The global wet wipes market has resumed upward, and the domestic market is growing rapidly
The epidemic has led to an increase in consumers' health awareness and hygiene awareness. The daily use of antibacterial and disinfectant wipes for surface cleaning and disinfection will become a long-term habit for some consumers, and antibacterial and disinfectant wipes will return to a normal level of growth in the future. Cosmetic wipes are mainly used in travel scenarios. Benefiting from the resumption of travel, cosmetic wipes will resume growth in 2023; at the same time, wet toilet paper will benefit from strong publicity on social media and e-commerce platforms, and is expected to maintain rapid double-digit growth in the future. According to Euromonitor data, the global wet wipes market is expected to resume growth in 2023, reaching a growth rate of 5.03%, and the domestic wet wipes market will reach 14.28 billion yuan, an increase of 13.05% over the previous year.
The recovery in demand is expected to drive the gradual recovery of the company's performance
The competitive pattern of the global wet wipes market is relatively stable, and well-known companies such as Kimberly and Johnson & Johnson occupy a large share of the market. The company has been manufacturing various wet wipe products for world-renowned companies such as Woolworths, Kimberly, Johnson & Johnson, L'Oréal and other world-renowned companies for many years, and has established long-term and stable cooperative relationships with customers. At the same time, the domestic wet wipes market is growing rapidly, and the company continues to expand new customers. Since this year, it has developed many customers such as Garan Group and Oriental Selection. Benefiting from the recovery of the wet wipes market, the company relies on customer advantages, and performance is expected to gradually recover.
Relying on customer resources to enter the cosmetics sector, it is expected to bring new growth. The company's main customer groups all include the cosmetics business. Relying on customer resources, the company's OEM mask business has also developed new domestic customers, and the overall business scale is growing. The joint venture jointly established by the company and Jiangsu Chuangjian is expected to obtain a Class II license at the end of June. It will rely on customer resources to explore the collagen market, which is expected to bring new growth to the company.
Company profit forecasting and valuation
The company's 2023-2025 revenue is estimated to be 7.34, 8.74, and 1,040 billion yuan, respectively; YOY is 10.00%, 19.06%, and 19.09%; EPS is 1.92, 2.29, and 2.67 yuan respectively. According to reasonable valuation estimates, combined with stock price catalytic factors, the company is given a target price of 46.08 yuan/share within six months. The company's valuation level is lower than that of comparable companies, giving the company a “recommended (first)” investment rating.
Investment risk tips
Technology development risk, raw material price fluctuation risk, high customer concentration risk, exchange rate fluctuation risk