Runben Co., Ltd.: The natural health brand image is stable, and the rich matrix and omnichannel layout are progressing steadily.
Since its establishment in 2006, the Runben brand has focused on the R&D, production and sales of products in the field of mosquito repellent and infant care. It is committed to creating a natural green brand image, deeply meeting the demands of the mosquito repellent and infant care market, compounding a continuous iterative product matrix and mature multi-channel operation system, and achieving steady growth in performance.
Baby care market: The market size is growing steadily, and domestic brands continue to gain strength. Young parents are improving their concept of refined childcare, and are increasingly pursuing multiple categories and high-quality child care products to promote the steady expansion of the infant care market. China's baby products market reached 36.3 billion yuan in 2022, with a CAGR of 13.4% in 2007-2022. It is expected that the CAGR will remain at 9.7% in 2027. Its Chinese product brand is gradually gaining strength, and its competitiveness and market share are constantly increasing.
Mosquito repellent market: The market is developing rapidly, and new products have more potential. China's huge population lays the capacity foundation for the mosquito repellent market. As outdoor activities increase, consumption levels increase, and emphasis on health deepens, new convenient, gentle, safe and green mosquito repellent products have ushered in development opportunities, driving steady growth in the scale of the industry. China's mosquito repellent market has reached 7.459 billion yuan in 2022, and the CAGR is 7.56% in 2017-2022. It is expected that the CAGR will remain at 6.40% in 2027.
Iterative innovation meets differentiated needs, and multi-channel collaboration drives performance growth. 1) In terms of product development, the company continuously enhances product advantages through green and minimalist product formulations and personalized product design to meet the pain points of consumers and meet the needs of multiple scenarios. Among them, large single products have outstanding performance, and product strength is recognized by the market. The company will accelerate the enrichment of product categories and deepen the “big brand and small category” strategy.
2) In terms of channel construction, the company has built an online-oriented omnichannel sales network. Among them, Tmall's basic market is stable, and the new Douyin channel is developing rapidly. The company widely reaches end customers and keeps up with changes in consumer trends, gradually forming a mature marketing and promotion system. In addition, the company actively expands offline channels and lays out overseas markets, and continues to broaden sales channels.
Investment suggestion: The company is deeply involved in the infant care and mosquito repellent circuit and gradually establishes a high-quality domestic brand image. The company will continue to promote product updates and iterations, accelerate the expansion of online and offline channels, and promote a steady increase in market share. Revenue for 2024-2026 is expected to be 1,334 million/1,675 million/2,046 billion, respectively, and net profit to mother will be 289 million/364 million/446 million, respectively. The corresponding PE is 27 times/22 times/18 times, respectively, maintaining the “buy” rating.
Risk warning: Market competition intensifies; consumption falls short of expectations; new product progress falls short of expectations; risk of relatively concentrated sales channels; performance forecasts and valuation judgments fall short of expectations.