Introduction to this report:
The company has accelerated its strategic transformation and achieved a high increase in e-commerce channels. At the same time, the company has acted and invested in various beauty and medical aesthetic projects such as Riboxi, VNK, Medical and Aesthetic International, etc., and multiple business development can be expected.
Key points of investment:
The investment recommended that the company actively carry out channel and brand strategy transformation, but considering the continued investment of sales expenses during the transition period, lower the 2022-2023 EPS to 0.33 (-0.43) /0.37 (-0.59) yuan, and give the 2024 EPS forecast 0.43 yuan. Referring to the PS valuation of comparable companies, the target price was lowered to 17.41 (-7.68) yuan to maintain the increase rating.
The performance fell short of expectations, and the investment of expenses greatly reduced profitability. The company's revenue/net profit attributable to the mother in 2021 was 1,101/069 million yuan, +11.91%/-40.98% year-on-year, -96.7% after deducting non-net profit of 0.3 billion yuan. Non-recurring profit and loss mainly held income of 6.53 million yuan from changes in the fair value of unlisted shares. 2021Q4's revenue/net profit attributable to the parent company was 335.070 million yuan, compared with +1.17%/-80.6% year on year. Increased cost investment reduced profitability. The company's gross margin increased by 5.68pct to 54.05% in 2021, mainly due to brand and product structure optimization; sales expense ratio +11.85pct to 44.06%, mainly due to increases in sales promotion expenses, e-commerce platform expenses, etc. during the period; management expenses were +0.9pct to 5.94%. The 2022Q1 company's revenue/net profit of 201 million yuan was -18.14% compared to the same period last year, and the net profit returned to the mother/after deducting non-net profit was -0.3 billion yuan. It is expected that offline channels will decline sharply due to the impact of the epidemic.
The growth rate of e-commerce channels is impressive, and the effects of channel adjustments are showing. The company's e-commerce and retail channel revenue was 336 million yuan, +51.06% year on year, and the revenue share rose to 31%; distribution and supermarket channel revenue was 594 million yuan and 168 million yuan, +0.13% and +1.04% year on year. The effect of channel strategy adjustment was outstanding.
Brand matrix construction continues to gain strength, and Ripplex and VNK are growing brilliantly. On the brand side, “Lafang” and “Yu Jie” are still the company's brand pillars, with revenue of 757 million yuan, accounting for 68.78%; the revenue of the agency import brand “Riboxi” was 47 million yuan, an increase of 84.27% over the previous year; the integrated brand “VNK” achieved operating income of 99 million yuan, an increase of 315.75% over the previous year.
Risk warning: Industry sentiment is declining, market competition is intensifying, and new brand development falls short of expectations.