Core ideas:
There is a strong demand for cosmetic e-commerce service brands. The consumer demand for cosmetics outperforms the market, and the online rate continues to rise. China's cosmetic brand e-commerce service market is vast, about 167 billion yuan in 2021, an increase of 36% over the same period last year; live streaming and short video e-commerce on the content platform starts, and brand services extend from Tmall platform to Douyin, Kuaishou Technology and other platforms to further expand market capacity.
Beauty beauty makeup focus on beauty category operation, for Tmall's first echelon service provider (six stars, a total of 11). By the end of 2021, the company has reached cooperation with more than 60 brands, including Sulwhasoo, Yayang, Hou, Schwarzenegger, Furyanse and Orenasu, with cosmetics as the core, through providing full-link integrated services and fine product operation. create explosive products and enhance brand image for partners. Since listing, the company has not chosen to aggressively increase the number of brands and coverage categories, more steady, pay attention to customer quality rather than quantity.
The proportion of distribution is higher than that of peers. In 2021, the company achieved revenue of 4.2 billion yuan, of which more than 90% came from the distribution model; the proportion of distribution decreased slightly in recent years, but it is still an important business model of the company. Under the distribution model, service providers take more responsibility for the sales results and share more benefits in the process of brand growth.
We will actively build an ecological service system for Douyin. The company actively arranges Douyin business lines. By the end of 2021, it has operated 33 Douyin shops, cooperating with brands such as Schwarzenegger, Furifang and Qiduo, and its subsidiary, Shanghai Celebrity, was awarded the "Douyin ecommerce Brand Service provider of the year" in 2021.
Profit forecast and investment advice: we estimate that the revenue of beauty makeup from 2022 to 2024 will be 43.7 million yuan and 4.91 billion yuan respectively, and the net profit of returning mother will be 4.3 million yuan and 490 million yuan respectively. Due to the repeated adverse effects of the epidemic on the supply chain and logistics in 2022, the company's performance is expected to be under pressure, but its leading position in the industry and the professional ability of services will not change, and the performance is expected to be repaired with the e-commerce industry after the epidemic. With reference to the comparable company valuation, the company was given a "buy" rating of 18x PE in 2022, corresponding to a reasonable value of 19.18 yuan per share for the first time.
Risk tips: brand cooperation and expansion risk, strategic investor reduction risk, inventory risk.