Event: on August 26, the company released the semi-annual report of 2021. In the first half of 2021, the operating income was 1.856 billion yuan / + 2.83%, the net profit was 205 million yuan / + 36.64%, and the non-return net profit was 161 million yuan / + 30.31% per share, an increase of 21.43% over the same period last year.
Comments:
E-commerce retail contributes the main revenue, with higher-than-expected growth.
In the first half of 2021, the operating income was 1.856 billion yuan / + 2.83%, the net profit was 205 million yuan / + 36.64%, and the non-return net profit was 161 million yuan / + 30.31% per share, an increase of 21.43% over the same period last year. Q2 has an operating income of 1.100 billion yuan /-4.38%, a net profit of 161 million yuan / + 49.06%, a non-return net profit of 118 million yuan, and an EPS of 0.40 yuan per share. The decline in Q2 revenue is mainly due to the shift of some brands from buyout e-commerce retail business to brand marketing operation business with deduction commission as income.
Overall, e-commerce retail business still contributes to the main revenue, but the proportion has declined. H1 e-commerce retail business 1.714 billion yuan / + 0.22%, accounting for 92.37% mae 2.39pct; brand marketing operation services 102 million yuan / + 18.59%, accounting for 5.52%/+0.73pct, significantly increased; other business income 39 million yuan / + 385.05%, accounting for 2.11%/+1.66pct.
Multiple factors boost the level of gross profit, and profitability is greatly improved.
Some brands have changed from e-commerce retail mode to marketing operation service mode with higher gross profit, and higher gross profit margin of newly signed brands under e-commerce retail mode jointly promote the improvement of gross profit margin. In the second quarter, gross profit reached 449 million yuan / + 5.56%, gross profit margin 36.97%/+3.84pct.
The period cost is 310 million yuan /-7.36%, and the period expense rate 26.90%/-0.84pct is mainly due to the sharp decline in sales expenses. The sales expense is 259 million yuan /-9.61%, and the sales expense rate is 23.53%/-1.36pct. As the promotion cost under the brand marketing operation service mode is changed to be borne by the brand party, the proportion of this business model increases and reduces the overall sales expense rate; the management fee is 26 million yuan / + 15.41%, and the management expense rate 2.40%/+0.41pct The R & D cost is 3 million yuan / + 52.57%, and the R & D expense rate is 0.23%. The financial cost is-1.2 million yuan, and the financial cost is-1.6 million yuan in the same period in 2020. Q2 realized the return to the mother net interest rate 14.62%/+5.24pct, which was significantly optimized under the help of the improvement of gross profit margin and sales expense rate.
The number of cooperative brands is steadily increasing, and the business category continues to expand.
As of June 30, 2021, the company has continued to cooperate with more than 60 cosmetics brands, including Sulwhasoo, Yayang, Hou, Schwarzenegger, Furyanth and Orenasu, and introduced new brands such as Elemis and Ultima on overseas platforms such as Lazada and Shopee in the first half of the year. In addition to continuing to work hard in the beauty track, the company continues to develop new categories such as mother and baby, clothing, health products and accessories, and reached cooperation with new category brands such as Dumex (mother and child) on Tmall platform in the first half of the year, and newly signed high-quality customer resources. create a multi-category service matrix.
Actively expand channels, Douyin business performance is eye-catching
In the first half of 2021, the company expanded the operation and sales of Douyin, Vipshop Holdings Limited and other platforms. Among them, Douyin platform GMV is growing rapidly, and the company has partnered with beauty make-up brands including Carrie Group, Pierfarb Group and LG Group to operate its Douyin stores for brands such as Furyanz, Kate, Auri, Yayang and Fuludeya. In addition, new brands have been developed on the Douyin platform, including Chengano Doctor (skin care), Sangu (washing care) and other new brands. As of June 30, 2021, the company has operated 24 small Douyin shops.
In the first half of 2021, Shanghai Cosmetics Co., Ltd., a subsidiary of the company, was awarded the "Douyin ecommerce Brand Service provider of the year", and the company's Douyin operation ability was highly recognized.
Investment suggestion: the company's operating income from 2021 to 2023 is estimated to be 4.991, 57.47 / 6.505 billion yuan, and the net profit attributable to the parent is 4.18, 475, 538 million yuan, corresponding to a PE of 26.37, 23.20, 20.51x. Maintain the recommended rating.
Risk tips: brand category expansion is not as expected, emerging e-commerce channels are unfavorable, online flow dividends fade, industry competition intensifies.