Runben Biotechnology (603193) 海通证券·2024-10-28 09:13Investment Rating - The report assigns an "Outperform" rating to Runben Co Ltd (603193) [1] Core Views - Runben has established a strong brand presence in the mosquito repellent category and is rapidly expanding into the high-margin baby care segment [5] - The company has built an online-driven omnichannel sales network, with online sales accounting for 72% of total revenue in 1H24 [5] - Runben has achieved steady growth in operating performance, with 1-3Q24 revenue and net profit increasing by 26% and 44% YoY respectively [5] - The company's gross margin reached 58 3% in 1-3Q24, up 2 2 percentage points YoY [5] Industry Analysis - The mosquito repellent and baby care industries are highly fragmented, with the top 5 baby care brands accounting for only 14% market share in China [5] - The baby care market is becoming more segmented, with products tailored to different body parts, functions, and scenarios [5] - Scientific parenting concepts are driving demand for more specialized baby care products [5] Competitive Advantages - Runben offers safe and gentle products, with mosquito repellents that are more environmentally friendly than traditional options [6] - The company has strong R&D capabilities, with 11 national invention patents and 11 utility model patents as of 1H24 [6] - Runben's integrated R&D, production, and sales model allows for better cost control and quality assurance [6] - The company achieved a net profit margin of 25 2% in 1-3Q24 [6] Growth Drivers - Frequent new product launches and price increases are driving growth, with 50+ new products introduced in 1H24 [6] - Runben is expanding its offline distribution channels, with non-platform distributors covering over 30 provinces and regions [8] - The company has a strong online presence, ranking first in maternal and infant care products on major e-commerce platforms during the 2024 618 shopping festival [8] Financial Projections - Revenue is expected to grow at a CAGR of 26 8% from 2024 to 2026, reaching 21 09 billion yuan by 2026 [9] - Net profit is projected to increase at a CAGR of 31 9% over the same period, reaching 5 19 billion yuan by 2026 [9] - The gross margin is forecast to improve from 58 8% in 2024 to 60 8% in 2026 [9] Business Segment Analysis - Mosquito repellent products: Expected to grow at a CAGR of 25 5% from 2024 to 2026, reaching 6 42 billion yuan by 2026 [10] - Baby care products: Projected to grow at a CAGR of 33 3% from 2024 to 2026, reaching 12 36 billion yuan by 2026 [10] - Essential oil products and others: Forecast to grow at a CAGR of 7 3% from 2024 to 2026, reaching 2 3 billion yuan by 2026 [10] Valuation - The report values Runben at 25-30x 2025E PE, implying a market cap range of 103 43-124 12 billion yuan [9] - The target price range is 25 57-30 68 yuan per share [9]