Shanghai Jahwa released third quarter results, single quarter net profit growth exceeded 30%

In the evening of October 26, Shanghai Jahwa (600315.SH) disclosed the third quarter of 2020 financial report, the report shows that the first three quarters of this year to achieve business income of 5.362 billion yuan, affiliated to the shareholders of listed companies net profit of 312 million yuan, operating cash flow of 618 million yuan. 2020 is the reform year of Shanghai Jahwa, the company's work is in the optimization adjustment period, the third quarter has begun to see the results: the company realized net profit of about 33% growth, operating cash flow increased by about 45% and overseas revenue by about 15%. The company adjusted the business structure, and continued to strictly control the cost rate; net profit and cash flow improved significantly, the profitability of a significant recovery and improvement.

Brand innovation is very effective

In the third quarter, the company's brands to consumer-centric, a series of innovative works were carried out and achieved good results: the scientific skin care brand Yuze continue to accumulate a large number of positive consumer reputation, continued the three-digit growth trend; high-end cosmetics brand Shuangmei adjusted the development strategy. On the one hand, pay attention to e-commerce channels, on the other hand in August this year the pilot entered Hefei Yintai Department Store and set up a counter, further strengthen the high-end brand image, to achieve three-digit sales growth; Star brand Liushen continued to consolidate the leading position of the individual care market. Under the background of the epidemic, its flower dew, shower lotion, hand sanitizer and other products are welcomed by the market, sales growth is stable. In addition, some sub-brands also show excellent performance, home security brand has a good growth. Since June this year, independent operation of the brand also achieved two-digit sales growth in the third quarter.

Brands have also made breakthroughs in marketing innovation. Baicaoji in order to promote the new star products "emerald water" (Tai Chi Fuhuo micro-essence source fluid) and launched the"witness repair power" integrated marketing campaign, hand in hand with Dunhuang Research Institute, with the domestic head digital marketing service platform giant volume engine under the Douyin, Today's Headlines(Toutiao) and other platforms for in-depth cooperation, enable the domestic Danghong small flow Wei Daxun, the well-known ancient style music Huo Zun, the use of star + KOL + KOC social communication matrix, maximize the increase in word-of-mouth and interactive flow; Gough invited young actor Guo Qilin to become a new brand spokesman, to make a young interpretation of the brand image; Kai-chu invited well-known actors, singers Liu Geng-hong and their "little bubble" on behalf of the "magic bottle" (Kai-chu self-confident baby soft bright shampoo), in the Douyin platform launched the "all-around milk father magic show challenge, to further enhance brand awareness.

Channel Adjustment Rate Optimization

From the second quarter of this year, the company's channel structure adjustment optimization has been carried out step by step. In term of the offline, the company's business channels to enhance operational efficiency, stable sales; Department store channels to adjust the terminal stores, the decline narrowed; CS channels to promote the reconstruction, the third quarter as a whole to achieve double-digit sales growth, especially in the Watson channel, the Diancui brand led the performance of skin care products.

In terms of online, the company achieved more than 20% sales growth in January-September. From July to August this year, the company took the initiative to adjust the business structure of e-commerce, optimize the frequency and proportion of live broadcast, cultivate the direct broadcast talents in the company, and completed the construction of the direct broadcast matrix in September, formed the three-dimensional mode of super head + middle waist KOL + store self-broadcast, and adjusted the balance of the direct broadcast resources between the brands, so that the development of e-commerce business sustainable, profitability has been improved significantly. For special channels, the company continuously strengthens the resource sharing with the big shareholder "Ping An of China", through customizing the different sales strategy to the life insurance channel, the production and insurance bank and the new business, maximizing the safety system resources.

Reform Measures Show Confidence

In the second quarter of this year, Pan Qiusheng, who has more than 20 years of experience in the management of multinational consumer goods companies, formally took over as chairman and chief executive officer of Shanghai Jahwa, and put forward the business policy of "taking consumer as the center, brand innovation and channel advancement as the two basic points, taking process, culture and digitalization as the three propellants", and steadily promoted the innovation in brand, channel and organization structure.

In the focus on consumers, the company strengthened the cooperation with the big data platform and through analysis, not only focused on the future development of key categories, packaging, but also began to reduce the number of new products, to test its concept and effort to create hot brand; in the aspect of brand innovation, the company on the one hand to use the big data methodology to enhance product strength, on the other hand continue to promote marketing innovation. For example, the DBPI (brand digital assets) tracking system for evaluating marketing efficiency has been established and the weight of social media in marketing investment has been greatly increased. In the aspect of channel progression, the offline channel has been embracing new retail, pushing the offline business line through the cloud mall, home-based ambassadors and home-based platform, while the online channel has been fully distributed to broadcast the KOL, promoting the proportion of self-broadcast, combing the brand head single product, begin to distinguish clearly online and offline product differentiation, promote the healthy development of business. In the construction of corporate culture, the company to create an open and transparent workplace atmosphere, launch two-month birthday party, management grassroots condolences and other activities, and in-house through the weekly "home phone news" video news, improve communication and sharing of information with employees, the whole organization into a warm, oriented family. In the process and system transformation, the company combed and discovered operational risk vulnerabilities caused by breakpoint processes and infrastructure backwardness, which will be further upgraded in the future.

The Future Development Will Continue to be Good

The company's restructuring will deepen in the fourth quarter. Brand aspect, Shuangmei accelerated in the development of e-commerce channels, this year "Double 11" is expected to continue to grow at a high speed; Yuze will be held the annual forum in the fourth quarter, continue to consolidate the core image of the brand "Medical Research Co-created"; Gough and MeiJiaJing also continue to adjust the brand strategy, MeiJiaJing launched a younger product line, at present see in the retail end sales has been expected, it is expected to have better performance in the fourth quarter.

In term of channel aspect, the fourth quarter offline channel development is stable, Supermarket will continue operation steadily, the Department stores will enter the period of deep adjustment, CS channel in the traditional CS store improvement and recovery is expected to speed up; In terms of Online Channel, the company in the continuous adjustment of e-commerce business structure on the basis of concerted efforts to focus on the "double eleven" campaign, is expected to appear revenue and profit synchronous improvement.

Recently, the company also issued a public announcement to promote the long-term equity incentive plan, which synchronously defined the future development goals, highlighting the company's confidence in the future development.

In the future, as the century-old leader of China's cosmetics industry, Shanghai Jahwa will continue to effectively promote the implementation of the "123 Management Policy" while consolidating the existing core competitive advantages, realize the rejuvenation of national brands, create greater value for consumers, employees, shareholders and society, and satisfy people's yearning for a better life on a broader and richer level.