Investment Rating - The report maintains a "Buy" rating for Dengkang Oral Care (001328 SZ) [7] Core Views - Dengkang Oral Care achieved steady growth in revenue and profits in H1 2024, with revenue increasing by 5% YoY to RMB 703 million and net profit attributable to shareholders rising by 10% YoY to RMB 72 million [1][3] - The company's growth is driven by both volume and price increases, with a focus on optimizing product structure and expanding market share in oral care products [1][4] - The electric toothbrush category saw significant growth, increasing by 62% YoY, while adult toothpaste, which accounts for 78% of revenue, grew by 7% YoY [4] - Online sales grew by 17% YoY, outperforming offline sales, which grew by 2% YoY [4] - The company's gross margin improved by 4 1 percentage points, driven by product mix optimization and the introduction of higher-end products [4] Financial Performance - In Q2 2024, revenue was RMB 343 million, up 6% YoY, while net profit attributable to shareholders was RMB 35 million, up 4% YoY [3] - The company's offline market share in toothpaste increased by 0 5 percentage points to 8 6%, surpassing P&G to rank third in the market [4] - In the electric toothbrush category, the company's offline market share rose by 0 35 percentage points to 5 6%, maintaining its second-place ranking [4] - The company's e-commerce revenue grew by 17% YoY, with significant growth on the Douyin platform, where its ranking improved from 9th in January to 5th in July [4] Growth Drivers - The company's growth strategy focuses on increasing market share in oral care products, with a particular emphasis on high-growth categories like electric toothbrushes [4][5] - Mid-term growth is expected to be driven by the increasing contribution of oral medical and beauty care products [1][5] - The company is leveraging its product mix optimization to drive volume, price, and profitability growth, with the average price per 100 grams of toothpaste increasing by 14% compared to 2019 [5] Market Positioning - Dengkang Oral Care has strengthened its position in the anti-sensitivity toothpaste segment, holding a 63% market share in the offline anti-sensitivity category [4] - The company is capitalizing on the rise of domestic brands and targeting younger consumers through marketing campaigns, including collaborations with popular IPs and endorsements by celebrities [5] Valuation and Forecast - The report forecasts that Dengkang Oral Care will achieve net profit attributable to shareholders of RMB 163 million in 2024 and RMB 192 million in 2025, with a PE ratio of 25x and 21x, respectively [5]
登康口腔2024H1点评：收入&利润稳步增长，量价齐升逻辑延续