The traditional consumer industry is known as the cradle of White Horse. It is precisely because of stable and sustained performance growth, as well as healthy profit margins and cash flow, coupled with annual continuous cash dividends, that it often becomes the favorite of institutions, and the market value rises in step with the performance.

Of course, many consumer white horse stocks have risen a lot recently, and their stock prices have begun to adjust to varying degrees. However, recently a new player has been added to this field. Let’s understand it from the fundamentals. He is Haoyue Nursing (605009).

Haoyue Care (605009):

Haoyue Care is a leading manufacturer of personal hygiene care products in China, focusing on the research and development of personal hygiene and health care products for women, children and adults. , manufacturing and sales business. The business covers baby diapers, adult diapers, menstrual pants, sanitary napkins, wet wipes and other disposable hygiene products. It has established high-end product R&D and ODM business cooperation with many global Fortune 500 companies and well-known domestic brands. Customers include multinational companies such as Procter & Gamble, Kimberly-Clark, Unicharm, SCA (Vinda), and Kao, as well as well-known domestic companies such as Caredel, Miya, BEABA, BabyCare, Zichu, Eleser, Jingxing Healthcare, and Chongqing Baiya. Nursing product companies and maternal and infant brands. At present, the company has two production bases, Hangzhou Haoyue Factory and Jiangsu Haoyue Factory. According to data from the China Paper Association, the company’s menstrual pants sales ranked first in the domestic market share for three consecutive years from 2016 to 2018. Over 40%, sales of baby diapers and adult diapers rank among the top domestic manufacturers.

In the field of baby products, the company owns brands such as "Hope Baby", "Born Star", "Mamamia", "Sunnybaby", and "Nanakia", among which "Hope Baby" is a "Hangzhou Famous Brand Product" , "Hangzhou Famous Trademark"; in the field of adult incontinence products, the company has launched a series of brands such as "White Cross", "Kangfurui", "Huiquan" and "Haonian" for different customers; in the field of female hygiene products, the company is a relatively The company that developed menstrual pants products early has established long-term cooperative relationships with many of the world's top 500 companies and well-known domestic brands.

The company has high-quality customer resources based on the ODM model.

The sales model is divided into ODM, private label online and offline. In 2019, the revenue of the three accounted for 91.6%, 6.6% and 1.8% respectively. The brand customer resources are high-quality, and international customers include Unicharm, Kimberly-Clark, Kao, and Procter & Gamble. , Vinda, etc., domestic customers include Cardel, Miya, Freedian and Qinbaobao, etc.

Under the self-owned brand online self-operation model, it mainly sells on Tmall, Taobao, JD.com and other online stores. Directly-operated stores are opened on e-commerce platforms. In the online non-self-operated mode, goods are mainly sold to consumers or downstream customers through online platforms such as B2C or B2B. The two parties make settlements based on the actual sales of goods on the e-commerce platform and the agreed method. The online platforms mainly include Tmall supermarkets, JD.com self-operated stores and Haipaike.

Financial performance:

After 2016, the company’s performance entered the fast lane of growth from 2016 to 2019. The company's revenue rose from 465 million yuan to 1.953 billion yuan (CAGR reached 61.37%), net profit rose from 22 million yuan to 315 million yuan (CAGR reached 142.32%), net interest rate attributable to shareholders rose from 4.77% to 16.14%, and ROE It rose from 33.47% to 49.38%, and the operating performance was brilliant.

By region, domestic business grew rapidly, with revenue of 402/102/152 million from 2017 to 2019, and overseas business remained basically stable 17. By 2019, the domestic revenue share was 65.25%/80.37%/86.18%, while the overseas share dropped from 34.75% to 13.82%.

The company's inventory turnover rate was 4.61/6.39/6.88 times respectively. , a significant increase, indicating that the company continues to strengthen inventory management, inventory operation efficiency has improved year by year, and inventory digestion is in good condition.

The accounts receivable turnover rate was 21.94/24.28/22.39 times respectively, which was steadily increasing. While domestic and foreign markets continued to expand, customer collection efforts were well controlled.

ROE is higher than 45%, significantly higher than peers.

Industry trends:

The market for absorbent sanitary products is growing year by year, and consumption of female and infant sanitary products is still the main force. According to statistics from the China Paper Association, the market size of my country's absorbent sanitary products in 2018 was 118.87 billion yuan, a year-on-year increase of 4.4%. Among them, female hygiene products accounted for the highest proportion, reaching 47.4%, followed by infant hygiene products, accounting for 46.7%, and adult incontinence products accounting for 5.9%.

In terms of penetration rate, the market penetration rate of baby hygiene products in my country was only 2.1% in 2000, and has increased to 63.9% in 2018. Compared with the market penetration rate of more than 90% in developed countries, there is still Room for further improvement.

In terms of market size, the market size of baby hygiene products expanded from 23.83 billion yuan to 55.54 billion yuan from 2013 to 2018, with an average annual compound growth rate of 18.4%.

In terms of consumption, the consumption of baby hygiene products increased from 22.62 billion pieces in 2013 to 37.87 billion pieces in 2018, with an average annual compound growth rate of 10.9%. From the perspective of brands, new retail domestic brands such as Caredel, BEABA, BabyCare, and Miya are developing rapidly.

Maternal and infant specialty stores are developing rapidly, and e-commerce platforms and vertical e-commerce have become important channels.

Traditional channels for absorbent sanitary products include hypermarkets, large supermarkets, small supermarkets and other outlets. Emerging channels include maternal and infant specialty stores and chain stores, e-commerce platforms, vertical e-commerce, etc. In 2018, online retail sales exceeded 9 trillion, a year-on-year increase of 25.5%, accounting for 23.6% of the total retail sales of consumer goods.

According to Bain data, baby diapers have maintained a high e-commerce penetration rate in recent years. In 2018, e-commerce sales accounted for 51% of total baby diaper sales, an increase of 6pct compared with 2017. . At the same time, benefiting from the two-wheel drive of "Made in China" and "New Retail Format", domestic brands have risen strongly. From 2016 to 2017, the market share of domestic brands in the domestic baby diaper market increased by 6.6pct.

The company plans to use the funds raised by this listing to add a technical transformation project with an annual output of 600 million pieces of absorbent sanitary products and a construction project with an annual output of 1.2 billion absorbent sanitary products. It is expected to be completed in 2-3 years. Effectively break through production capacity bottlenecks.