Shanghai Jahwa (600315): Sales & Management Expense Ratio Continues to Decrease, Landing Strategy Advances Steadily

Shanghai Jahwa (600315): Sales & Management Expense Ratio Continues to Decrease, Landing Strategy Advances Steadily

Interim summary: 2019H1 total revenue 39.

23 trillion, +7.

02% y / y, net profit attributable to mother 4.

4.4 billion, +40.

Increase by 12% year-on-year.

Gross profit margin 61.

94%, minus 2 a year.

66 points.

After deducting non-return to mother’s net profit 2.

610,000 yuan, + 9.

The year-on-year growth rate was 52%, faster than revenue growth.

  Revenue: 2019H1 total revenue 39.

23 trillion, +7.

02% year-on-year.

In terms of categories, the revenue of beauty skin care, personal care and home care in Q2 2019 was 4 respectively.

88, 13.

72, 1.

07 trillion, accounting for 24.

79%, 69.

71%, 5.

42%, product price changes were 17.

84%, 1.

87%, 3.


  Profit side: the company’s period expense ratio (including research and development) 56.

75%, minus one year.

84pct; of which the selling expense ratio is 43.

50%, previously reduced by zero.

36 points; management costs 10.

78%, zero for one year.

91 points; financial expense ratio is 0.

61%, minus 0 for one year.

44 points.

Taken together, the company’s net interest rate has increased in ten years2.

68pct to 11.


The gross profit margin is 61.

94%, minus 2 a year.66pct, mainly due to the new plant operation and sales structure changes.

  Operating side: 2019H1 company’s net cash flow from operating activities5.

44 ppm, an increase of 7 per year.


From the perspective of inventory, inventory at the end of the period was 9.

7.3 billion, an increase of 11 from the end of 2018.

20%, mainly due to the gradual changes in production plans and the increase in raw materials and consigned processing materials.

  Core recommendation logic: The company has steadily pushed forward the implementation of its strategy. Herborist has completed adjustments to its brand positioning, and product quality and technology have continued to improve.

  ① Brand-driven: Huameijia has registered more than 810,000 new members, and has begun trialing Herborist membership marketing O2O integration process; in the first half of the year, Herborist lyophilized facial mask marketing focused on the theme of “beauty is the best revenge” derived from videoThe “Dtreme Challenge Challenge” invited well-known opinion leaders to participate in the challenge, attracting more than 280,000 amateur interactive themed videos, and the number of advertisement video playbacks exceeded 1 billion.

In the winter, Herborist will focus on promoting new Tai Chi essence.

②Channel innovation: As of the end of June 2019, the company’s organized and controlled stores: 200,000 supermarket stores, nearly 90,000 rural outlets covered by direct-sale vehicles in rural areas, about 1,500 department stores, and about 1 specialty cosmetics stores.

30,000, more than 5,000 mother and baby shops.

The company’s e-commerce GMV sales growth increased by 31%. During the 618 e-commerce festival on June 1 and 20, the flagship store GMV growth increased by 24%.GMV grows over 30% annually.

Special channels maintained a good growth trend in the first half of the year.

③Supply guarantee: The company’s new plant’s liquid washing production workshop has been running smoothly. At this point, the company has fully and formally operated across the plant. The entire plant has realized digitalization, precision, informationization and automation of operation management.

  We maintain our highest double-digit revenue growth expectations, with performance growing faster than revenue growth.

Considering 1.

3.8 billion asset disposal income and 0.

The net income of 800 million changes in fair value will affect the net 无锡桑拿网 profit for 2019-2021 from 7.



2.2 billion adjusted to 7.



At 24 ppm, the current expected PE28x, combined with the average valuation of A-share cosmetics listed companies, gives Shanghai Jahwa a 34x conversion in 2019, corresponding to a target price of 40.

12 yuan, maintain BUY rating.

  Risk warning: New product sales are less than expected, and industry competition is fierce