Investment advice: the market has doubts about whether the adjusted revenue of Beinmei can return to growth. We believe that Beinmei brands and products have high potential energy, and that the adjustment in the past is mainly due to internal friction in management, leading to confusion in the channel terminal. however, as the founder returns to management and changes the internal management organization, the new retail strategy is expected to rationalize the channel to boost revenue and reduce fees to increase efficiency under the reform strategy. The profit side is also expected to recover gradually. The industry end shows the trend of high-end and channel sinking, domestic brands are expected to take advantage of mother-to-child channels to increase market share, there are iterations in the competition pattern of the milk powder industry, and Beinmei still has the opportunity to return to the first echelon at the end of the industry. It is estimated that the EPS in 21-23 will be 0.11,0.20,0.30 yuan per share respectively, corresponding to the 51X PE in 2021, which will be given a "buy" rating.

The industry shows the development trend of high-end and channel sinking, the competition pattern has a natural iteration, and the big domestic brands still have a chance to break through. At present, the infant milk powder industry has entered a late stage of development, the quantity of newborn babies is expected to maintain a downward trend, and the upgrading of high-end products still has a certain driving force. At the channel end, mother-and-child stores have gradually become an important sales channel, accounting for a high proportion in third-and fourth-tier cities, and domestic brands have the advantages of customer service in mother-and-child channels. Under the influence of the short-term epidemic, the market share of foreign brands has declined, and long-term domestic brands are expected to increase their market share by virtue of their channel advantages in low-line cities. At the end of the competition pattern, due to the natural change of the target consumers of infant milk powder for an average of about three years, the competition pattern of the industry is not stable for a long time. Compared with the competition pattern of the industry in 2010 and 2020, the echelon of big brands has changed greatly, so there is still a chance for domestic brands to break through at the end of the industry.

Beinmei product brand has a certain competitive advantage, after the channel is straightened out, it can still be expected in the future. The company's product matrix basically covers the mainstream price belt, product research and development strength is strong, the number of registered formulations is in the forefront of the industry, and the product reputation is high. Brand positioning "parenting expert", establish emotional connection with consumers, high brand awareness, the company's brand is not involved in major food safety events in the industry, 29 years of precipitation to build a brand high potential energy, side proof of the company's strong product power. With the adoption of the new retail strategy at the channel end, the effect of consumer touch is good, which is expected to improve the channel efficiency and straighten out the channel.

The founder reopened the market, improved management, reduced fees and increased efficiency, and performance is expected to pick up. To investigate its essence, the company has gone through adjustment mainly for management problems, and transmission to the channel finally affects terminal sales, while as the milk powder industry enters the later stage of development, the core of consumers' purchase concern is still product power and brand power. the company has advantages in products and brands, and is optimistic that its channels will be straightened out and the lost territory will be gradually recovered. After the founder returns to the management, the internal organization and management will be reformed, and the profit side is expected to recover gradually.

Stock price catalyst: new product sales exceed expectations; channel development exceeds expectations.

Risk factors: Channel straightening does not meet expectations; industry price war risk; food safety issues.