Investment Rating - The report assigns a "Buy" rating for the company with a target price of 60.24 HKD [1][8]. Core Views - The report highlights that the company, as a leading multi-brand beauty enterprise in China, has established a turning point for its main brand, Han Shu, and anticipates promising upgrades for its sub-brands [5][10]. - The domestic beauty market is experiencing a resurgence of local brands, with the company positioned to benefit from this trend [6][32]. - The company has solidified its competitive barriers through product innovation, channel expansion, and effective marketing strategies [7][10]. Summary by Sections Company Overview - The company has focused on a multi-brand strategy since its establishment in 2002, with well-known brands such as Han Shu, One Leaf, and Red Elephant, and has launched new brands like Anmi Er and New Page [5][17]. - The ownership structure is concentrated, with various incentive mechanisms in place to motivate employees [20][23]. Market Dynamics - The Chinese cosmetics market has grown significantly, reaching a size of 946.8 billion CNY from 2015 to 2021, with a compound annual growth rate (CAGR) of 12% [6][32]. - Local brands have captured 47.2% of the market share, indicating room for growth compared to mature overseas markets [6][32]. Competitive Advantages - The company focuses on core ingredients and technologies to enhance product efficacy, particularly in its Han Shu brand [7][10]. - In 2023, the company capitalized on the Douyin (TikTok) platform, leading to a significant increase in sales through innovative marketing strategies [10][29]. Financial Projections - Revenue forecasts for 2024-2026 are projected at 67.74 billion CNY, 88.67 billion CNY, and 107.57 billion CNY, with corresponding growth rates of 61.6%, 30.9%, and 21.3% [8][13]. - The net profit attributable to shareholders is expected to reach 8.71 billion CNY, 12.03 billion CNY, and 15.49 billion CNY for the same period, with growth rates of 88.8%, 38.1%, and 28.8% respectively [8][13]. Valuation - The absolute valuation method estimates the company's per-share value at 59.18 CNY, while the relative valuation method suggests a target price of 54.69 CNY (60.24 HKD) based on a 25x PE ratio for 2024 [8][13].
主品牌韩束拐点确立，子品牌焕新升级可期