Mutual growth of income and net margin of Shanghai Jahwa in the first three quarters of 2018, management level and quality have improved steadily

On the evening of October 29, Shanghai Jahwa (600315) released the company's report for the first three quarters of 2018. In the first three quarters of this year, the company achieved an operating income of 5.42 billion yuan, a year-on-year increase of 9.5%, and the sales further expanded; the net profit was 453 million yuan, a year-on-year growth of 37.98%; the net profit which has deduct recurrent P&L was 372 million yuan, a year-on-year increase of 15.05%; moreover, the main business was significantly boosted; the operating cash flow was 717 million yuan, far exceeding the net profit level; the two expenses were strictly controlled, having achieved a double drop of both the sales expense rate and the management expense rate. Shanghai Jahwa has gained quality growth in the first three quarters of this year, in line with the company's planned development goals.

Brand building leads the trend of domestic products

Shanghai Jahwa holds a firm belief in its differentiated core competitive advantages immersed with Chinese culture. It continues to implement its brand development strategies aimed at high-end, younger, and segmented consumer groups by introducing new products and innovating marketing methods, which are welcomed by young consumers especially.

In the first three quarters of this year, its Liushen brand continued the marketing strategy aiming at the younger generation. With marketing strategies of scenario expansion and all-season product development, Shanghai Jahwa has achieved stable increase both in price and sales of its products. Its Herborist has been enhancing its brand competitiveness by insisting on product upgrading and innovation as well as data-based precision marketing; the “Yue Series” high-end makeup has been successfully launched onto the market, effectively complementing the company's cosmetics category. Its Maxam brand has reset the strategy by focusing on key categories, upgrading core products, actively promoting marketing towards young people and continuing the concept of "scenario care". After launching the All-time Care Series lip balm, Shanghai Jahwa joined hands with the popular white rabbit candy brand and launched the “white rabbit toffee-flavored lip balm”. It rocks the whole network, and was sold out in 2 seconds, making it a net star on the Chinese internet. Its “GF” brand, as the first male cosmetic brand on Chinese market, has also adjusted its development strategy and optimized its distribution network to accelerate for future growth. At the same time, the company has actively promoted its brand portfolio management, and cultivated the secondary brands to gradually become the next growth engines of the company's business, such as Giving, which has been committed to becoming China's professional high-end infant care brand, Home Aegis, focusing on cleaning and maintenance of household furnishing as a scientific and technology innovation brand, and Dr.Yu, which specializes in skin barrier recovery.

Shanghai Jahwa has laid out its big data precision marketing. Through the "Huameijia(Beautiful and gorgeous home) CRM system" and "Jahwa the First Party DMP " system, Shanghai Jahwa has built a closed loop of complete digital marketing data, integrating Herborist, GF, Vive and Shanghai Jahwa official flagship stores into a complete system of membership and rights. It has established and maintained a closer interaction with all Jahwa brand consumers, achieving more accurate marketing communication, more suitable marketing content presentation, deeper consumer insights, and more comprehensive marketing evaluations. According to the latest data, the “Huameijia” CRM built for connected consumers has absorbed over 400,000 users and the active rate is 80%; the DMP system built for unconnected wide-area consumers has deposited a marketing date including more than 1.436 billion ID numbers of devices. In 2018, its brands such as Liushen and Herborist have launched DMP-based programmatic precision delivery.

Optimization and upgrading of channel structures

Shanghai Jahwa adheres to the channel strategies of omnichanneling, full coverage, online and offline integration, channel and brand co-development. The company has launched a channel innovation project to create a new omni-channel retail format, achieving the ecological effect of online and offline linkage. For the on-line channels, the company is no longer satisfied to just implement the e-commerce concept, but integrates the three dimensions of brand building, product innovation and channel innovation so as to enhance the consumer experience. The brand building end transmits the brand to consumers through “international landmarks”, “stars’ testimony” and “trend festival”; the product innovation end constantly enhances the consumer experience by creating word-of-mouth products and brand-new product upgrades; the “smart stores” and “ipromoter” projects as incorporated into channel innovation have helped establish the omni-channel format by connecting the flagship stores, offline stores, and the department stores or supermarkets. The means of "shop self-broadcast" tends to trigger in-depth consumer interactions and improve the interaction between online channels and traditional department store-supermarket channels.

In the first three quarters of this year, the company's offline business channels have grown against the trend and achieved good performance, benefiting from its familiarity with the growth mode and driving force of retail terminals in the long-term development of the daily chemical industry. In the fiercely competitive market as joined by international giants, Shanghai Jahwa makes breakthroughs and sound development, gradually releasing the dividends gained from product upgrading. Shanghai Jahwa will launch a new upgraded counter for department stores in 2019, and will enter the shopping center in the form of a single-brand store “Yangmei(or Nurturing beauty)”. The mother-infant channel has also achieved high speed growth under the synergistic development of Giving and Tommee Tippee. The mature mechanism formed in the maternal and child stores will also drive the company to maintain sustainable development in the maternal and baby business sector.

Remarkable results achieved via M&A integration

On the basis of developing its own brand, Shanghai Jahwa is achieving new growth momentum by acquiring high-quality brands and integrating internal and external resources. The acquisition of Tommee Tippee, a wholly foreign-owned baby feeding brand, has accelerated the company’s domestic and international business development after its joining the company's brand matrix. At present, the growth rate of Tommee Tippee’s global market is much higher than the average 0-2% in the global market for infant feeding products, mainly due to the rapid growth of the North American and Chinese markets and the emphasis on e-commerce channels. In the Chinese domestic market, Tommee Tippee ranks among the top monthly sales of mother-infant product channels after its entry into the market for only one year, and is expected to continue to expand its online business share in the future. Under the two-child state policy, the domestic maternal and baby products market has great potential for development, and accordingly, the future development of Tommee Tippee will also be quite optimistic. In November this year, Tommee Tippee has participated in the first China International Import Expo to showcase its high quality and technological innovation strength to both Chinese and global consumers. In this year, Shanghai Jahwa and the United States Church & Dwight signed a long-term cooperation agreement in China, becoming the exclusive partner of Church & Dwight in the Chinese mainland market, engaged in the four categories of products respectively for home care, oral care, hair care and feminine care. Shanghai Jahwa is in exclusive charge of operation and sales of Church & Dwight Brand products in the Chinese mainland market. Church & Dwight is a leader in the Household Consumer Products and Personal Care industries, with many well-established brands. Through this cooperation, Shanghai Jahwa has introduced the world's leading high-quality personal care and home care products to China, further expanding and perfecting the home business ecosystem.

This year marks the 120th anniversary of Shanghai Jahwa. The company will continue to strengthen its abilities of independent technological innovations, enhance the development of high-end brands, optimize the structure of various channels, improve its supply guarantee capabilities, and consolidate its leading position in the industry. Shanghai Jahwa will continue to provide consumers with the best products for skin care, personal care and home care, so as to meet the consumers’ desire for a beautiful and happy life by sharing beauty with billions of consumers and with the nation.