Introduction to this report:
The company's main brand, Winona, underwent a 2.0 strategic upgrade to expand Sensitive Skin Plus to open up brand improvement space. Recently, the upgraded version of Special Cream 2.0 was launched, which combined with the optimization of the company's organizational team, which is expected to drive performance improvement.
Key points of investment:
Investment advice: The company experienced a bottom adjustment in 2023, and performance is expected to improve after the 2024 brand repositioning. Considering the 23 Double 11 situation, the 2023-25 EPS forecast was lowered to 2.25 (-0.70) /2.94 (-0.76) /3.52 (-1.06) yuan. Refer to comparable companies to give 2024 30x PE, lower the target price to 88.2 yuan, and maintain an increase rating.
From “focus” to “specialized research,” Winona 2.0 is launched. The company's main brand, Winona, announced that it has entered the 2.0 era and repositioned itself as “specializing in sensitive skin”, expanding from the single-point “narrow” focus strategy of “Winona = sensitive skin” in the past to a multi-point sensitive PLUS strategy, covering benefits such as whitening, sun protection, and anti-aging, breaking through the second-level needs of sensitive skin users. On the product side, Winona has established four major products: special cream 2.0, barrier cream, whitening bottle, and sunscreen, and plans to launch a new anti-aging series of products in 2024 to build a rich matrix of PLUS products for sensitive skin.
Team adjustments were completed, and online operations were improved in January-February '24. The company made personnel and organizational adjustments in '23, and the online data improved in January-January '24 after the new team matured. According to Magic Mirror data, in January-January '24, Winona's Tmall + Douyin GMV was +36% year-on-year, and the growth rate picked up significantly. In March, the new special cream 2.0 is expected to drive continued growth, and the company's performance is expected to bottom up.
The company built a sub-brand matrix through endogenous and epitaxial expansion to reserve new growth poles. On the one hand, the company cultivates highly specialized brands through internal incubation, such as the professional baby skincare brand Winona Baby, and the high-end anti-aging brand AOXMED; on the other hand, through epitaxial acquisition of brands such as Za Ji Rui and Bomei, which position the popular price range and complement the company's core competencies, it has built a brand matrix covering skincare, makeup, mother and baby, and multiple price bands, which is expected to cultivate new growth poles.
Risk warning: The industry is slowing down, competition is intensifying; incubation of new products and sub-brands is slower than expected.