The impact of disinfectant wipes is nearing its end, and wet toilet paper is the key promotion direction. 1) The size of the disinfectant wipes market stabilized after experiencing explosive growth during the epidemic. The company actively adjusted its strategy, promptly reduced the value of production lines related to disinfectant wipes in '23, and maintained a high level of capacity utilization. The company launched lightly in '24, mitigating the impact of declining demand for disinfectant wipes through diversified product lines and market strategies, and is expected to return to the growth channel. 2) The company's strategy is to promote wet toilet paper. With the upgrading of consumption in the household paper category, the potential of the wet toilet paper market needs to be unleashed urgently. Currently, China's wet toilet paper industry is in the demand introduction stage, and there is plenty of room for improvement in the market. As one of the earliest manufacturers of wet toilet paper in China, the company takes advantage of the rapid development of this industry to further enhance its market share and profitability.
The mask and skin care sector is mainly OEM for overseas giants, and revenue has remained stable. The company's mask and hand and foot mask products are gradually maturing, and profitability is expected to increase further. The company is actively developing care products, and production capacity is still climbing. With the implementation of a natural care products project with an annual output of 3,000 tons, the company is expected to develop more high-end brand customers, driving a further increase in order volume. The company mainly uses the ODM/OEM model, and has high-quality and stable overseas customer resources. It is a long-term supplier to world-renowned companies such as Woolworths, Johnson & Johnson, L'Oréal, Clorox, 3M, and Beiqin, and has passed the certification of qualified suppliers for world-renowned enterprise customers.
Actively lay out and restructure medical devices such as collagen, and invest in incubating downstream brand companies. As demand for skin repair increases, the recombinant collagen dressing market size has grown significantly and is expected to grow to 25.5 billion yuan in 2027. The company and Jiangsu Chuangjian, a leader in recombinant collagen in China, jointly invested in the establishment of Anhui Jiechuang Medical Devices Co., Ltd., which is mainly used to register and develop products related to medical dressings. At present, Jiechuang Medical has obtained two Class II medical device registration certificates. Furthermore, the company cooperated with Takushi Investment to establish an industrial fund, which mainly invests in incubating downstream brand companies with high correlation with the company's main business, actively cultivating ODM customers and achieving a win-win situation.
Investment advice: We forecast the company's net profit to mother for 2024/2025/2026 to be 0.123/0.144/0.159 billion yuan, an increase of 6.9%/16.5%/10.9% year-on-year. Jieya Co., Ltd. is a leading manufacturer of wet wipe products in China. It has product, production capacity and customer advantages. The influence of disinfectant wipes is nearing its end. It is strategically developing wet toilet paper, and is deployed in fields such as front-end formulations for medical devices and cosmetics. It is expected to return to the growth channel. Covered for the first time, a “gain” rating was given.
Risk warning: risk of raw material price fluctuations; overseas customers account for a higher risk; risk of declining profitability due to increased sales expenses.