\u3000\u3000 Yunnan Botanee Bio-Technology Group Co.Ltd(300957) (300957)
Ten years of accumulation and channel changes have helped Winona become the first brand of sensitive muscle in China. The company’s core brand Winona has achieved rapid development after being incubated by the pharmaceutical group, injected into Yunnan Botanee Bio-Technology Group Co.Ltd(300957) and supported by capital. At present, it has surpassed many foreign brands and become the leader of China’s dermatological skin care market, with a market share of 21.3% in 2021. The changes of consumer groups and consumer behavior preferences provide opportunities for the rise of domestic products. The long-term accumulation of the brand has created a strong product power. At the same time, the company seizes the bonus of channel reform to overtake at the curve.
Industry expansion provides sufficient development space for the company. China’s functional skin care industry has entered a period of rapid development and the rise of domestic brands. In 2019, the market scale of functional skin care products and skin grade skin care products reached 28.36 billion yuan and 15.54 billion yuan respectively, with a year-on-year increase of + 33.27% and + 38.5% respectively. The increase of skin problems, the expansion of sensitive muscle population and the improvement of consumers’ demands for efficacy will jointly drive the improvement of industry penetration. In 2020, the penetration rate of Dermatology grade skin care products in China was 7.1%, while that in France, Germany and the United States reached 45%, 20% and 17% respectively, with huge growth space. At the same time, the trend of increasing consumers’ recognition of domestic products will continue, and the expansion of efficacy skin care industry will provide sufficient development space for the company.
The company continues to consolidate its competitive advantages in technology, products and channels, enjoy the growth dividend of the industry and ride the wind and waves. Based on the research and development of Yunnan Plateau Characteristic plants for a long time, the company has formed a differentiated competitive advantage in terms of composition and efficacy. The R & D cost rate is higher than the overall level of the industry, and the relevant technical support is deep. Yunnan Yunke characteristic plant extraction laboratory is expected to enable the company’s R & D and new business development. The brand has cultivated a number of star large items, and SKU is expected to continue to expand. The brand does not adopt the traditional low price competition strategy of domestic products, but relies more on strong product strength to achieve market share, and the repurchase rate is as high as about 30%. The company has opened up highly specialized cinema channels. In the future, OTC and specialty store channels will become the focus of the company’s offline expansion and the driving point of revenue growth. The company has rich experience in the operation of traditional e-commerce channels, embraces new channels and new marketing, quickly breaks the circle, and actively opens up private traffic and Wuxi Online Offline Communication Information Technology Co.Ltd(300959) integration. The growth potential is expected to be further released.
Profit forecast: the efficiency skin care track continues to have a high boom, and the expansion of the industry provides development space for the company. The company has strong competitiveness in products, brands, technologies and channels, which have been verified by the market. In the future, the company will continue to consolidate its competitive advantage and enjoy the growth dividend of the industry. It is estimated that the company’s net profit attributable to the parent company from 21 to 23 is 807, 1131 and 1515 million yuan, and EPS is 224, 314 and 421 yuan. Corresponding to 21-23 years, PE is 72, 51 and 38 times. “Strongly recommended” rating for the first coverage.
Risk tip: the incubation effect of new brands is less than expected, new industry regulations and policies change, and market competition intensifies
