award. The proportion of high margin skin care products increased, significantly increasing the company’s comprehensive gross profit margin.
2) continue to promote the brand rejuvenation plan in 2021, in which Liushen and trendy IP tokidoki jointly launched the joint exclusive portable toilet water, and cross-border cooperation with Hennessy to launch the “toilet water cocktail”, which not only improves the exposure, but also promotes the rejuvenation of the brand
Channel: Overweight online, improve offline
1) e-commerce channels promote the layout of multi platforms. Tmall platform strengthens the layout of store self broadcasting, maintains steady growth and improves the operation capacity. Jd.com, pinduoduo and interest e-commerce platforms have achieved great growth. During the promotion of the Eleventh National Congress of the Communist Party of China, Yuze Omni channel increased by + 70% year-on-year; Qichu Omni channel + 25% year-on-year, of which JD / pinduoduo + 60% / 370% year-on-year; Diancui tmall flagship store increased by 5 times year-on-year.
2) actively expand new retail business, in which the department store channel has successfully improved its profitability through the optimization of counter closing and the online implementation of four seasons SPA; The traditional CS business and Watson business are advancing rapidly. Gough, Yuze, Qichu and other star brands were shortlisted for Watson HWB health and beauty award, and the market popularity continued to improve.
Digitization: self broadcast, customer acquisition, operation precipitation
1) client acquisition: reduce the proportion of super head and strengthen self broadcast touch. During the double 11 Festival, baicaoji launched the live broadcast room of Yanxi palace to create a new play method of “immersive palace drama with goods”, binding Gmv with the promotion of the protagonist. While seizing the minds of consumers, baicaoji strengthened the national product attribute of products through scenes with historical characteristics. The peak number of viewers in the live broadcast room reached 1022000, ranking the top 2 in the average number of online viewers in the live broadcast room of domestic brands. The successful practice of self broadcasting + tmall and other channels to reduce the proportion of super head may help to improve the profitability of e-commerce.
2) operation end: promote e-commerce full brand fine operation + private domain operation, accelerate powder addition and improve customer stickiness. Baicaoji official flag and Yuze official flag rank second and ninth in the list of double eleven member operation repurchase of tmall. As of 21q3, 1000 + communities and 450000 private domains have been transformed.
Profit forecast and valuation
The century old domestic product leader Shanghai Jahwa United Co.Ltd(600315) has deeply cultivated the beauty and daily chemical industry. The image of domestic products has been renewed for a long time and is determined to forge ahead in the new era. It not only tamps the R & D barriers, but also enriches the marketing methods and embraces the dividends of the times. After the new Chairman Pan Qiusheng took office, the company adhered to the 123 policy and achieved remarkable results in cost reduction and efficiency increase. It is estimated that the company’s revenue from 2021 to 2023 will be 7.66 billion yuan, 8.98 billion yuan and 10.36 billion yuan respectively, with a year-on-year increase of 9%, 17% and 15%; The net profit attributable to the parent company was RMB 660 million, RMB 830 million and RMB 1.06 billion respectively, with a year-on-year increase of 52%, 27% and 27%; EPS is 0.97, 1.23 and 1.57 yuan / share, corresponding to 39, 31 and 24 times of PE, maintaining the overweight rating.
Risk tips
1) the progress of building star single products did not meet expectations; 2) The risk of channel transformation, the slowdown of offline growth and the rapid iteration of online traffic and marketing methods; 3) Increased competition brought by high-end foreign brands and local cutting-edge brands
