This report thoroughly analyzes the current market and future trends in the skin care industry, and conducts a multi-dimensional analysis of Zierjia product development, production, and sales. It is believed that Zierjia's leading position is stable and that its market share is expected to continue to rise.

Originally from a pharmaceutical company, Shierjia has good development genes. It has gradually become a leading medical dressing company with a high growth rate, and the path to listing is progressing steadily. Shierjia was divested from Huaxin Pharmaceutical in 2017 and operated independently in the form of a company. After 5 years of integrated development, completed the integration of product lines and industry chains, and started the path of integrating the industrial chain to lay out the skin care market, it is now gradually entering a good situation. The products sold as of Q3 2022 are divided into two categories: medical devices and cosmetics, with a total of 49 SKUs. Revenue from 2018 to 2021 grew rapidly, from $370 million to $1.64 billion, with a CAGR of 64.08%; net return profit increased from 199 million yuan to $806 million, with a CAGR of 59.23%. The company's equity incentives are in place, deeply tied to the interests of core employees; executives have medical-related professional backgrounds and carry out refined and professional management of the team and business.

The rise of the medical and aesthetic industry and diverse skin problems are driving the continuous expansion of the market scale. The professional skin care business has broad development space, and the boom in medical dressings is leading the market. According to different regulatory categories, professional skin care products can be divided into makeup/special functional skincare products and medical device dressing products. According to the prospectus, the market size of basic skin care products and the market size of professional skin care products in 2021 were 2857/33.8 billion yuan respectively. The CAGR for 2017-2021 was 13.91%/33.01%, and the professional skin care market size growth was outstanding. Among them, the medical dressings market is: (1) on the demand side: after light medical art+high demand for functional skincare plus a high repurchase rate; (2) on the supply side: high profitability attracts more brands to lay out the market. The two are jointly driven by leading industry growth. In terms of concentration, the patch medical skin repair dressing market shows a high concentration far exceeding that of the cosmetics industry. The core ingredients revolve around hyaluronic acid and collagen. As an enterprise that uses hyaluronic acid as the main raw material, Zierjia accounts for nearly 40% of the market share of the patch dressing market, with a remarkable leading edge.

Strengthen competitiveness in multiple dimensions of products, channels, and marketing, and continue to strengthen brand awareness and forge the leading position of enterprises. (1) Large products build brand power, and the product matrix continues to be rich. Zierjia's core products are white film and black film. The two major products drive the company's medical device business market position to continue to rise. In 2020, Zierjia's market share of medical device adhesive dressing products reached 25%. Furthermore, the company continues to strengthen product matrix construction. Driven by strong brand power, diversified products continue to expand. (2) In-depth offline layout, online multi-platform access. The company attaches great importance to the offline layout. Through the three models of buyout distribution, affiliate distribution, and channel distribution, it has achieved a multi-level and multi-dimensional terminal sales pattern covering medical institutions, beauty institutions, and cosmetics franchise stores. Online has been implemented into terminal consumption scenarios through diverse methods such as direct sales and distribution. B2C platforms such as Tmall, Xiaohongshu, Koala Shopping, JD, Douyin, Kuaishou, and Pinduoduo have all set up official self-operated flagship stores to achieve full coverage of online sales platforms. (3) Multi-dimensional accurate marketing layout to maintain strong brand power. The company has a multi-level promotion matrix, from traditional media, new media, mobile devices, public accounts to mini-programs, etc., to achieve brand promotion from breadth to accuracy. Under precise marketing, brand awareness is efficiently enhanced, and the sales rate is far lower than that of comparable companies.

The integrated layout of the industrial chain strengthens competitiveness in multiple dimensions, and future growth can be expected. (1) Extend to the front end to strengthen R&D capabilities. Shierjia completed the vertical integration of the industrial chain, controlled product quality and consolidated the R&D foundation through a self-production model; at the same time, through exclusive cooperative raw materials, patented formulations, and basic research, etc., it sought breakthroughs and enriched technical reserves to meet the diverse needs of consumers; (2) Multiple platforms worked together to continuously enhance brand power. Through a multi-level, multi-dimensional, and diversified promotion matrix, Shierjia continues to upgrade its brand influence; with increased brand power, multiple channels are working together, and the online layout drives long-term development. (3) Raise capital to help strengthen production+research+promotion in multiple dimensions. Shierjia's fund-raising plan is to invest in production base construction projects, R&D and quality inspection center construction projects, and brand marketing and promotion projects to form a multi-dimensional strengthened strategic layout for production, R&D, and promotion, and further consolidate the company's core competitiveness.

Investment suggestions: In terms of short-term and long-term development of functional skincare products and medical device dressing products, the boom continues to rise. The brand power of Shierjia has been verified by the market, and R&D capabilities continue to increase. It is expected that its market share will continue to increase in the future. It is recommended to focus on it.

Risk warning: new product development falls short of expectations; industry competition intensifies; product safety risks; fund-raising projects fall short of expectations