Editor of China Economic Net: Wuhu Sanlian Forging Co., Ltd. (hereinafter referred to as "Sanlian Forging") will hold its initial meeting on March 14th. The sponsor (lead underwriter) is Essence Securities Co., Ltd., and the sponsors are Li Yang and Zeng Zeyun.

　　From January to June in 2019, 2020, 2021 and 2022, Sanlian Forging realized operating income of 530,472,300 yuan, 617,844,800 yuan, 929,259,500 yuan and 472,336,900 yuan respectively, and realized net profit attributable to owners of the parent company of 53,108,200 yuan respectively. 8,695,100 yuan, and the net profit attributable to the owners of the parent company after deducting non-recurring gains and losses was 47,730,700 yuan, 64,815,500 yuan, 66,761,500 yuan and 26,013,300 yuan respectively.

　　During the reporting period, the weighted average return on equity calculated by Sanlian Forging based on the net profit attributable to ordinary shareholders of the company after deducting non-recurring gains and losses was 13.48%, 14.96%, 13.04% and 4.63% respectively.

　　In each period of the reporting period, the net cash flow generated by Sanlian Forging was RMB 52,222,500, RMB 40,058,800, RMB 39,061,400 and RMB 42,757,300, with net cash ratios of 0.98, 0.55, 0.51 and 1.49 respectively. The cash received from selling goods and providing services was 529,879,400 yuan, 568,199,800 yuan, 945,218,800 yuan and 364,172,000 yuan respectively, and the cash-to-cash ratios were 1.00, 0.92, 1.02 and 0.77 respectively.

　　During the reporting period, the gross profit margin of Sanlian Forging was 26.76%, 26.64%, 21.15% and 20.41% respectively, of which the gross profit margin of main business was 27.94%, 27.71%, 22.70% and 21.81% respectively.

　　According to the interface news report, at present, new energy vehicles are still the new growth point of the automobile industry. In 2021, the global and domestic new energy vehicle industries are in a period of rapid growth, and the sales of new energy vehicles increased by 107.92% and 157.57% respectively.

　　At present, the triple forging products can be used for new energy vehicles except the high-pressure common rail and the pump body, but only the electric drive hollow shaft products are special for new energy vehicles, mainly used in the electric drive system and gearbox of the transmission system of new energy vehicles. In addition, the company’s lock claw products are used in the shift actuator of hybrid and electric vehicles to realize the shift selection and shift function of the shift head.

　　At present, Sanlian Forging comes from insufficient expansion in the field of new energy. During the reporting period, the product income of Sanlian Forging from new energy vehicles was 3,297,000 yuan, 5,121,800 yuan, 23,604,200 yuan and 22,836,600 yuan respectively, accounting for 0.65%, 0.87%, 2.74% and 5.18% of the main business income respectively.

　　It is planned to raise 435 million yuan.

　　Sanlian Forging is mainly engaged in research and development, production and sales of automobile forging parts. The company’s products are mainly used in automobile power system, transmission system, steering system, suspension support and other systems that require high mechanical performance and safety performance of parts.

　　Sanlian Forging plans to land on the main board of Shenzhen Stock Exchange this time. The number of shares to be publicly issued this time is no more than 28.38 million shares, and the number of shares to be issued is not less than 25% of the total share capital of the company after this issuance. The funds to be raised this time are 434.6818 million yuan, and the net amount after deducting the issuance expenses will be used for the technical renovation and machining supporting construction project of precision forging production line, the capacity expansion project of high-performance forging production line (50MN), the construction project of R&D center and supplementary working capital.

　　As of the signing date of the prospectus, the joint actual controllers of Sanlian Forging are Sun Guofeng, Zhang Yiheng, Sun Guomin and Sun Renhao. Sun Guofeng and Sun Renhao are father and son, Sun Guofeng and Sun Guomin are brothers, and Sun Guofeng, Sun Guomin and Zhang Yiheng are uncles and nephews.

　　Sun Guofeng directly holds 26.91% of the shares of Sanlian Forging. He is the largest shareholder of Sanlian Forging and serves as the chairman and general manager of the company. Zhang Yiheng directly holds 26.77% of the shares of Sanlian Forging and serves as a director of the company; Sun Guomin directly holds 26.77% shares of Sanlian Forging; Sun Renhao directly holds 1.92% of the shares of Sanlian Forging as the deputy general manager of the company; Sun Guofeng, as the executive partner of Wuhu Sanlian Holding Partnership (Limited Partnership) (hereinafter referred to as Sanlian Partnership), can actually control the voting rights of Sanlian Forging 4.10% shares held by Sanlian Partnership. Sun Guofeng, Zhang Yiheng, Sun Guomin and Sun Renhao actually control the voting rights of 86.47% shares of Sanlian Forging, which can have a significant impact on the shareholders’ meeting and the board of directors of Sanlian Forging.

　　Sun Guofeng, Zhang Yiheng, Sun Guomin and Sun Renhao signed the Concerted Action Agreement on July 12, 2018, which stipulated: "All parties guarantee to adopt the same expression of will when exercising the rights of shareholders and directors and business decisions of the company, especially when exercising the right to convene, propose and vote, so as to consolidate their control position in the company and maintain the stability of the actual control right of the company. If all parties negotiate on relevant proposals or voting and decision-making matters,

　　Sun Guofeng, chairman and general manager of Sanlian Forging, male, China nationality, no permanent residency abroad, born in April 1968, junior high school education. From March 1994 to January 2010, he served as the director, executive director and general manager of Wenzhou Sanlian (formerly known as Ruian Guohuan Screw Factory and Ruian Sanlian Forging Factory); From April 2004 to March 2018, he served as a supervisor of Ruian Xinlian Auto Parts Co., Ltd.; From June 2004 to October 2018, he served as a limited supervisor, executive director and general manager of Sanlian; From October 2015 to May 2017, he served as executive director of Wuhu Mofei Ergonomics Technology Co., Ltd.; From December 2015 to August 2018, he served as supervisor of Huangshan Lianxin; From June 2017 to November 2020, he served as the supervisor of Huzhou Sanlian; Since July 2017, he has served as executive director and general manager of Wuhu Wanlian; Since October 2017, he has served as chairman and director of Xinlian Seiko; Since October 2018, he has served as executive director and general manager of Wuhu Shunlian; Since October 2018, he has served as the chairman and general manager of Sanlian Forging; Since November 2019, he has served as the executive partner of Sanlian Partnership; Since April 2020, he has served as executive director and general manager of Wuhu Yilian.

　　Zhang Yiheng, director of Sanlian Forging, male, China nationality, without permanent residency abroad, born in August 1992, with a college degree. From June 2016 to July 2017, he served as the purchasing manager of Wenzhou Sanlian; From July 2017 to June 2020, he served as a supervisor of Wuhu Wanlian; From February 2018 to October 2018, he served as a limited director of Sanlian; Since February 2018, he has served as director and chairman of Xinlian Seiko; Since January 2018, he has served as executive director and general manager of Sanlian Parts; Since October 2018, he has served as a director of Sanlian Forging.

　　Sun Guomin, executive director and general manager of Huzhou Sanlian, a wholly-owned subsidiary of Sanlian Forging, male, China nationality, without permanent residency abroad, was born in February 1976, with a high school education. From March 1994 to July 2021, he served as sales manager, vice president of marketing, executive director and general manager of Wenzhou Sanlian; From March 2001 to February 2008, he served as the general manager of Huaying Yong Guang Forging Machinery Factory; From June 2011 to July 2012, he served as executive director and general manager of Ruian Sanlian Investment Consulting Co., Ltd.; From June 2004 to March 2014, he served as the general manager of Sanlian Limited; From April 2013 to December 2013, he served as the supervisor of Ruian Kaisheng Trading Co., Ltd.; Since August 2019, he has served as deputy general manager of Sanlian Parts; Since March 2021, he has served as executive director and general manager of Huzhou Sanlian.

　　Sun Renhao, deputy general manager of Sanlian Forging, male, China nationality, born in June 1994, with a college degree. From March 2015 to October 2018, he served as the sales manager of Sanlian Limited; From February 2018 to March 2021, he served as executive director and general manager of Huzhou Sanlian; From October 2018 to October 2020, he served as secretary of the board of directors of the company; From October 2018 to November 2020, he served as a director of the company; Since November 2020, he has served as deputy general manager of Sanlian Forging.

　　Continuous increase in performance

　　From January to June in 2019, 2020, 2021 and 2022, Sanlian Forging realized operating income of 530,472,300 yuan, 617,844,800 yuan, 929,259,500 yuan and 472,336,900 yuan respectively, and realized net profit attributable to owners of the parent company of 53,108,200 yuan respectively. 8,695,100 yuan, and the net profit attributable to the owners of the parent company after deducting non-recurring gains and losses was 47,730,700 yuan, 64,815,500 yuan, 66,761,500 yuan and 26,013,300 yuan respectively.

　　In each period of the reporting period, the net cash flow generated by Sanlian Forging was RMB 52,222,500, RMB 40,058,800, RMB 39,061,400 and RMB 42,757,300, with net cash ratios of 0.98, 0.55, 0.51 and 1.49 respectively. The cash received from selling goods and providing services was 529,879,400 yuan, 568,199,800 yuan, 945,218,800 yuan and 364,172,000 yuan respectively, and the cash-to-cash ratios were 1.00, 0.92, 1.02 and 0.77 respectively.

　　In 2022, Sanlian Forging realized an operating income of 1,049,782,700 yuan, a year-on-year increase of 12.97%; The net profit attributable to shareholders of the parent company was 94,840,100 yuan, a year-on-year increase of 23.75%; The net profit attributable to shareholders of the parent company after deducting non-recurring gains and losses was 83,918,100 yuan, a year-on-year increase of 25.70%; The net cash flow from operating activities was RMB 104,045,100, a year-on-year increase of 166.36%.

　　Combined with past performance, market demand and orders, Sanlian Forging expects the company to realize an operating income of 265,128,500 yuan from January to March 2023, a year-on-year increase of 2.39%; The net profit attributable to shareholders of the parent company was 17,393,500 yuan, a year-on-year increase of 1.41%; The net profit attributable to shareholders of the parent company after deducting non-recurring gains and losses was 15,453,300 yuan, a year-on-year increase of 6.31%.

　　Gross profit margin fell continuously.

　　During the reporting period, the gross profit margin of Sanlian Forging was 26.76%, 26.64%, 21.15% and 20.41% respectively, of which the gross profit margin of main business was 27.94%, 27.71%, 22.70% and 21.81% respectively.

　　During the reporting period, the average gross profit margin of the main business of comparable listed companies in the same industry was 25.08%, 22.34%, 23.85% and 22.05% respectively.

　　During the reporting period, gross profit margins of domestic main business of Sanlian Forging were 29.98%, 29.58%, 23.85% and 21.38% respectively, and gross profit margins of overseas main business were 16.45%, 16.70%, 18.25% and 23.05% respectively.

　　At the end of June 2022, the book value of accounts receivable was 226 million yuan.

　　At the end of each reporting period, the book value of accounts receivable of Sanlian Forging was 142,228,300 yuan, 163,244,400 yuan, 192,470,800 yuan and 226,083,600 yuan respectively, accounting for 43.32%, 44.41%, 36.33% and 39.04% of current assets respectively; The balance of accounts receivable was 152,668,900 yuan, 173,553,900 yuan, 204,342,700 yuan and 240,289,600 yuan respectively, accounting for 28.78%, 28.09%, 21.99% and 50.87% of operating income respectively.

　　In each period of the reporting period, the accounts receivable turnover rate of Sanlian Forging was 3.38 times, 3.79 times, 4.92 times and 2.12 times respectively, and the average accounts receivable turnover rate of comparable listed companies in the same industry was 3.79 times, 3.62 times, 3.99 times and 1.77 times respectively.

　　At the end of each reporting period, the bills receivable of Sanlian Forging were 10,697,800 yuan, 14,666,200 yuan, 10,964,500 yuan and 8,806,500 yuan, respectively, and the fair value of receivables financing was 24,547,900 yuan, 16,255,600 yuan, 40,141,700 yuan and 28,718,800 yuan, respectively.

　　Based on this calculation, at the end of each reporting period, the receivables of Sanlian Forging were 184,807,200 yuan, 199,816,700 yuan, 250,370,900 yuan and 275,181,300 yuan respectively.

　　At the end of June 2022, the book value of inventory was 251 million yuan.

　　At the end of each reporting period, the book value of Sanlian forging inventory was 112,799,800 yuan, 122,719,000 yuan, 238,363,500 yuan and 250,858,300 yuan respectively, accounting for 34.36%, 33.39%, 44.99% and 43.32% of current assets respectively, and the book value of inventory at the end of the reporting period was 43.32%.

　　In each period of the reporting period, the inventory turnover rate of Sanlian Forging was 3.31 times, 3.47 times, 3.77 times and 1.44 times respectively, and the average inventory turnover rate of comparable listed companies in the same industry was 3.15 times, 3.13 times, 3.04 times and 1.17 times respectively.

　　Interface news: insufficient expansion of new energy field

　　According to the interface news report, at present, new energy vehicles are still the new growth point of the automobile industry. In 2021, the global and domestic new energy vehicle industries are in a period of rapid growth, and the sales of new energy vehicles increased by 107.92% and 157.57% respectively.

　　Source: China Automobile Industry Association.

　　According to the data of China Association of Automobile Manufacturers, from 2019 to 2021, the domestic automobile sales were 25.769 million, 25.311 million and 26.275 million respectively, the domestic new energy vehicles sales were 1.206 million, 1.367 million and 3.521 million respectively, and the market penetration rate of new energy vehicles was 4.68%, 5.40% and 13.40% respectively.

　　The State Council released the peak carbon dioxide emissions Action Plan before 2030 in October 2021, which pointed out that by 2030, the proportion of new energy and clean energy vehicles will reach about 40%. In the future, there is still much room for improvement in the market penetration rate of new energy vehicles.

　　At present, the triple forging products can be used for new energy vehicles except the high-pressure common rail and the pump body, but only the electric drive hollow shaft products are special for new energy vehicles, mainly used in the electric drive system and gearbox of the transmission system of new energy vehicles. In addition, the company’s lock claw products are used in the shift actuator of hybrid and electric vehicles to realize the shift selection and shift function of the shift head.

　　Lockclaw and hollow shaft products are newly added products of the company in 2019 and 2020, and hollow shafts belong to shaft products. In 2020 and 2021, the sales of hollow shafts were not seen in the top five customers’ purchases of shaft products of the company. It was not until the first half of 2022 that Wuxi () Technology Group Co., Ltd. purchased hollow shaft products in Sanlian Forging, and the total number of purchased motor shafts and hollow shafts was 57,500.

　　Image source: prospectus

　　By June 30th, 2022, the company has entered the designated development projects of new energy automobile parts of well-known automobile manufacturers such as Daimler, Volkswagen, General Motors, Audi, BMW, (), BYD Toyota, Weilai, Ideality, Tucki, SAIC Volkswagen, SAIC-GM, SAIC, Great Wall, Chery and Geely.

　　Image source: prospectus

　　Image source: prospectus

　　However, most of the projects are still in the APQP and PPAP certification stage, and many parts and components involved are purchased by fork. In 2021 and the first half of 2022, the gross profit margin of the company’s fork unit was only 11.00% and 12.45%, respectively, and the profit was relatively thin.

　　At present, Sanlian Forging comes from insufficient expansion in the field of new energy. During the reporting period, the product income of Sanlian Forging from new energy vehicles was 3,297,000 yuan, 5,121,800 yuan, 23,604,200 yuan and 22,836,600 yuan respectively, accounting for 0.65%, 0.87%, 2.74% and 5.18% of the main business income respectively.

　　International Finance News: Suppliers may have "stories"

　　According to the International Finance News, Wenzhou Sanlian Auto Parts Co., Ltd. (hereinafter referred to as "Sanlian Parts") is a wholly-owned subsidiary of Sanlian Forging.

　　This subsidiary was involved in an interesting case.

　　According to the executive ruling in March 2022, the dissident Xiangtan Xinhuida Electroplating Co., Ltd. (hereinafter referred to as "Xinhuida") believes that Sanlian Parts has always been a customer of Xinhuida, and later, because Sanlian Parts are going to be listed, it is necessary to have a complete environmental assessment procedure, and Xinhuida rents the factory building of Hunan Zhaoliang Electroplating Co., Ltd. (hereinafter referred to as "Hunan Zhaoliang"), and all enterprises in the park use the relevant qualifications of electroplating environmental assessment of Hunan Zhaoliang. At present, Hunan Zhaoliang has collected Xinhuida’s payment amount of RMB 349,200 in December 2021.

　　Regarding whether Xinhuida uses Hunan Zhaoliang’s qualification to sign the contract and collect and transfer the payment, the execution ruling does not give a clear answer. In addition, the court held that Article 25, paragraph 1 (3) of the Provisions of the Supreme People’s Court on Several Issues Concerning People’s Courts Handling Cases of Execution Objection and Reconsideration stipulates that if an outsider objects to the case, the bank deposit shall judge the obligee according to the name of the account of the financial institution. In this case, the money involved was deposited into the account opened by Hunan Zhaoliang in Xiangxiang Sub-branch (). According to the above laws and regulations, the right holder of the money is Hunan Zhaoliang, not Xinhuida. For Hunan Zhaoliang’s property, our court can execute it. Therefore, the dissident’s view that the money involved belongs to him and should be unsealed is inconsistent with the above legal provisions.

　　Abstract of enforcement ruling, data source: China Judgment Document Network.

　　It should be pointed out that the Sanlian Forging Declaration shows that Xinhuida is the fourth largest outsourcing supplier of Sanlian Forging in 2020, and the related purchase amount is 497,100 yuan. In 2021, Xinhuida did not become the top five outsourcing suppliers of Sanlian Forging. Hunan Zhaoliang was not the top five outsourcing suppliers of Sanlian Forging in 2019 and 2020, but became the fifth largest outsourcing supplier of Sanlian Forging in 2021, with a related purchase amount of 567,300 yuan.

　　Then, does Xinhuida use the qualification of Hunan Zhaoliang to sign the cooperation contract of Sanlian parts? If so, do the suppliers of Sanlian Forging have similar situations?

For a long time, people always associate China brand cars with the word "cheap", but in recent years, China automobile brands have developed rapidly. It’s a medium-sized car. I don’t know how much you know about it. Let’s take a look at it together.

Let’s take a look at the appearance of the red flag H6 first. The front style of the red flag H6 is very avant-garde and looks sporty. Coupled with the domineering headlights, it looks very full. The car is equipped with LED daytime running lights, front fog lights, automatic opening and closing, adaptive far and near light, delayed closing and so on. Coming to the side of the car, the size of the car body is 4990 mm * 1880 mm * 1455 mm. The car uses exquisite lines, giving people a very dynamic feeling. With large-sized thick-walled tires, the overall visual effect is very cold. In terms of the rear end, the rear end looks more comfortable, the taillight style is more stable, and the overall look is very delicate.

When I came to the red flag H6 car, the interior design was lovely, which highlighted the hierarchical effect. The car looks very good outside the steering wheel, made of real leather, carbon fiber/suede, and has a high palm fit. Take a look at the central control. The car is equipped with a simple touch-sensitive LCD central control screen, which makes the interior design quite layered and looks very domineering. The dashboard and seats give people a good feeling, too. Let’s take a look. The dashboard design is remarkable and looks domineering. The car uses a leather /Alcantara mixed seat, which is wrapped in place, with exquisite materials and comfortable ride.

Hongqi H6 is matched with an automatic manual transmission (AT) gearbox, with an acceleration time of 6.8s per 100 kilometers, which has good power performance and is completely OK for daily use.

The overall performance of the trunk space of Hongqi H6 is excellent, with regular shape, which is convenient for people to take their luggage. In addition, the car is equipped with fatigue warning, anti-lock braking (ABS), LED daytime running lights, brake assist (EBA/BAS, etc.), braking force distribution (EBD) main driving airbag, co-pilot airbag, knee airbag, side airbag curtain, front side airbag and other safety configurations.

Such a car with the right price is enough to meet the daily practical needs, and it doesn’t take much thought to maintain it at ordinary times, and the cost performance is good. If you are interested, you might as well experience it.

　　It is said that the eyes of the masses are discerning. What do you want to see when buying a car? Of course, it is sales volume. When you are hesitant, you can never make a mistake in choosing a brand that more people buy. As the global sales champion of China SUV in 2023, Chery Automobile’s morale was quite high at the beginning of the year. From January to February, Chery Automobile sold a total of 348,019 vehicles, and its Tiggo series won the global sales champion of China brand fuel SUV in 2023. In March, Tiggo 9 expanded with its head held high, which is expected to hand over more beautiful transcripts. Especially with the arrival of the "Dragon Head Up" solar term, the temperature has warmed up and climbed, and the willingness to travel after being dormant for a winter has also begun to sprout. Tiggo 9 has a deep understanding of China’s family travel needs and is the best choice for a 200,000-class domestic SUV.

　　Start a strong momentum and set out for the N possibilities in spring.

　　The journey to spring is always exciting and fascinating. Tiggo 9 is equipped with Kunpeng 2.0T GDI, which matches Magna’s latest wet powershift 7DCT or Aisin 8AT double gold power combination, and the peak torque is 400N·m, providing strong power support for the passionate mood on the road.

　　The four-wheel drive version of Tiggo 9 has seven modes: economy, standard, sports, mud, sand, cross-country and snow, and the response time is ≤100ms. Whether the destination points to mountains and seas or gallops in Yuan Ye, all-around player Tiggo 9 can easily cope.

　　"Maglev" suspension, the main travel road, smooth and smooth.

　　Infinite spring is desirable, and it is equally important to encounter different road conditions during the journey and whether the driving experience is comfortable. Tiggo 9, the only model in its class equipped with CDC "magnetic suspension", relies on five vehicle condition monitoring sensors, four electromagnetic shock absorbers and a controller to adjust the body posture in real time within milliseconds. As a driver, you can clearly feel the perfect sense of freely switching between "soft" and "hard" running. Lu Yu’s gravel and potholes are inevitable during the hiking trip, so the suspension can absorb redundant vibration, minimize the sense of continuous bumps, and give passengers a comfortable feeling of smooth passing.

　　In addition, with the front McPherson+rear multi-link suspension support, the support and follow-up of Tiggo 9 also have a good performance. The 4.8-meter body is like a tiger sniffing roses when cornering and overtaking, and it is huge, but delicate and silky.

　　Stretch to your heart’s content, super comfortable cockpit, no fear of trudging.

　　Under the influence of the breath of spring, my body and mind began to stretch, and I yearned for a broader world and space. Tiggo 9 has a length of 4820mm, a width of 1930mm and a wheelbase of 2820mm. The front and rear legs and head are spacious, and the main and passenger seats are equipped with electric adjustment, memory, heating and ventilation, as well as electric adjustable lumbar support, leg support and pneumatic massage, which are rare in the same class. The two rows of comfortable sleeping headrests, the heating function of cushions on both sides, and the 540 stereo surround air conditioning system provide a high-quality car rest experience. The Tiggo 9 is in place. In addition, the car is equipped with a 14-speaker SONY stereo, a 256-color waterfall-type melody atmosphere lamp and an intelligent fragrance system … to create a leapfrog experience of the flagship model in terms of hearing, vision and touch, so the pleasure of such a trip to the spring will be doubled.

　　Exploring the journey of spring needs 100% security to support it.

　　Spring is warm, everything grows, and the scenery along the way is charming. Tiggo 9 is more concerned about how to ensure the safety of driving. ACC adaptive cruise, 540-degree panoramic image, traffic sign recognition, etc. The guards are complete. In addition to active safety, passive safety must also be paid attention to. The proportion of high-strength steel used in the whole vehicle is as high as 85%, and the body is stronger. At the same time, the remote airbag between the main driver and the auxiliary driver can effectively avoid the injury caused by the secondary collision.

Chupin, 21st Century Innovation Capital Research Institute

With the rise of Z generation and social platforms in China, in the past two or three years, a large wave of e-commerce has appeared in the outlet of new consumption, and countless new consumer brands have sprung up. With the help of online celebrity’s new traffic portal, through cooperation with Li Jiaqi, Viya and massive Xiaohongshu KOC, it seems that the brand has become popular and "out of the circle" overnight.

Behind the rapid rise of domestic beauty is the blessing of capital. According to the "2021 Beauty Industry Trend Insight Report" released by CBN Data, in 2020, the beauty industry disclosed that the investment and financing amount was 4.812 billion yuan, a growth rate of 324% compared with 1.135 billion yuan in 2019. With Dongfeng, Perfect Diary and Winona’s IPO, Winona’s parent company Betaine (300957) went public in March this year.

Starting with flow

Back in 2016, Huang Jinfeng just stepped down from Yu Nifang and established Yixian E-commerce (YSG.N). The company name is Huang Jinfeng to pay tribute to his alma mater, Sun Yat-sen, and Chen Yuwen and Lu Jianhua, the co-founders of FMCG brand, are friends of Huang Jinfeng’s college classmates for many years. Zhang Lei of Gaoyan Capital once asserted that China must have a chance to give birth to a new L ‘Oré al, but is the "new L ‘Oré al" a perfect diary? Perhaps it is still open to question.

Undoubtedly, the capital blessing of the "golden owners" has provided it with a steady stream of power. Since March 2017, Yixian E-commerce has launched the first perfect diary of cosmetics brand. With its cost-effective products featuring "big brand replacement", it has a consumer group that meets its positioning among many high-end brand cosmetics. Whenever users have complaints about the experience of perfect diary products, there will always be something like "only a few tens of dollars, what else do you want!" Comments. In a short period of three and a half years, Yixian E-commerce has completed seven times of financing and gone to IPO, and the capital lineup behind it is also extremely luxurious, including Gaoyan Capital, which holds 13.8%, Zhenge Fund, which holds 10.5%, and Gaorong Capital, which holds 9.2%, as well as many big-name investment institutions such as Boyu Capital, Tiger Global and Sequoia China. It has been revealed that in last year’s round of financing, "new shareholders came in by grabbing, otherwise they were done by old shareholders."

Obviously, the business model of Perfect Diary is the most typical "Internet play" in recent years. It was pushed to the market after relying on funds to seize the market crazily, and its fast-moving speed is also a "double-edged sword". According to the national enterprise credit publicity information system, there are 38 patents of Perfect Diary (Yixian E-commerce), all of which are appearance patents, and there is no core R&D patent information such as component technology.

From 2018 to 2020, the sales and marketing expenses of Yixian e-commerce were 309 million yuan, 1.251 billion yuan and 3.412 billion yuan, respectively. The overwhelming advertisements revealed the new generation of consumers’ cognition of the perfect diary. In fact, spending money on marketing has achieved a lot. Generation Z has gradually become the main force of consumption. Nowadays, brands can quickly establish consumers’ minds and brand awareness by using the effects of online celebrity and stars. Packaging theme design with "ingenuity" and "face value" and cross-border joint names can quickly capture consumers’ hearts. In the beauty track, cross-border joint products have exploded in just three years, with a growth rate of nearly three times.

The turning point occurred in February 2018. The keen marketing team of Perfect Diary found that many users published brand color testing and grass planting content on Little Red Book. Planting grass on the surface is actually dark and wide, which makes Perfect Diary see the possibility of new users’ growth. The data shows that in June 2017, the number of users of Little Red Books was only 50 million, but it surged to 100 million yuan in March of the following year, and the user activity was close to 30 million, three times that of a year ago. Perfect Diary rode the express train of Xiaohongshu, and the sales volume was singing all the way.

Product dilemma

However, beauty brands have to speak with products after all. Despite the large number of new products on the Perfect Diary, there is still no impressive and timeless big single product. On the cost side, big single products do not need to be upgraded repeatedly, which is difficult to be eliminated and does not require high new product promotion fees. However, the money of the perfect diary is spent on advertising, and the product research and development that needs real money most is far from enough. Perfect Diary’s R&D expenditure in 2020 is only 67 million yuan, accounting for 0.93% of revenue. In 2018 and 2019, it is only 3 million yuan and 23 million yuan.

As a result of the lack of research and development, although the products are dazzling, they have always changed their forms and the repurchase rate is not optimistic.According to the data of CICC Research Institute, after trying to cooperate with Xiaohongshu, Tik Tok and KOL, the sales of Shiseido, L ‘Oreal and Estee Lauder all increased by more than 60% in 2020, while the sales of Perfect Diary increased by only 22%. In addition, another major "injury" of Perfect Diary is its low gross profit, which positions the brand as "big brand replacement", but its gross profit margin is 10% to 20% lower than that of Estee Lauder and Huaxi Bio. If you want to break the dilemma of low gross profit, the simplest and most direct way is to raise the price, but rashly raising the price will inevitably affect the biggest "advantage" of the perfect diary-cost performance. Therefore, Perfect Diary came up with the method of "reducing the quantity without reducing the price". Under the condition of normal lipstick net content of 3 to 4 grams, the "small heel" lipstick is only 0.8 grams.

At present, there are more and more enterprises on the national makeup track, and with the extrusion of foreign competing products, "cost performance" is no longer the most important cornerstone for domestic products to break through. At the moment when market recognition is increasing, quality is the goal that domestic beauty brands need to pursue.

Today, the domestic beauty industry has a perfect supply chain and industrial chain, which provides a very fertile soil for domestic brands to go to sea.According to CBNData’s "2021 Beauty Industry Trend Insight Report", Guangzhou has become a well-deserved incubator for new beauty consumer brands.According to the report data, nearly three-quarters of Tmall sellers in Guangzhou are mainly engaged in "face value industry" such as beauty care, which is 1.6 times of the national proportion; Guangzhou has more than half of the number of domestic cosmetics companies filing.In the past three years, the sales of Guangzhou beauty and skin care brands on Tmall platform have nearly tripled, such as Perfect Diary, Flower West, Tangduo, Zhiben and Runbaiyan.

Obviously, the biggest possibility for domestic brands to choose to go to sea is that their domestic losses are serious, and they urgently need to open up new markets and take international routes to raise prices for future research and development of high-end products.With the listing of Yixian e-commerce, I once said that I would take the perfect diary of domestic brand Thorn Road. The best interpretation of going out to sea is to try to acquire international brands and then turn to high-end market development.On October 30, 2020, Perfect Diary announced that it had reached an agreement with Pierre Fabre Group of France to acquire its high-end beauty brand Galénic；; On March 2, 2021, Perfect Diary said that it had reached an agreement with Manzanita Capital, a venture capital institution headquartered in London, to acquire its high-end skin care brand "Hermes in makeup remover" Eve Lom.The successive high-end acquisitions have made Perfect Diary’s cash flow tight. According to the annual report, the net cash flow generated by Perfect Diary’s annual business activities in 2020 was 983 million yuan.

At present, the most popular beauty products are lipstick, eye shadow and blush. According to the data of China Commercial Industry Research Institute, the export volume of beauty cosmetics and toiletries in China in 2020 is 999,000 tons, up by 4.3% year-on-year. With the help of e-commerce brands such as Tmall and Amazon, it is easier for new brands to go to sea.

In the future, it is still unknown that the perfect diary plan will cost billions of dollars in marketing expenses. However, when the heat and sales shine, will the perfect diary develop "luminous" products that will make the market refreshing?What consumers are more concerned about is how to gain a foothold in the market where new products are repeated after eating the perfect diary of traffic bonus.

The product business model of Perfect Diary is DHC, that is, Direct to Customer. In the list of foundries published in Perfect Diary, Ying Teli, Kosmeishi, Shanghai Zhenchen, etc. are all foundries of internationally renowned big-name nature halls, Polaiya, Dior, Chanel and Maybelline. With years of OEM experience,These foundries also have both design and R&D capabilities. It is not difficult to understand that behind the endless stream of new products, the R&D expenses account for only 0.9%.What will be the next step of the perfect diary under the loss? Obviously, the product quality of Perfect Diary can’t compete with the same brand, but the price is in an awkward position of "more than enough, more than enough". Consumers are paying for its "eye-catching" theme and packaging, and the name of "ZARA in beauty industry" is well deserved.

Although the performance of Marubi Co., Ltd. (603983) does not rely too much on marketing, it is also labeled as "single product". Marubi Co., Ltd. has three brands: Marubi, Chunji and Love Fire, and its core brand and revenue force are Marubi, which accounts for more than 90% of the company’s total revenue all the year round.

The advantage of Marumi lies in the solid foundation of its inherent customers. Since 2017, Marumi’s net interest rate has always remained between 20% and 30%, and Polaiya (603605) has also remained above 10%.

Track change

It is not easy for Marubi to cultivate high-end products and face the fierce competition in the cosmetics market with high gross profit margin when only Marubi brand stands out.Marubi’s gross profit margin in the first quarter of 2021 was 63.91%, which was 2.29 percentage points lower than the 66.20% at the end of 2020. Compared with the gross profit margins of benchmark enterprises Polaiya (64.09%) and shanghai jahwa (64.56%) in the first quarter of 2020, Marubi no longer has the advantage of high gross profit margin.

At the moment when the explosion of beauty products has sprung up, Marubi shares urgently need to find new consumption points to make consumers pay for high prices, so as to seize new profit growth points and highlight the encirclement. It is worth noting that on November 12, 2020, Marubi announced that it planned to abandon the original "make-up" fundraising project. The investment in the new project is estimated to be 276 million yuan, which will mainly focus on skin care products, supplemented by make-up products. After completion, it is expected to add 3,382.5 tons of skin care products and 200 tons of make-up products, fully reaching the annual output value of about 596 million yuan, which will continue to deepen the layout of the company’s skin care industry chain.

From this point of view, Marumi shares plan to abandon the fast-growing makeup track and turn to the skin care track.Not only that, Marumi shares also intend to invest in food and beverage and new retail consumer industries. On October 29th, 2020, Marubi announced that the company intends to jointly invest with several partners to set up an industrial fund with a scale of 100 million yuan, which will mainly invest in domestic and foreign high-quality or high-growth enterprises in consumer industries related to food and beverage, condiments and new retail, so as to build an ecological circle of food industry. One of the limited partners is Shanghai’s "coming to Iraq".Marubi Co., Ltd. said that this investment direction has a certain correlation with the company’s main business, mainly functional foods related to beauty.

The domestic beauty cosmetics who are striding forward all the way, the "circle" is getting bigger and bigger, but it seems to be getting farther and farther away from what people expect.After the rapid rise of national cosmetics with capital, what will be the next step? After the "fan economy" and "face value economy", Chinese cosmetics still need to rely on high-quality differentiated items to gain a foothold in the market.

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