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Marubeni (603983) In-depth Research Report: Steady Growth of Niche Market and Advantageous Category Expansion Expected

Marubeni (603983) In-depth Research Report: Steady Growth of Niche Market and Advantageous Category Expansion Expected

Positioned at the mid-to-high end, with outstanding profitability, thanks to the prolonged period.

Eye creams, essences, and creams are the highest value-added categories in skin care products. They are often characterized by “the highest functional ingredients, the largest difference in utility, the highest unit price per unit weight, and the strongest consumer payment intention.”On the pearl. ”

The Marube brand cuts into the eye cream category, positioning it at the mid- to high-end, and the offline guest unit price is about 400 yuan.

The profitability is outstanding, except for 2016, the net interest rate is over 20%, and the net interest rate in 2018 is 26.

15%, ROE reached 30.

20%, far ahead of the cosmetics industry.

In the past tide of the cosmetics industry, Maru Precision has seized development opportunities.

It started out as a beauty salon, started to enter the CS channel in 2007, started investing in counters, and started to use spokespersons for brand promotion. Since 2012, it has been an e-commerce channel.

Eye cream, high-end, differentiated positioning and accurate pace, the steady pace helps the company to achieve rapid growth and profit margins of its peers.

From 2011 to 2013, the company’s advertising expenses / revenues reached 35-36% (advertising expenses from 2 in 2011.

16 ppm increased to 3 in 2013.

4.9 billion US dollars, the overall sales expense ratio is close to the 40-45% range, the early competitive manual marketing and brand promotion to strengthen the brand display, to capture the minds of consumers, especially consumers in third and fourth tier cities, and establish brand awareness.

The company’s sales expenses were absolutely and benign growth from 2014 to 2018, and the sales expenses in 2018 were 5.

35 trillion (of which advertising is 3).

900 million), 33.

The 93% selling expense ratio also optimized the net margin level.

Development stage of cosmetics: product marketing and promotion, brand establishment, multi-brand.

The entire cosmetics industry chain: cosmetics formula, design and product positioning → raw 苏州桑拿网 material procurement and product manufacturing → marketing promotion → channel sales. Different cosmetics companies are involved in related transfers. The companies that connect with consumers are gradually getting behind, and the cosmetics group company chain is gradually extending to the upstream.

The company completed a relatively complete exchange of the industrial chain on the Marubei brand (currently, the distribution is still based, but tp is also directly operated by e-commerce).

The development strategies of cosmetics companies at different stages of development are different: for product marketing and promotion at the initial stage of development, after establishing a certain sales scale, establishing a brand has become an indispensable substitute. A small number of categories under the substitute cosmetics brand are facing due to positioning and targeting the population.Increasing competition requires broadening brands and categories.

At present, Marubei belongs to the overall stability of the category structure. The skin care / skin cleansing / skin care-cream cream emulsions account for 30-35%, 10-15%, and 50% of the revenue respectively. The remaining masks and cosmeticsOccupies a relatively small amount.

In addition to the mature brand medicine beauty, the company is also in the phase of brand expansion and category expansion, especially from the past skin care products to makeup, but it is facing the shaping of the entire cosmetics industry chain. If the merger and acquisition method is used to expand the category, it involves transaction consideration and team integration.

Investment suggestion: We believe that the cosmetics industry is in a new outbreak period, and demand will still have a long-term medium-to-high-speed growth.

The company targets the eye cream category, with few competing products among domestic brands, and high-end products and price positioning also distinguish consumers.

At present, the profit level is good, and the brand is expanded in the future. The category has corresponding space. At present, the attributes of new shares are replaced.

We expect the company’s net profit attributable to its parent to be about 4 in 2019-2021.

9, 5.

75, 6.

7 trillion, currently sustainable corresponding to 46 times pe in 2019.

Considering the scarcity of specimens and the attributes of the new shares, the company will be given a valuation of about 50 times in 2019, with a target price of 60 yuan, and it will be covered for the first time. A “recommended” rating will be given.

Risk reminders: product safety accidents, intensified industry competition, weak brand and category expansion, and wrong marketing strategies.