\u3000\u3000 Shanghai Jahwa United Co.Ltd(600315) (600315)
Events
The company issued the announcement of annual performance increase in 2021, and it is expected to achieve a revenue of about 7.66 billion yuan (+ 9%) in 2021; The net profit attributable to the parent company is about 655 million yuan (+ 52%); The net profit deducted from non parent company is about 688 million yuan (+ 74%). In 2021q4, the revenue in a single quarter was about 1.83 billion yuan (+ 9.8%); The net profit attributable to the parent company is about 235 million yuan (+ 99%); The net profit deducted from non attributable parent company was about 214 million yuan (+ 79%).
Performance growth exceeded expectations and profitability improved
Focusing on the 123 strategic policy of “taking consumers as the center, brand innovation and channel upgrading”, the company has improved the company’s digital operation ability, reduced costs and improved efficiency, and the performance growth in 2021 is higher than expected. Skin care category, as a high margin and rapid development category positioned by the company, has an eye-catching performance. The net interest rate of the company in 2021 is expected to be 8.55% (YoY + 2.43pct); Q4 single quarter net interest rate is expected to be 12.84% (YoY + 5.77pct), and the company’s profitability has improved significantly.
Focus on skin care products and break the circle of head brands
By combing its brands, the company has determined a differentiated brand development strategy, focusing on the rapidly developing skin care categories. Among them, Yuze and baicaoji brands are outstanding. Yuze brand focuses on effective skin care, seizing the bonus of social media and live broadcast traffic, and fully consolidating the brand image with strong barrier repair ability. In 2021, the sales of Yuze entered the top 20 of Amoy skin care, which is expected to continue to grow. Baicaoji adopts cutting-edge Chinese herbal skin care to compete with international brands. Innovative marketing promoted the popularity and younger transformation of the company. In 2021, the eleven companies’ innovative voice tiktok was used in the live broadcast of the double voice company. The online number of live broadcast was extended by 50 thousand days, and the confidence of the brand recovery was enhanced. The online broadcast of the fifth days live broadcast was launched.
Promote multi platform layout online and expand new retail offline
Online, the company’s e-commerce channels promote multi platform layout with refined operation, and tmall platform layout store self broadcasting. Meanwhile, Jingdong, tiktok and other interest businesses are showing growth momentum. Among them, the GMV store climbed tiktok quickly, and the total GMV in the third quarter of 2021 was 20 million yuan. Offline, the company optimizes and adjusts traditional channels and actively expands new retail business. Among them, the department store channel has successfully improved its 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. In the first three quarters of 2021, the company’s new retail business achieved a year-on-year growth of 100%, accounting for more than 10% of China’s offline business.
Investment advice
The company’s brand building is changing from “multi brand” to “excellent brand”. Through “survival of the fittest”, the company tilts resources to products with large single products and popular characteristics, so as to achieve a win-win effect of natural drainage and performance growth. In cooperation with tmall innovation center, digital empowerment helps the company grasp the marginal changes of consumption trend and gain insight into new market opportunities. Make concerted efforts online and offline to create private traffic and enhance customer stickiness. We expect that the company’s EPS from 2021 to 2023 will be 0.97, 1.22 and 1.52 yuan / share respectively, corresponding to 42, 33 and 27 times of the current share price PE respectively. Maintain the “buy” rating.
Risk tips
New product promotion is not as expected; The progress of online channel expansion is less than expected; Industry competition intensifies; The epidemic situation is repeated.
