A few days ago, the China Securities Regulatory Commission (CSRC) issued the "Guidelines for the Supervision of Listed Companies No. 3 - Cash Dividends of Listed Companies (Revised in 2023)" (hereinafter referred to as the "Cash Dividend Guidelines") to further improve the normalized dividend mechanism of listed companies and improve the level of investor returns. The "Cash Dividend Guidelines" promote the increase of dividend levels, further optimize the method and rhythm of dividends, and also strengthen the guidance of reasonable dividends. The implementation of the "Cash Dividend Guidelines" will help promote listed companies to enhance investor returns, better guide companies to focus on their main business, and promote the stable and healthy development of the market.
Behind this, it is also conveying the recognition and affirmation of the investment value of high-dividend enterprises.
For example, Shangmei Co., Ltd. (02145), a leading beauty company listed in Hong Kong, has extremely considerable investment value brought by its high dividend payout and high growth - since its listing at the end of last year, Shangmei has paid its first dividend in fiscal year 2022, with a net profit of 140 million yuan and a cash dividend of 100 million yuan, with a payout ratio of 71.43%, far exceeding the median dividend payout ratio of A-shares and Hong Kong stocks. In the middle of 2023, the company's dividend payout will be further increased, with a net profit of 100 million yuan and a cash dividend of 80 million yuan, with a payout ratio of 80%.
High dividends, high growth, this is the time when the investment value is fully revealed
In terms of capital markets, the solid dividend return demonstrates the company's confidence in profits and future cash flows.
Assuming that the dividend will be paid according to the proportion of 80% of the net profit, according to CICC's expected net profit of more than 347 million yuan, the cash dividend of Shangmei will not be less than 278 million yuan, and the dividend yield of Shangmei is expected to exceed 3.4% according to the company's market value. Combined with the high growth of the company's performance, on the one hand, the dividend yield will be further increased (if the stock price does not increase significantly), and on the other hand, the appreciation of the investment is also worth looking forward to. Compared with its peers, Bethany has a dividend yield of 1.18%, Shuiyang shares have a dividend yield of 0.63%, and Proya has a dividend yield of 0.97%, which is obviously the highest dividend yield in the industry.
With the continuous improvement of dividend indicators and good profitability, Shangmei will repay shareholders with continuous and stable dividends in the future, and the advantages of defensive attributes will also effectively hedge risks for investors, with considerable long-term returns and great allocation value.
In the secondary market, performance is the best litmus test for listed companies. Combined with the recent performance, the GVM of the Hanshu brand of Shangmei Co., Ltd. exceeded 500 million in November, ranking first in the list of beauty brands on Douyin in November, with a year-on-year increase of 578.47% and a sales volume of 2.062 million pieces. The strong performance has also made Shangmei shares favored. Wind data shows that the consensus expected revenue of Shangmei in 2023 will exceed 3.6 billion yuan, and the net profit will exceed 300 million yuan, a year-on-year increase of about 110%.
CICC Research Report pointed out that at this stage, the Hanshu brand has performed well in the Douyin channel, and it has spilled over to other platforms to bring organic search, driving the growth of Tmall, JD.com and offline channels to accelerate. The bank believes that the upward trend of Hanshu, the main brand of Shangmei Co., Ltd., has been established, and the multi-brand matrix layout will boost the medium and long-term growth. At the same time, the bank also pointed out in the analysis that Shangmei shares have a large upside space compared with the current stock price, and continue to be optimistic about the investment value of Shangmei shares.
In fact, in addition to the dimensions of EPS, dividend yield and valuation premium, the return on investment can also be differentiated according to intrinsic value and growth value. Since the beginning of this year, the revenue and profit of Shangmei shares have shown a high growth rate, and the performance of the stock price is obviously much lower than the growth of intrinsic value, which means that there is enough room for its subsequent growth.
Combined with the consensus expectation data of major research institutes and wind, according to comparable companies, with PE as the valuation indicator, the average value of the A-share head peers is 56.58 times, and the Shanghai American shares listed in the Hong Kong stock market are in a period of rapid development, and the current 45 times PE (TTM) and 25 times PE (2023E) have a higher discount. In addition, according to the company's sales revenue, profitability, business development still has great growth potential, and is expected to become an industry benchmark to calculate that the share price of Shangmei shares should be around 34 Hong Kong dollars, so far there is still 57.41% room for growth, and its growth potential is not to be underestimated.
To sum up, industry insiders have judged that Shangmei shares, as a scarce Hong Kong listed domestic skin care leading enterprise, in the case of market fluctuations, still with excellent fundamentals, upward stock prices and continuous extension of value space, have transmitted a strong value signal to the market, and continue to gain the attention of investment banks, at this stage is undoubtedly the best time to lay out Shangmei shares.
The top line of profitability continues to push up, and the future increment is laid
The confidence of the high-dividend strategy comes from the three major capabilities accumulated by Shangmei over the years: multi-brand hematopoietic ability, continuous new channel ability, and continuous investment in independent scientific research ability.
At present, Shangmei Co., Ltd. takes the three major brands of Han Shu, Yiye and Red Elephant as the core position, and a number of new brands work together to form a competitive multi-brand matrix. The multi-brand strategy has brought outstanding anti-risk ability to the development of Shangmei shares, and the differentiated positioning of different brands has also allowed Shangmei shares to cover a wider price band and a wider range of consumer groups, making it possible for the performance to climb in multiple points.
While the core brand Han Shu continued to break out, the new growth point of Shangmei shares also ran out of growth "acceleration". In May 2022, the new brand Newpage was launched on one page, and achieved rapid growth and performance breakthroughs within one year, and sales in the first half of 2023 exceeded twice that of the whole year of 2022. These emerging performance growth curves are also helping Shangmei's performance to rise steadily and continue to push up the top line of corporate earnings.
Not only that, omni-channel innovation is expected to become the "key password" for its value extension. In the early years, Shangmei started as an offline CS channel, with tens of thousands of outlets covering the whole country, making the Hanshu brand a household name in the short term; then entered traditional e-commerce channels such as Tmall to further precipitate the brand mentality; and now sits firmly in the first place on Douyin and reaps the dividends of traffic...... The continuous optimization of the channel structure reflects the company's super learning ability and keen ability to capture the flow Xi, and its corresponding consumer stickiness will also be greatly consolidated, which will feed back the company's healthy growth.
What is even more commendable is that with the support of strong scientific research capabilities, Shangmei Co., Ltd. further cuts into the market segment with different categories of products, and in this way, broadens the growth boundary and lays a solid foundation for the company to pass through a longer cycle.
Looking back on the past, Shangmei Co., Ltd. has been forward-looking in independent research and development since the establishment of the company in 2003, and began to lay out basic research in 2016 when the industry was prevalent in OEM processing, and is a pioneer in basic research of domestic cosmetics. According to the semi-annual report, in the first half of 2023 alone, Shangmei Co., Ltd. has applied for 40 new patents and 7 newly authorized patents.
Overall, in the short term, Shangmei shares have proved the company's investment value with high dividend distribution, high-speed growth revenue, strong profitability and other performance highlights. In the long run, the rich brand matrix, the accelerated expansion of the channel map, and the empowerment of innovation and R&D will undoubtedly promote it to go further and further in the industry and achieve a higher level of performance.