Deeply cultivate oral hygiene and move into the field of oral health. The company has a long history of development. Its predecessor, Dalai Chemical Pancreatic Factory, was established in 1939. Since its establishment, the company has continued to strengthen the oral cleaning and care circuit business layout, continuously expanding its product matrix based on the main brand of Cold Acid. The main business segments include adult and child oral care, electric oral care, dental care and beauty care to achieve diversified category development.

In 2019-2022, the company's revenue increased from 944 million yuan to 1,313 million yuan, the CAGR was 11.6%, net profit to mother increased from 63 million yuan to 135 million yuan, and the CAGR was 28.7%. The performance increased steadily.

Segmented tracks continue to expand, and online channels are growing at a beautiful rate. In 2017-2021, the market size of the oral cleaning and nursing industry grew from 38.85 billion yuan to 52.17 billion yuan, with a CAGR of 7.7%; the future industry is mainly driven by the high-end upgrading of basic categories such as toothpaste and toothbrush, and the emergence of emerging segments such as mouthwash and electric toothbrushes to drive industry expansion; judging from channel development, e-commerce channels have become a new growth point in the industry, and the proportion of online channels rapidly increased from 16.2% to 24.0% in 2019-2021; judging from the competitive pattern, China's oral cleaning and nursing industry is fiercely competitive. According to Nielsen retail research data, the total market share of the top ten manufacturers in terms of omni-channel retail sales of toothpaste products in 2021 reached 75%.

The brand has been upgraded to a high-end level, and the product matrix continues to improve. From the brand side, Leng Sing Ling entered the toothpaste market with its differentiated anti-allergic function of “hot, hot, sour, and sweet, eat whatever you want”, and has been the leader in the anti-sensitivity segment for many years, with a stable offline market share of about 60%. In recent years, the company has evolved with the times, continuously promoted high-end and youthful brand upgrading, increasing the proportion of high-end products through brand renewal and functional upgrades, etc., and the sharp rise in volume and price of adult toothpaste products has driven revenue growth; from the product side, the company actively lays out children's oral care, electric toothbrushes, dental care and beauty care fields in addition to adult toothpaste and toothbrush products, and continues to broaden the product matrix and strengthen category diversification. New categories such as electric toothbrushes, dental desensitizers, and oral bacteriostatic creams contribute additional revenue through multiple e-commerce channels; from the channel side, the company distributes and distributes multiple e-commerce channels. Examples include offline retail terminals Extensive decline, creating channel barriers in third- and fourth-tier cities with a unique county development model. E-commerce channels benefit from growing interest in e-commerce revenue. It is expected that in the future, as the company increases investment in e-commerce platforms, the continued volume of e-commerce is expected to drive revenue growth.

Profit prediction and rating: The company has been deeply involved in oral hygiene care for decades, and has deep roots in oral care for adults. Its Cold Acid is the leading brand in the anti-sensitivity segment. Furthermore, the company is actively increasing the emerging circuit. Children's oral care, electric toothbrushes, dental care and cosmetic care have blossomed to create new growth poles, and the excellent operation of e-commerce channels such as Douyin has helped to expand rapidly. In 2023-2025, the company's revenue is expected to increase 5.0%/7.2%/14.8% year on year to 13.79/14.78/1,697 billion yuan, and net profit to mother will increase 8.0%/10.9%/18.6% year on year to 1.45/1.61/191 million yuan. The corresponding PE is 32.4x/29.2x/24.6x, giving the first coverage a “gain” rating.

Risk warning: Industry competition intensifies; new product development falls short of expectations; price increases fall short of expectations; industry development and data statistics risks.