Core ideas:
Huaxi Biology is a diversified biotechnology company, covering raw materials, medical terminals, functional skin care products and other categories. 22H1's revenue from functional skin care products was 2.13 billion yuan, an increase of 77.2% over the same period last year, accounting for 72.5%, which is the main source of the company's performance growth.
This report focuses on its functional skin care business, first combing the development of the four brands, and then focusing on the future growth and profitability of the four brands.
The continuous growth of the brand comes from the support of science and technology at the bottom, and the ability to create large single products is excellent. The company's R & D expenditure rate has been basically maintained at more than 5% in the past three years, relying on two major technology platforms and six major R & D platforms to develop a variety of functional components, laying a solid product foundation for the brand to build large items. Run Baiyan positioning hyaluronic acid technology skin care leading brand, "water moistening times throwing" has developed to the third generation; Quadi positioning hard core anti-veteran master, "blue times throwing" to open the market space with ingredient innovation; Mabel focus on sensitive muscle repair, "emulsion mask" to explore the gaps in subdivision categories to achieve hospital-level care; muscle activity positioning fermentation + control, "brown rice milk" fine grinding brown rice fermentation process directly hits the oil skin care pain point.
Adjust the overhead cooperation strategy, vigorously develop Douyin self-broadcasting, profitability is expected to continue to improve. As the scale of each brand has gradually crossed the threshold of 500 million or 1 billion, the company has taken the initiative to reduce its dependence on overheads and pay attention to improving daily sales. We combed the situation of the four major brands stationed in the super live broadcast room during the four promotions in 21-22. In 22, there was no cooperation between run Baiyan and muscle activity, and the cooperation intensity of Quadi, Mabel and Li Jiaqi was basically the same as that in 21 years. In addition, the company attaches great importance to the layout of Douyin and other channels, strengthen self-broadcast construction, optimize talent cooperation, the first three quarters of 22 skin care plate sales rates lower than 21 years by about 4pp, there is still room for decline in the future, profitability is expected to further improve.
Profit forecast and investment suggestion: the development trend of the company's functional skin care business is good, the scientific research strength supports the long-term development of the brand, and the profit growth rate is gradually close to the income growth rate. It is estimated that the company's 22-24 return net profit will be 9.7,12.9 and 1.71 billion yuan, maintaining the company's reasonable value of 164.63 yuan per share. Corresponding to the 23-year PE of 61 times, maintain the "overweight" rating.
Risk hint. The prosperity of the cosmetics industry has declined; the growth rate of e-commerce has slowed down; and the market competition has intensified.