日本狮王：近10 年战略聚焦“高价值”，价、利齐增有迹可循2012 年狮王提出“聚焦高价值产品、海外发展”的经营战略，通过在日本国内提升各类高价值产品占比、发展东南亚及中国的海外业务，营收实现正增，盈利能力显著提升。2018-2022 年狮王牙膏高价值产品销售额占比自25%提升至近45%，低价值产品占比则自30%降至18%左右。2010 年以来，狮王牙膏板块基本每年均有新品上市，新品单克重零售均价基本在6 日元/g（0.3 元/g）以上，而经典基础款零售均价则在2-3 日元/g（0.1-0.15 元/g）左右。狮王2012-2020 年经营利润中枢自3%左右显著提升至10%+，高价值战略对利增效果显著。Key points of investment:
Benchmarking overseas, China's toothpaste industry is gradually shifting from a “sharp increase in volume and price” to a “price increase”. It is time for domestic products to rise ① Industry trends: The mature toothpaste markets in the US and Japan have maintained steady growth in the middle to low single digits over the past 10 years, and price increases have been the main contribution. Retail sales of toothpaste in China have declined at the center of growth over the past 10 years, and industry growth has gradually transitioned from a sharp increase in volume and price. Compared with the US and Japan, there is room for doubling the per capita toothpaste consumption and retail unit price of Chinese residents. The upgrading of toothpaste functions is an important driver for increasing product value. Compared with overseas, there is still an opportunity to increase the proportion of toothpaste with good functions and high value toothpaste for comprehensive care, anti-allergy, and gum health in China.
② Competition pattern: Currently, there is no significant difference between CR3 and CR5 toothpaste companies in China and mature overseas markets, but in 2014-2023, the share of “domestic” toothpaste in China increased significantly from about 20% to about 40%, seizing the share of foreign investment. Furthermore, judging from the competitive structure of Japan and the United States, local companies have steadily taken the lead. As China's national brands continue to rise, it is expected that the future shift of the industry to a “dominated by domestic products” pattern will provide development opportunities for Chinese toothpaste brands.
Japan's Lion King: The strategy in the past 10 years has focused on “high value,” and there is a track record of price and profit growth. Following Lion King's 2012 business strategy of “focusing on high-value products and overseas development”, by increasing the share of various high-value products in Japan and developing overseas business in Southeast Asia and China, revenue has increased positively, and profitability has improved markedly. In 2018-2022, Lion King toothpaste's share of high-value toothpaste sales increased from 25% to nearly 45%, while the share of low-value products dropped from 30% to about 18%. Since 2010, the Lion King toothpaste segment has basically launched new products every year. The average retail price for a single gram of new products is basically above 6 yen/g (0.3 yuan/g), while the average retail price of classic basic models is around 2-3 yen/g (0.1-0.15 yuan/g). Lion King's operating profit center increased significantly from around 3% to 10% + in 2012-2020, and the high-value strategy had a significant effect on increasing profits.
Dengkang Dental: The “Cold Acid” brand has strong momentum. The product channel is moving upward. The company is controlled by the Chongqing State-owned Assets Administration Commission and is an established oral care enterprise. The core brand “Cold Acid” occupies the leading position in the field of anti-sensitive toothpaste with a share of about 60%.
① Product upgrade: In recent years, the company's product price band has been extended upward, driving an increase in gross margin.
Since 2020, the average price of the company's toothpaste has increased by 2-5% year over year, and total sales have increased in the middle to high single digits. The company's high-end “Medical Research” and “Specialized Research” series have increased exposure, and product upgrades have progressed in an orderly manner. Compared with the competitive price range of e-commerce platforms, we believe that in the future, the company's products will still have room to continue to expand to the middle and high-end price range of 0.15-0.2 yuan/g.
② Channel expansion: The company has implemented in-depth offline distribution, and its share has bucked the trend in recent years. 1H24's offline market share reached 8.6%, and the ranking rose to third; at the same time, under the trend of online toothpaste industry (40% + online share), the company actively grasped e-commerce dividends and laid out full-platform sales, and e-commerce channel revenue CAGR reached 53% in 19-23.
Profit forecasting and investment advice
We expect the company's net profit to be 0.16 billion yuan, 0.19 billion yuan, and 0.22 billion yuan respectively in 2024-2026, +13.8%, +18.4%, and +17.1%, respectively. The corresponding PE for 24 and 25 years is 30X and 25X, respectively, which is slightly lower than the average of comparable companies. Considering that the company relies on products and channels to gradually unleash growth potential, it has a certain brand premium as a must-choose consumer product, and is expected to achieve continuous profit growth over a long period of time, giving it a “buy” rating for the first time.
Risk warning
Market competition risk, brand image maintenance risk, sales model failure to adapt to market changes