2022 年整体毛利率下降9.40pcts 至27.06%，主要系折扣促销力度加大所致。费用端，期间费用率为26.38%/+3.23pcts，其中销售/管理/财务/研发费用率分别为22.44%/4.53%/-0.60%/0.37%，同比+2.32pcts/+1.31pct/-0.40pct/+0.10pct，财务费用变动主要系汇兑损益所致。2022 年净利率转负为-4.42%/-14.28pcts。The company released its 2022 annual report:
(1) 2022: The company achieved operating income of 3,242 million yuan/ -21.98%, net profit of -139 million yuan/ -133.92%, and non-net profit of -172 million yuan/ -147.55%, the decline in revenue was mainly impacted by the epidemic, especially poor warehousing and logistics in Shanghai and surrounding areas from late March to the end of May; the profit side was mainly affected by adverse factors such as increased company discount promotion efforts and increased preparation for impairment; (2) Single Q4: The company achieved operating income of 11.43 billion yuan /- 30.87%, net profit of the mother - 101 million yuan/ -167.41%, net profit of the non-return mother - 115 million yuan/ -171.55%.
Increased promotion has led to a decline in gross margin.
Overall gross margin declined by 9.40pcts to 27.06% in 2022, mainly due to increased discount promotions. On the cost side, the cost rate for the period was 26.38% /+3.23pcts, of which the sales/management/finance/R&D expenses ratio was 22.44%/4.53%/-0.60%/0.37%, respectively, +2.32pcts/+1.31pct/-0.40pct/+0.10pct. Changes in financial expenses were mainly due to exchange gains and losses. Net interest rate turned negative in 2022 to -4.42% /-14.28pcts.
The performance of the Tmall platform is under pressure, and the results of expanding emerging channels have been highlighted.
(1) Looking at the business model, e-commerce retail business revenue in 2022 was 2,993 million yuan/ -22.69%, gross profit margin was 27.36% /-7.05 pcts; brand marketing operation service revenue was 114 million yuan/ -47.28%, gross profit margin was 62.34% /-20.10 pcts; more sales were carried out for inventory clearing companies, which brought in revenue from distribution and other businesses 133 million yuan/ +101.70%. Due to the inversion of prices and costs for some brands, gross profit margin was -9.85% /- 15.56pcts
(2) Looking at each platform, the company has been deeply involved in the Tmall platform for a long time, while continuously increasing its business development efforts for new platforms represented by Douyin. Affected by factors such as the disappearance of the overall traffic dividend and rising customer acquisition costs, the overall performance of the Tmall platform fell short of expectations. In 2022, the Tmall domestic platform/Tmall international platform achieved revenue of 2,722/083 million yuan respectively, -26.6%/-49.55% compared to the previous year; the growth performance of the emerging channel business was impressive, and other platforms (mainly Douyin) achieved revenue of 436 million yuan, +54.98% year on year. As of the end of the reporting period, the company operated 36 Douyin stores.
Three efforts are being made to increase brands, expand platforms, and expand categories.
(1) On the brand side: In 2022, cooperation was reached with brands such as Anshee Fengyin and Fiseran, and once again reached a strategic cooperation with Coty Group on Adidas Care, incubated their own brands such as Weaving Files, iBaymeng, BeiBiyou, and Xuhuan. The overall revenue of their own brands increased by more than 60% year-on-year;
(2) Platform side: Continuously optimize the channel layout represented by Kuaishou and Douyin, and revenue from the emerging channel business increased by more than 60% in '22;
(3) Category side: In addition to deepening the cosmetics category, it extends to various categories such as food, personal care, pets, etc., and introduces brands such as Quduoduo, Clubble, and Inpaite.
Investment advice:
Buy-A investment rating. We believe that as the company continues to expand new categories and brands on the basis of maintaining superior categories and brands, increases investment in emerging platforms, technology empowers to improve operational efficiency, and performance recovery can be expected. The company is expected to achieve revenue of 40.05/45.36/5.134 billion yuan from 2023 to 2025, compared to +23.54%/+13.26%/+13.19%, and is expected to achieve net profit of 2.70/3.43/414 million yuan. The year-on-year growth rates in 2024 and 2025 are +26.82% and +20.58% respectively. A target price of 21.41 yuan for 12 months was given, corresponding to 25xPE in 24 years.
Risk warning: risk of brand operating conditions, risk of high supplier concentration, risk of product quality control, etc.