Proya(SH:603605) Hua Yuan Zheng Quan·2024-05-27 01:30Investment Rating - The report gives a "Buy" rating for the company, marking its first coverage [4][7]. Core Views - The company is positioned as a leading domestic cosmetics brand, entering a phase of high-quality growth. It has maintained a compound annual growth rate (CAGR) of over 30% in revenue and net profit from 2017 to 2023. In Q1 2024, the company achieved revenue of 2.182 billion yuan, a year-on-year increase of 34.56%, and a net profit of 303 million yuan, up 45.58% year-on-year [4][18]. Summary by Sections Company Overview - The company has over 20 years of experience in the industry and has evolved from a mass-market brand to a leading domestic cosmetics brand. Its brand matrix includes Proya, Caitang, Yefuti, Yousilai, CORRECTORS, and Off&Relax, covering various segments such as skincare, makeup, and hair care [4][16]. Product Strategy - The company has shifted its product strategy from affordable kits to a focus on big-ticket items, achieving significant results. The introduction of popular products like the "Bubble Mask" and subsequent big product strategies have helped establish a strong brand presence and attract repeat purchases [4][23]. Channel Strategy - The company has effectively adapted to channel changes, with online sales growing from 44% in 2018 to 93% in 2023. It has successfully leveraged platforms like Douyin (TikTok) for marketing, transitioning from influencer-driven sales to self-broadcasting, which has increased brand loyalty and reduced costs [5][31]. R&D Strength - The company emphasizes R&D, maintaining a leading position in various fields such as basic research and formula development. It has established strategic partnerships with institutions like the Chinese Academy of Sciences to enhance its technological capabilities [5][4]. Financial Forecast and Valuation - The company is expected to achieve revenues of 11.43 billion, 13.93 billion, and 16.65 billion yuan from 2024 to 2026, with year-on-year growth rates of 28.4%, 21.9%, and 19.5%, respectively. Net profits are projected to be 1.51 billion, 1.85 billion, and 2.23 billion yuan, with growth rates of 26.3%, 22.4%, and 20.7% [4][7].