Po Laiya (603605): Maintaining rapid growth in the second quarter, new brand and new category layout foster future growth points

Po Laiya (603605): Maintaining rapid growth in the second quarter, new brand and new category layout foster future growth points

Core views The development of the main brand tuyere category and e-commerce business are the core foundations to ensure that the company’s performance continues to grow rapidly 南宁桑拿 this year.

Since 18 years, Polaia has accelerated its approach to youthfulness in the development of new products and brand marketing. New products cater to the needs of the party and make-up, and marketing has more cooperation with KOL to guide and promote.

As for the e-commerce business, due to the adjustment of the promotion method (more discounts for merchandise are adjusted to marketing promotion), the replacement of the short-term growth rate of online GMV cannot be simply mapped to the decline in the company’s online revenue growth.We expect that the company’s online revenue will basically maintain the rapid growth trend since 18 years in the second quarter. Starting this year, the company will have a better understanding of the online and offline segmentation and balance of interests from a strategic perspective. This will be more beneficial to the company’s online and offline channels in the long run.Sustainable and healthy development.

Involving more new brand expansion through investment is a potential focus for the company in the medium term.

On June 19, the company announced the capital contribution1.

The US $ 3.5 billion Jiaxing Woyong Investment Partnership was established to seek development opportunities in cosmetics and new marketing ecology.

In terms of new brands, the company has invested in cooperation with brands such as Korean beauty YNM, Japanese high-end cosmetics I-KAMI, makeup TZZ, etc., focusing on high-growth categories such as makeup and emerging marketing methods for social e-commerce, to cultivate more growth points after 19 yearsThe company has a relatively more flexible cooperation model and incentive mechanism. It is expected that the subsequent expansion of internationalization and multi-brand and multi-category will attract more brand extensions.

The domestic cosmetics industry has a bright future, and the company’s mechanism and flexible incentives are more conducive to the growth of its short- and medium-term performance.

As one of the leading players in the fully competitive industry, the company merged and shared the cake of the rapid growth of the domestic cosmetics market. Instead, the company established a variety of incentives such as brand distribution, wages and bonuses. After the listing, the company’s incentive mechanism was further optimized.Pursue the maximization of sales and the minimization of maximization, so that employees become the company’s operators; external teams through the establishment of a partnership system to ensure the company’s talent gradient construction and long-term healthy and sustainable development, to achieve faster, healthier and controllable expansion.
This flexible incentive and decision-making mechanism gives the company stronger learning and adaptability in the rapidly changing domestic cosmetics market environment, and gradually establishes its own brand image and competitive advantage in young consumers and low-line markets.

Financial Forecast and Investment Recommendations We maintain 1 for the company’s 2019-2021 earnings.

89 yuan, 2.

47 yuan and 3.

The profit forecast of 20 yuan is maintained at 40 times PE of the company in 2019, corresponding to a target price of 75.

60 yuan, maintain “Buy” rating.

Risks suggest that e-commerce growth is slower than expected, new product development risks, macroeconomic fluctuation risks, market competition risks, etc.