Marubeni Co., Ltd. (603983): No Longevity, Longevity

Marubeni Co., Ltd. (603983): No Longevity, Longevity

Recommendation logic: The cosmetics industry is in a period of rapid development. In 2018, the retail sales of cosmetics that exceed the above range are at least +9.

7%, which is higher than the growth rate of retail sales of consumer goods of enterprises above the same period.

The company focuses on eye cream and builds the brand’s core competitiveness. At the same time, it actively develops new brands and new categories. At present, it has three brands, Marumi, Chunji and Lianhuo. As well-known domestic brands, it will greatly benefit from industry dividends.

The company’s performance has grown rapidly. In 2017 and 2018, revenue growth rates were 12% and 16 respectively.

5%, the growth rate of net profit attributable to mothers was 34.

3%, 33.


The scale of the cosmetics market has grown significantly, and the room for growth is huge: 2018 exceeded expectations, and the retail sales of cosmetics have reached 2619 trillion, with a compound annual average since 2009 of 9.

9%, the growth rate far exceeds the global cosmetics market2.


Compared with the overall ratio, the current average per capita consumption of cosmetics is relatively low, and the per capita consumption of cosmetics is only 22% / 25% / 26% of Japan / US / UK, which has huge room for improvement.

“Eye cream” led the way and multi-category growth: (1) From the perspective of the brand, the company currently has consumer needs with different interests in the three brands “Marumi”, “Spring Period” and “Lianhuo”.85%, and it has continued to improve in the past three years. In 2017, it acquired the Korean makeup brand “Love Fire” with the connotation of “confidence and fashion” and entered the makeup market. It is expected that in the future, the development and development of Love Fire in the makeup market will become a company.New growth points in revenue.

(2) From the perspective of category, the company focused on eye cream and set the benchmark for Marubeni eye cream in the industry, which also caused the company’s gross profit margin to be significantly higher than its peers. In 2018, the company’s eye care products achieved revenue5.

3 billion, an annual increase of 23.

9%, accounting for 33.


In fact, the company actively develops creams, lotions, masks, cosmetics and other categories, forming a healthy development pattern in which eye creams lead and multiple categories grow together.

Online and offline go hand in hand: (1) Offline is the main channel for the company’s merchandise sales.

The sales ratio of offline channels has always been higher than 50%, and the company’s offline channels increased by 7四川耍耍网 in 2018.

9% in the early stage, mainly through the development and expansion of the CS channel dividends, the current department store channels and beauty salon channels are growing rapidly.

(2) The rapid growth of the company since 2013 is mainly supported by online channels.

From 2013 to 2018, the company’s online channel merchandise sales increased at a compound annual growth rate of 45.

8%, the proportion of online channels from 10 in 2013.

3% rose to 41 in 2018.

8%, online has become one of the important channels for consumers to buy cosmetics. In 2018, the company’s online channel grew by 31%, becoming the company’s main growth driver.

Earnings forecasts and investment advice.

The EPS for 2019-2021 is expected to be 1.

18 yuan, 1.

34 yuan, 1.

54 yuan, the compound annual growth rate of net profit attributable to mother is 14.


Due to the upward trend in the cosmetics industry and the company’s strong growth ability, the first coverage was given an “overweight” rating.

Risk warning: industry competition or intensification; offline channel expansion may be less than expected; product sales may be less than expected