Shanghai Jahwa(600315) 广发证券·2024-07-18 11:01Investment Rating - The report maintains a "Buy" rating for Shanghai Jahwa, with a target price of 21.70 CNY per share, based on a 25x PE multiple for 2024 [92][120] Core Views - Shanghai Jahwa has a century-old history and a diversified brand portfolio, with leading brands like Liushen and Herborist driving growth [8][118] - The company has undergone multiple management changes and organizational restructuring, with the latest shift to a divisional structure aimed at improving market responsiveness [17][42][118] - Online channels, particularly interest-driven e-commerce platforms like Douyin, are becoming increasingly important, with over 100% YoY growth in 2023 [28][118] - Key brands like Liushen and Herborist are showing signs of recovery, with Liushen maintaining a dominant 76% market share in the offline toilet water category [44][118] - The company is focusing on high-margin, high-growth categories, particularly in skincare, while optimizing its product portfolio and channel strategy [38][118] Brand Performance - Liushen has successfully expanded beyond its core toilet water product, with its adult shower gel achieving a 5.3% offline market share in 2023 [44][169] - Herborist has streamlined its product lines and reduced inventory, with online GMV on Tmall growing 85% YoY in 2023 [178][192] - Dr. Yu has seen strong growth on Douyin, with GMV increasing 116% YoY from June 2023 to May 2024 [184] - Maxam has successfully leveraged nostalgia marketing through its "Old Baby" livestreaming strategy, driving significant sales growth on Douyin [201] Financial Projections - Revenue is expected to grow at a CAGR of 8-9% from 2024-2026, reaching 8.41 billion CNY by 2026 [64][119] - Net profit is projected to increase from 587 million CNY in 2024 to 782 million CNY in 2026, representing a CAGR of 15-17% [64][119] - Gross margin is forecast to improve from 57.14% in 2022 to 60.31% in 2026, driven by product mix optimization [64][119] Organizational Changes - The company transitioned from a functional to a divisional structure in Q3 2023, establishing three main divisions: Beauty & Skincare, Personal Care & Home Care, and Overseas [42][118] - This restructuring has led to improved efficiency, with management expenses decreasing by approximately 31% YoY in Q1 2024 [51] - The new structure has also enhanced collaboration between brands and channels, leading to better price control and promotional efficiency [51] Channel Strategy - Online revenue contribution has increased from 16% in 2016 to 43% in 2023, with traditional e-commerce facing pressure while interest-driven platforms like Douyin drive growth [153][28] - Offline channels remain important, accounting for 57% of revenue in 2023, but are under pressure due to store closures and traffic declines [118][154] - The company is focusing on new retail strategies, with new retail sales growing 21% YoY in 2023 and accounting for 29% of offline channel sales [154]