The Marumi brand regained its rapid growth rate, and the Koiwa brand gained momentum. In '23, the company actively promoted online channel transformation. According to the 23-year performance forecast, the main brand Marumi's e-commerce revenue for content represented by Douyin increased by more than 100%; PL Love Fire's revenue increased by more than 100% in '23. Pallet optimization and large single product strategies drive an increase in gross margin. Companies in the recombinant collagen sector have also continued to break through and plan a ten-year development blueprint, and the potential is promising. 23Q1-Q3, the company's revenue yoy 25%/34%/46%, accelerated quarter by quarter, and gross margin improved quarter by quarter. According to the performance forecast, the company expects 23Q4 to deduct net profit of 62.93 million yuan to 92.93 million yuan, yoy 34.74%-98.98%. We also expect net interest rates to increase month-on-month in Q3. Considering the results of the company's channel transformation, the 23-25 EPS was raised to 0.78/1.13/1.50 yuan (previous value: 0.73/1.00/1.24 yuan), compared to the company's 24-year Wind's consistent profit forecast 21 times. The results of the company's online channel transformation continued to show, giving 30 times PE in 24 years, and a target price of 33.90 yuan (previous value 26.28 yuan) to maintain an increase in holdings rating.
The Marumi brand regained a relatively rapid growth rate and insisted on both online and offline products
Marumi's e-commerce revenue, represented by Douyin, increased by more than 100% in '23. According to Magic Mirror, the 23Q4 Marumi brand Taoxi/ Douyin GMV was 2.31 billion yuan, Yoy 38.91%/154.56%, continuing to grow rapidly.
The Marumi brand channel side adheres to both online and offline products, focusing on the Crystal Series, Recombinant Collagen Series, Polypeptide Series, Elastin Series, etc., with a customer unit price of 300-500 yuan, mainly targeting people aged 35 and above in the third- and fourth-tier cities; online promotion of large single product strategies, Xiaohongbi Eye Cream, recombinant Double Collagen, and Xiaojin Needle Retouch Essence are outstanding. The customer unit price is 200-300 yuan, mainly for 25-35 year olds. The Marumi brand has already made a quantum breakthrough in the assets of the Douyin 5A crowd, laying an important foundation for continued growth in the future.
The second brand, Love Fire, has maintained a rapid growth trend. It is expected that the makeup brand PL Love Fire has performed excellently since its renewal in June 2021, with 23H1 revenue of 307 million/yoy 211.42%. According to a specific target research meeting on January 8, the PL brand is positioned in the makeup category. The customer unit price is 100-200 yuan, and exquisite white-collar workers aged 25-35 are the main consumer group. It is expected that it will continue to grow in the future, with the goal of becoming the first tier of base makeup. PL's two product lines are invisible and non-removable series for dry and oily skin. Each series is also divided into foundation, primer, air cushion, powder, concealer, etc.
In '23, H1 Love Fire launched the “Unbreakable Series” 2.0 product, H2 launched the “Invisible Series” 2.0, and collaborated with the famous anime IP NANA for the first time, and continued to update new products. According to the Q3 performance conference in '23, PL brands may launch color products in the future, but they will still focus on base makeup.
Pallet optimization/cost reduction and efficiency. In the first three quarters of 23, gross margin improved quarterly, pallet optimization and gross margin optimization. The average price of 23Q3's eyes/skincare/cleanser/beauty products increased 7.71%/35%/31.6%/28.78% respectively compared to 22Q3, and the 23Q1-Q3 company's gross profit margin was 69%/71%/72%, which also improved quarterly.
Risk warning: Online sales expenses are rising rapidly; key personnel are being lost; market competition is intensifying.