Shanghai Jahwa (600315) Company Dynamic Comment: Herborist steadily improves its mid- to long-term value
Event: The company released the third quarter report of 2019, and the first three quarters of 2019 achieved operating income of 57.
3.5 billion US dollars, an annual increase of 5.
81%, achieving net profit attributable to shareholders of listed companies.
40,000 yuan, an increase of 19 in ten years.
09%, net profit attributable to shareholders of the parent company after deduction.
80,000 yuan, an annual increase of 2%.
The basic return is 0.
Revenue in the first three quarters increased by 5.
81%, Q3 sales and other expenses and non-recurring gains and losses caused changes in performance: the company’s first three quarters of 2019 revenue 57.
35 ppm, a five-year increase of 5.
81%; net profit attributable to mothers was 54 million yuan, an annual increase of 19.
09%; net profit deducted from non-attributed mothers3.
80,000 yuan, an annual increase of 2%.
The company achieved revenue of 18 in 杭州桑拿网 the third quarter alone.
13 ppm, a 10-year increase3.
28%; net profit attributable to mother is 0.
96 trillion, down 29 a year.
55%; net profit attributable to non-attributed mothers1.
1.9 billion, a decrease of 11 per year.
Q3 performance improved, mainly due to the increase in sales and other expense ratios and net loss from changes in fair value of 0.
Initially, due to the promotion of Herborist “New Tai Chi Essence” in the fourth quarter, the sales cost is expected to continue. At the same time, the launch of brands and channels has increased the sales of new products.
The expense ratio increased slightly, and the operating indicators were exceptionally good: the company’s gross profit margin fell in the first three quarters of 2019.
16pct, but the gross profit margin increased by 1 in the third quarter.
94pct, mainly because the proportion of beauty products with higher gross profit increased.
During the first three quarters of 2019, the expense ratio decreased by 0 year-on-year.
21pct, but the expense ratio during the third quarter alone increased by 2 over the same period last year.
52 points, mainly due to the increase in sales / administrative expense ratio, increased by 1 respectively.
49pct / 0.
The increase in sales expense ratio was mainly due to the increase of Herborist marketing; the increase in management expense ratio was mainly due to the increase in revenue growth rate and the expansion and contraction.
As of the third quarter of 2019, the company’s inventory fell 8% year-on-year.
28%, inventory kept falling for two consecutive quarters; accounts receivable grew extra benign, increasing by 8 each year.
59%; the net operating cash flow also maintained a slight increase, thereby maximizing the overall operating indicators.
Herborist continued to improve. Qichu, Yuze and other brands grew rapidly. Liushen was affected by abnormal weather and other factors.
In terms of brands, Herborist continued to improve during the year, and the revenue in the first three quarters was basically flat. The “Second Generation Taiji Essence” listed at the end of September is currently online, and offline pre-sale and sales are in good condition, driving the brand to achieve positive revenue growth.Qichu, Yuze, Jiaan, Pianzaiyu, Shuangmei and other brands cater to segmentation, and the high-end trend continues to increase rapidly, with the growth rate all above 30%.
The small number increase in the first three quarters of Liushen is mainly due to the low temperature in the main sales region, fierce competition in the shower gel category, and the impact of individual online platforms. It is expected that the platform price control will be strengthened and multi-category expansion will be maintained. It will still maintain multiple stable growth rates in the future.
Online growth was faster, and the decline in department stores narrowed.
In terms of different channels, the overall growth rate of online channels in the first three quarters of 2019 was relatively fast, with an online share of approximately 23%.
Among them, the e-commerce channel growth rate is still faster but faster than in 19H1, slightly slower, GMV increased by 27%, the billing end increased by 19%; the special channel channel model has become increasingly mature, the first three quarters of growth rate was greater than 60%.
In the offline channels, department stores only increased by double digits, but the decline was narrowed and narrowed; the supermarkets, mothers and infants, and CS channels achieved low-number growth.
Investment advice: The company is a leading name in developing countries. It adheres to the “multi-brand + multi-category” layout, transforms it into the key development of Herborist brand, continues to revitalize other brands, and optimizes and adjusts channels such as e-commerce and department stores., Revenue, performance growth expectations continue to pick up.
Taking into account the poor sales of Q3 Liushen, and the adjustment of the estimated expenditures for the promotion of Tai Chi essence in Q4, the EPS of the company for 2019-2021 will be adjusted to 0.
16 yuan, the corresponding PE is 36X, 34X, 29X, given the “recommended” level.
Risk reminder: The industry’s prosperity is lower than expected, industry competition is intensified, channel operating costs have risen too quickly, product quality risks, and channel expansion has fallen short of expectations.