This report is read as follows:
The company set up its own e-commerce team, e-commerce operation capacity was significantly enhanced, and equity incentives inspired the potential of the team. E-commerce is expected to enable the rapid growth of new brands, online and skin care products are expected to significantly increase the share of revenue, accelerating the transformation to a cosmetics group.
Main points of investment:
Investment suggestions: e-commerce team in place, equity incentives neatly, e-commerce + new brands + new categories of three-dimensional driving performance to accelerate growth. It is estimated that the EPS from 2020 to 2022 will be 0.25,0.47,0.65 yuan, and the comparable company will give the target price 30 yuan, covering it for the first time and giving it an "overweight" rating.
The company has accelerated its strategic transformation from a daily chemical enterprise to an e-commerce-driven cosmetics group. The company has created the classic national daily chemical brands Lafang, Yujie, Meadows, etc., and established a leading position in the washing and care market. In recent years, the company has invested in a number of high-quality projects related to makeup and skin care, and accumulated experience in the operation of skin care products through overseas brand agents. The company began to build its own e-commerce team in 2018, and now it has built a professional team of nearly 100 people. With reference to Peraiya's reconstruction of the e-commerce team at the end of 2017, the online channel has ushered in three consecutive years of high growth, and the company's online strength has been enhanced, and e-commerce high growth is expected. Comprehensively accelerate the transformation from a daily chemical group to a cosmetics group.
Equity incentive landing, e-commerce + cutting-edge + imported three-wheel drive. The company plans to grant equity incentives to core managers and business backbones (35% of its midline employees). The performance evaluation target is that revenue in 2020 and 2021 will increase by no less than 0% and 33.16% compared with 2019. Among them, e-commerce revenue growth is not less than 66.67% and 347.15%, reflecting the determination of online high growth. On the basis of the steady growth of classic brands, e-commerce will focus on enabling cutting-edge brands T8, Ji Ante and imported brands, when the proportion of online and skin care products is expected to increase significantly.
The results of epitaxial investment are rich, and the release of synergy is expected. Through the industry fund, the company has invested in a number of high-quality content e-commerce, MCN and cosmetics brand projects. In the future, it is not only expected to produce synergy in new brand marketing and product development, but also reserve high-quality projects for extension development.
Risk hint: the execution of the e-commerce team is lower than expected, and the marketing effect of the new brand is not as expected.