\u3000\u3000 Shanghai Jahwa United Co.Ltd(600315) (600315)
Event: the company announced the announcement of pre increase of performance in 2021. It is expected to realize revenue of 7.66 billion yuan in 21 years, an increase of 9% at the same time, net profit attributable to parent company of 655 million yuan, an increase of 52% at the same time, deduct non net profit of 688 million yuan, an increase of 74% at the same time, and EPS of 0.62 yuan; Among them, it is estimated that 21q4 will achieve an income of 1.83 billion yuan, an increase of 9.8%, a net profit attributable to the parent company of 235 million yuan, an increase of 99%, and a deduction of 214 million yuan of non net profit, an increase of 79%. The company’s 21q4 performance greatly exceeded expectations, mainly due to the significant improvement of net interest rate due to cost reduction and efficiency increase.
Comments:
Led by e-commerce channels, focusing on beauty and skin care business, driving steady revenue growth. Under the guidance of the 123 strategic policy, the company continued to overcome the short-term negative impact of overseas business and special channel business in the second half of the year, led by e-commerce channels and focused on skin care products, and achieved positive growth in the fourth quarter. Among them: 1) strengthen the self broadcasting of tmall platform for online business, and actively promote the layout of multiple platforms such as jd.com, pinduoduo and interested e-commerce, so as to achieve rapid online growth in the second half of the year; 2) Actively develop new retail channels, and CS channels and Watsons have achieved rapid growth; 3) Focusing on skin care products and adhering to the differentiated development strategy, the skin care business has achieved rapid growth.
The rapid growth of high gross profit categories, channel operation optimization and other factors have led to a significant improvement in net profit margin. The company expects the annual net interest rate attributable to the parent company to be 8.6%, with a year-on-year increase of 2.4pct, of which the net interest rate attributable to the parent company in 21q4 is 12.8%, with a year-on-year increase of 5.8pct, the highest single quarter net interest rate in recent three years. The substantial improvement of the company’s profitability is mainly due to: 1) the rapid development of skin care products as a high gross profit business and the improvement of gross profit structure; 2) While tmall channel has achieved steady growth, it has reduced the proportion of super head live broadcasting and optimized the cost by increasing the proportion of self broadcasting; 3) Department store channels successfully improved profitability through counter optimization and online spa in the fourth quarter.
Exceeded the 21-year performance target of equity incentive twice. The company launched two phases of equity incentive: 1) in 2020, the incentive objects of restricted stock incentive are pan Qiusheng and other 139 people, corresponding to the 21-year revenue a / b goals of 8.3 billion yuan and 7.6 billion yuan respectively, and the 21-year net profit a / b goals of 410 million yuan and 480 million yuan respectively. This performance disclosure shows that the company has achieved the revenue end B goal and performance end a goal; 2) In 2021, for Pan Qiusheng’s stock option incentive, the corresponding 21-year revenue a / b targets were RMB 8.466 billion and RMB 7.752 billion respectively, and the 21-year net profit a / b targets were RMB 431 million and RMB 504 million respectively. This performance disclosure shows that the company has not completed the revenue end, and the performance end has completed the a goal.
We will continue to promote brand innovation and channel upgrading, maintain a high outlook for beauty and skin care, and look forward to the future. Since the new chairman took office, the company’s reform achievements have been gradually reflected, and steady progress has been made around the 123 strategy: 1) brand innovation, around the hit strategy, cooperate with tmall innovation center to enable new product development and popular models, and focus on top SKU; 2) channel is advanced, actively expanding channels, and cooperate with many spendthrones, good doctors, etc., to start private area traffic operation, set up flagship store, tiktok CS, etc. 3) operational innovation, optimizing marketing efficiency, putting indicators, tiktok, red book and friends circle to optimize the cost delivery efficiency. The beauty and skin care products of the company maintained a high landscape, and the adjustment of baicaoji, Yuze, Goff and other brands took effect. In the fourth quarter, the company achieved rapid growth in performance through category focus and channel operation improvement, and the future can be expected.
Profit forecast and investment rating: in the fourth quarter, the company’s revenue returned to steady growth in skin care category focus and channel continuous optimization operation, and its profitability improved significantly. We raised the performance forecast for 21 years. It is estimated that the company’s revenue from 2021 to 2023 will be RMB 7.661 billion (original forecast of RMB 7.861 billion), RMB 9.013 billion and RMB 10.346 billion respectively, The net profit attributable to the parent company was RMB 655 million (originally predicted to be RMB 509 million), RMB 769 million and RMB 1025 million respectively, and the diluted earnings per share were RMB 96 (originally predicted to be RMB 75 million), RMB 1.13 and RMB 1.51 respectively, with the corresponding valuation of 44.70 times, 38.11 times and 28.58 times, maintaining the buy rating.
Risk factors: the income of Yuze and other brands does not meet expectations; Organizational structure and brand adjustment did not meet expectations.
