This report is read as follows:
The company is actively expanding new categories and channels, signing Jindawei, Pulse, Junlebao and other new brands; increasing investment in independent incubation brands leads to short-term profit pressure, but is expected to contribute new growth points in the long term.
Main points of investment:
Investment suggestion: the company continues to invest in incubating its own brands, and profits are under pressure. The EPS forecast for 2021-2023 will be lowered to 0.84 (- 0.06) / 1.08 (- 0.03) / 1.33 yuan, and the target price will be lowered to 33.60 yuan with reference to comparable company valuation to maintain the overweight rating.
The performance was slightly lower than expected as private brand investment was a drag on profits. The company's 21H1 realized revenue / return / deduction of non-net profit of 5.98Universe 0.431 million yuan, compared with the same period last year, + 7.81% Universe 5.81% Universe 19.34%, single Q2 revenue / homing 329Universe RMB 0.21 million, year-on-year + 2.55% Accord 26.73%. On the revenue side, retail / operational services / brand planning / channel distribution revenue year-on-year + 27%, 2%, 41%, 14%, accounting for 49%, 12%, 6%, 32%, and the distribution business continues to be under pressure. On the profit side, H1 gross profit margin is from + 2.91pct to 33.49% year-on-year, private brand investment increases the expense rate, sales / management expense rate is 18.16% and 6.13%, year-on-year + 3.13/2.03pct. Net interest rate year-on-year-0.95pct to 6.63% dint Q2 year-on-year-2.64pct to 6.35%. If the impact of private brand investment is excluded, H1 net profit is + 22% year-on-year, and non-net profit is + 11% year-on-year.
The company excavates the advantage brand and the channel dividend, horizontally expands the category, the channel. In terms of categories, maternal and child health products newly signed Jindawei, Food and Beverage signing Pulse, Junle Bao, six walnuts, beauty makeup and Amoy Pacific, Paula Zhenxuan, Biltixi and other brands to cooperate. In terms of channels, we will speed up the layout and investment in emerging channels such as Pinduoduo, Douyin and Kuaishou Technology.
Private brand blossoms are expected to contribute new growth points. Positioning a Hujiaqing blooming brand has grown rapidly, and the GMV of the whole network has exceeded 20 million in half a year. During the period of Tmall, the blooming brand ranked fifth and eighth in the categories of fragrant beads and underwear detergent.
Risk hint: market competition intensifies, marketing investment increases, and new brands are not as good as expected.