Event
The company released its three-quarter report in 2022, with revenue of 2.098 billion yuan (- 16.10%) in the first three quarters, net profit of-39 million yuan (- 114.80%), and net profit of-58 million yuan (- 128.56%). 2022Q3 realized revenue of 541 million yuan (- 16.15%), net profit of-45 million yuan (- 179.80%), and non-return net profit of-44 million yuan (- 206.82%).
Under the influence of the epidemic, the operation is under pressure, and the impairment of inventory is a drag on the performance.
2022Q3 revenue decline is mainly due to the overall macroeconomic slowdown and the repeated impact of the epidemic, consumer demand for cosmetics. 2022Q3 gross profit margin is 25.17% (- 15.65pct), mainly because the company has increased sales discounts. From a business point of view, 2022Q3 e-commerce retail business achieved revenue of 492 million yuan (- 17.65%), gross profit margin of 25.59% (- 11.55pct); brand marketing business revenue of 21 million yuan (- 35.18%), gross profit margin of 46.83% (- 31.61pct), other business revenue of 29 million yuan (+ 77.25%), gross profit margin of 1.96% (- 10.31pct).
The sales expense rate of 2022Q3 is 29.4% (- 3.4pct) and the management expense rate is 7.7% (+ 3.9pct), mainly because the one-time amortization amount corresponding to the unlocked part of the 2021 restricted stock incentive plan is included in expenses, and the proportion of asset impairment loss to income is 3.7% (+ 3.1pct), mainly because the company's provision for inventory depreciation increased by 363.65% compared with the same period last year. 2022Q3 net interest rate is-8.60% (- 17.28pct).
Actively expand emerging platforms and create new growth points
The company mainly operates on Tmall platform. 2022Q3 Tmall platform adds 5 new distribution stores, 3 agency stores, and closes 1 distribution store. With the rise of content e-commerce and live streaming e-commerce, the company continues to increase investment in emerging platforms such as Xiao Hongshu, Kuaishou Technology and Pinduoduo. 2022Q3 has added one Douyin store and five Kuaishou Technology and other platform stores. 2022Q3 Tmall's domestic revenue is 425 million yuan (- 19.75%), Tmall International revenue is 15 million yuan (- 47.84%), Tmall platform revenue accounts for a total of 81.3% (- 5.2pct), other platforms revenue 101 million yuan (+ 16.31%), revenue accounts for 18.7% (+ 5.2pct).
Investment suggestion
In the short term, the epidemic in 2022 repeatedly led to the disruption of the company's supply chain, logistics and operating pressure.
In the medium to long term, the company will actively expand Douyin, Little Red Book and other emerging platforms, build its own brand, expand food, services and other categories, and is expected to achieve steady growth. We estimate that the company's EPS in 2022-2024 will be 0.39,0.87,1.04 yuan per share respectively, and the corresponding share price PE will be 31,14 and 12 times respectively, maintaining a "buy" rating.
Risk hint
Category expansion is not as expected; industry competition intensifies.