Text|"Investor's Network" Xie Yingjie.In the context of weak overall consumption momentum, domestic beauty brands performed well in the "Double 11" promotion. Yunnan Bethany Biotechnology Group Co., Ltd. *** hereinafter referred to as "Bethany", 300957SZ) is one of them. With Winona, the main brand positioned as "sensitive skin care", the company won the top 5 of Tmall beauty and skin care, achieving the best ranking in history.
In the past few years, Bethany has taken the lead in the domestic functional skin care track. Whether it is brand reputation or business data, the performance has been relatively active in recent years. In the first three quarters of 2023, the company's revenue was 343.1 billion yuan, a year-on-year increase of 1851%；Net profit attributable to the parent company 57.9 billion yuan, a year-on-year increase of 1196%。
As the beauty environment cools down, the competition on the raw material side is becoming more and more volatile, and the outside world has questioned the single brand of Bethany, as the parent company, Bethany's share price has also shown a spiral decline, compared with the high market value of 120 billion yuan in the early stage of its listing, the latest market value has evaporated about 90 billion yuan from the peak.
Changes in financial data have also raised concerns from regulators. In the middle of this year, the Shenzhen Stock Exchange inquired about Bethany on the scale of inventory, entrusted processing mode, changes in entrusted financial management, high concentration of merchants, and a large increase in prepaid accounts.
In the special period of product matrix expansion and sales channel transformation, how to solve the above problems is still a big challenge for Bethany.
The stock price continued to decline and planned to buy backBethany also had moments of beauty.
In the early days of its listing in March 2021, the company was highly sought after by funds, and its stock price hit new highs, approaching 300 yuan at its peak, with a maximum market value of more than 120 billion yuan.
What ignites the market is the e-commerce dividend, and Bethany's online self-operated model accounts for a higher proportion than most companies. The skincare category is considered to be closer to rigid demand, and its profit margin is also greater than that of beauty, and the company's gross profit margin remained above 80% from 2017 to 2019.
However, in recent years, beauty and skin care brands have made efforts to develop online channels and bring goods through social e-commerce, and the cost of traffic has continued to rise, and the company's gross profit margin has continued to decline, falling to about 75% in the past three years. Gross margin for the first three quarters of 2023 was 7642%, down 048 percentage points.
Judging from past cases, domestic cosmetics are often stacked with explosive models, but there are not many brands that continue to be successful. Due to the limited sales growth of a single brand, failure to successfully incubate or acquire new brands can have an impact on profitability.
At the same time, some important shareholders have repeatedly **. As of the end of the third quarter of 2023, the shareholding ratios of shareholders Tianjin Sequoia Juye, Zhenli Consulting, and Chonglou Investment have been reduced respectively. 16%。In 2022, its shareholding ratio is: 91%。
The company is taking a series of measures to protect the disk. Bethany recently announced that the company adjusted the repurchase of the company's shares, that is, the total amount of funds for the repurchase of shares from 100 million yuan to 200 million yuan was adjusted to 200 million yuan to 300 million yuan, and the repurchased shares were not more than 130 yuan shares, and the number of repurchased shares was adjusted accordingly according to the upper limit of the repurchase.
As of November 16, 2023, Bethany repurchased 66 shares of the company through a centralized auction transaction360,000 shares, accounting for 016%, and the total amount paid is 5073370,000 yuan.
As of Dec. 1**, Bethany was at 7070 yuan, the stock price hit a record low, and the total market capitalization was 4057.2 billion yuan.
The growth rate of performance has slowed downCompared with the high growth of technology stocks, the reasonable valuation of consumer stocks is mainly based on their profit growth rate, but the company's performance growth rate is not as fast as in previous years.
According to the financial report, from 2020 to 2022, Bethany's operating income will be 263.6 billion yuan, 402.2 billion yuan, 501.4 billion yuan, a year-on-year increase. 65%；The net profit after deduction was 51.3 billion yuan, 81.3 billion yuan, 95.1 billion yuan, a year-on-year increase, and the return on net assets in the same period were. 48%。
In the first three quarters of 2023, Bethany's revenue was 343.1 billion, a year-on-year increase of 1851%；Net profit attributable to the parent company 57.9 billion, a year-on-year increase of 1196%, and the return on equity decreased by 3 percent year-on-year60% to 1018%。It can be seen that the company's performance growth rate has declined.
The third quarterly report shows that the company's operating costs are 80.9 billion, a year-on-year increase of 2039%。The increase in the company's operating costs was greater than the increase in revenue. This means that the e-commerce traffic dividend is declining, and the cost of customer acquisition is rising.
At present, Bethany is also facing the problem of rising sales expenses, which is related to the high dependence on online channels. The company's sales expense ratio has remained between 40% and 44%, and the sales expense reached 16 in the first three quarters of this year0.5 billion yuan, and the sales expense ratio** to 468%。
Driven by the increasingly fierce online competition in the beauty industry, the high cost of customer acquisition has led to a surge in sales expenses.
Bethany said in the financial report that as internationally renowned makeup brands attach importance to the layout of online channels, it will squeeze the sales share of local makeup brands on the channel, and the company may face greater competitive pressure. At the same time, risks such as relatively concentrated sales platforms, seasonal fluctuations in sales, and product quality control are also things that the company needs to guard against.
Correspondingly, its inventory turnover rate has declined. From 2020 to 2022, Bethany's inventory balance was 25.4 billion yuan, 46.3 billion yuan, 67.1 billion yuan, and the inventory turnover days at the end of the same period were 13010 days, 13372 days, 16421 days, higher than comparable peer Proya (603605SH), and the number of inventory turnover days in the latter was 10286 days, 10619 days, 10391 days.
In the first three quarters of this year, Bethany's inventory reached 9$7.1 billion, an increase of $0.3 billion from the beginning of the year, and inventory turnover days increased by 29 days year-on-year to 274 days.
Exploring the "second curve" is difficultAt present, the skincare industry is still in a period of rapid growth, and the overall scale of the industry is growing rapidly and is expected to be maintained in the next few years. According to Euromonitor's estimates, China's sensitive skin care will account for more than 10% of the overall skin care market in 2022, and the local skin care market will be about 370 billion yuan in 2027, and according to the proportion of 10%, the market size of sensitive skin will be less than 40 billion yuan by then.
The fact that the multi-product matrix has not yet been formed is still a challenge for Bethany. The company's skin care products take "Winona" as the core brand. According to the statistics of third-party platforms, the effective turnover of the "Winona" brand Tmall on the first day of the "Double 11" pre-sale in 2023 ranked sixth.
In addition, the company has been expanding diversified brands, such as the high-end skincare brand AOXMED, as well as the acne brand Beftin with AI intelligence as the selling point, as well as Winona Baby, Potisch and so on. However, judging from the financial report data in the first half of this year, the above brands have contributed less.
From 2020 to 2022, the Winona brand accounted for the proportion of Bethany's revenue. 4%。In the first half of 2023, the Winona brand generated about 226 billion yuan, accounting for 9585%。
Under the influence of factors such as little effect on brand diversification and slowing performance growth, Bethany may be trying to accelerate its expansion growth through mergers and acquisitions, foreign investment, etc.
Bethany announced at the end of September this year that its wholly-owned subsidiary, Hainan Bethany, had its own funds of 48.6 billion yuan was transferred to Yuejiang Investment 4855% equity, and at the same time with its own funds of 50 million yuan to subscribe to the target company's new registered capital of 12430,000 yuan. After the completion of the transaction, Bethany indirectly holds 51% of the equity of Yuejiang Investment, and the target is included in the consolidated statements.
It is worth noting that Yuejiang Investment is the parent company of the well-known brands ZA Jirui and Pomei brands. Both brands have been launched in the Chinese market for more than 20 years. Yuejiang promised that from 2023 to 2025, the net profit attributable to the parent company will not be less than 05/0.8/1.0.5 billion yuan, and the cumulative net profit attributable to the parent company in three years shall not be less than 2$3.5 billion.
There is still a question mark over whether the addition of new brands will bring a second growth curve to Bethany, but the track of functional skincare products is becoming more and more crowded. Some research institutions are still optimistic about the company's future development prospects, believing that with the continuous sorting out of the channel side of the main brand and the iterative upgrading of products, it is expected to accelerate the recovery quarter by quarter.
The latest research report of the Yangtze River ** pointed out that the brand power and repurchase rate of the company's main brand Winona are still strong, and the new product launch since the third quarter has strengthened the malleability of the company's product series, and the recent acquisition of a controlling stake in Yuejiang Investment is expected to strengthen the company's Volkswagen brand layout and e-commerce operation capabilities. (Produced by Thinking Finance).