Shanghai Jahwa increased revenue and profit in the first half of the year, and the effect of upgrading and transformation continued to be prominent

On the evening of August 24, Shanghai Jahwa (600315.SH) announced its financial report for the first half of 2021. The report shows that from January to June this year, the company achieved operating income of 4.21 billion yuan, a year-on-year increase of 14.3%. Its net profit attributable to the parent company was 286 million yuan, a year-on-year increase of 56%. Net profit after non-deduction increased to 332 million yuan, a year-on-year increase of 103%. It can be seen that the profitability of Shanghai Jahwa has been greatly improved. In addition, Shanghai Jahwa's operating cash flow in the first half of the year increased by 87% year-on-year. During the reporting period, the company continued to deepen the 123 business policy, that is, focus on consumers, continue to focus on TOP SKUs and popular models, actively innovate marketing models, and improve channel operation efficiency, so that the effect of reform and optimization will continue to appear. The management of Shanghai Jahwa said that in the first half of 2021, the company's various operating indicators continued to improve. In the second half of the year, the company will further accelerate the development on this basis and make every effort to complete the annual business target.

Brand innovation and diversification, all three categories achieved growth

In the first half of this year, Shanghai Jahwa's top ten private brands all achieved growth, driven by full-link initiatives such as consumer insights, product innovation and marketing innovation. Among them, the revenue of skin care category achieved nearly 30% growth, the personal care and home cleansing category achieved high single-digit growth, and the maternal and infant category achieved double-digit growth.

In terms of product innovation, the company has successfully created popular products such as Yuze Zhenan Runze Repairing Blue Copper Peptide Essence, Herborist New Seven White Whitening and Translucent Essence, "Biological Clock Cream" (Tai Chi Muscle Source Repair Cream), Kaichu Infant Water Sensitive Sunscreen Lotion and Mosquito Repellent Toilet Water, Classic Niacinamide Brightening Repair White Clay Mask and Polypeptide Anti-Wrinkle Essence, Liushen Essence Body Wash. During the 618 event, these products achieved outstanding sales performance. In terms of marketing innovation, the company keeps up with the trend of younger and more personalized consumer markets to actively innovate marketing methods. Among them, Liushen and trend IP Tokidoki launched a joint limited edition portable toilet water, and cooperated with Hennessy for the first time. At the same time, the official Herborist announced Zhang Xiaofei as the brand spokesperson, and launched a joint brand with the well-known animation IP Pokemon at the beginning. These marketing measures effectively expand the target audience and enhance the brand's stickiness and reputation.

In the first half of this year, the company has many initiatives in brand innovation. For example, in March, the company signed an in-depth cooperation agreement with the Tmall New Product Innovation Center (TMIC). With the help of its big data analysis functions such as knowledge base + incubator, intelligent new product portrait + 3D measurement, digital white bottle + test sales diagnosis function, the company has a comprehensive insight into consumers' minds, so as to quickly develop and create products that meet consumers' needs. In June, the company established a scientific and technological innovation partnership with the world's leading chemical company BASF. In this way, the company will be able to obtain global cutting-edge innovative technologies, exclusive customized advanced raw materials and solutions that meet market demands, so as to better meet the demands of consumers and help create popular products. In August this year, the company also set up a brand incubation center to start recruiting new and cutting-edge brands to create more diverse brands and product choices for consumers.

Realize dual growth of online and offline, expand new retail to exert force

In the first half of the year, Shanghai Jahwa continued to deepen its channel advancement. During the reporting period, offline channels achieved a growth of 15.2% by actively developing new retail, shrinking long-tail and low-efficiency stores, and focusing on head stores. The company comprehensively promoted the implementation of new retail and formed a "3+3" smart retail operation system. Specifically, on the To C side, the company vigorously develops the home platform, the store platform and the smart cloud store to further reach consumers. On the To B side, the company has opened up cooperation links with merchants based on the Internet distribution system, community operations, and retail terminal membership operations. During the reporting period, the company's new retail business achieved a year-on-year growth of 148%, accounting for more than 10% of the domestic offline business. In addition, in the first half of this year, the company also carried out in-depth cooperation with Watsons. By leveraging its industry-leading digital operation system to empower digital operations and expand new retail businesses.

During the reporting period, the company's online channels also achieved a growth of 12.7% through multi-channel user recruitment and drainage, development and expansion of new channels, etc. The company actively promotes the transformation of online channels and develops the dual-platform model of Taobao and Douyin. The company focuses on expanding the Douyin channel, realizing Douyin's potential sellers live broadcast grass planting and short video packaging cooperation. Taking the Yuze brand as an example, in the 618 promotion, the brand entered the TOP20 of Tmall's beauty category for the first time. Since May this year, Yuze Fruit Acid Shower Gel has sold over 80,000 bottles through the Douyin store and Tmall dual channels. In August this year, Yuze also participated in the 818 Douyin Gala. During the 818 promotion period, the brand’s GMV in a single day exceeded 160w, and the cumulative GMV in Yuze’s live broadcast room exceeded 10 million.

Implement the digital 123 strategy and build a private domain ecosystem

Focusing on digital transformation, Shanghai Jahwa has implemented a series of measures this year and put forward the "Digital 123 Strategy". Specifically, focus on consumers, take customer acquisition cost optimization and user value maximization as two basic points, and take brand globalization, operation digitization, and digital assetization as three boosters. At the front end, the company empowers brand crowd assets and terminal retail through digitalization, and creates multi-dimensional matrices such as Little Red Book and Douyin to improve the efficiency of marketing drainage. At the back end, the company starts from R&D, planning, production and sales to build a digital operation system. In the whole link of product development, the company uses big data to drive innovation, incubate popular products, increase the speed of product development, bring more popular products, and build brand barriers.

In the process of digital transformation, the company has also built a private domain ecosystem with consumers as the center. During the reporting period, the company's top ten private brands and four agency brands built a brand private domain of about 250,000 people and 800 communities. Specifically, the company recruits users through multiple channels to attract traffic to private domains, and realizes user retention and repurchase through products, services, and benefits. At the same time, users are driven to cross-purchase under the full-life-cycle value management model of consumers. In the future, the company will also build a user data center through private domain operations to form a closed loop of recommendation, purchase, and sharing. Consumers will reach different categories and different products through the introduction of a single brand into the private domain ecological cycle, thus forming a brand cross-repurchase network, and the traffic cost will be greatly reduced.

This year marks the 20th anniversary of Shanghai Jahwa's listing. As a century-old leading enterprise in the domestic beauty and daily chemical industry, the company is committed to pursuing the most beautiful products and services with perfection, and creating maximum value for consumers, employees, shareholders and society. In the first half of the year, the company also introduced the leading ESG responsibility management concept in the international capital market, and released a medium- and long-term planning outline. The company will promote sustainable development in the three dimensions of green and low carbon, social responsibility and corporate governance. In the future, Shanghai Jahwa will continue to implement the "123 Management Policy". Shanghai Jahwa takes the vision and goal of becoming a leader in China's beauty and daily chemical industry and bringing Chinese beauty to the world, with the corporate slogan and philosophy of "hundred-year ingenuity, perfection and beauty". The company will satisfy people's yearning for a better life on a broader and richer level.