As of the close of trading on April 24, the share price of Shuiyang shares fell 4.42%. The night before, Shuiyang released its 2023 financial report and the first quarter of 2024 financial report, and the profit increase in 2023 will not increase income, and the revenue and net profit in the first quarter will both decline. When the beauty brand rolls up to science and technology skin care, the R&D expenses of S'YOUNG are decreasing, so how much is the competitiveness of S'YOUNG?
According to the financial report data, in 2023, the operating income of Shuiyang Co., Ltd. will be 4.493 billion yuan, a year-on-year decrease of 4.85%, and the net profit will increase by 135.2% year-on-year to 294 million yuan.
The substantial increase in net profit in 2023 has ended the situation of the decline in the revenue and net profit of Shuiyang shares, but the results of the first quarter of 2024 disclosed immediately afterwards have brought Shuiyang shares back to the dilemma of declining revenue and net profit. In the first quarter of 2024, S'YOUNG's revenue and net profit fell by 5.74% and 47.14% respectively. On April 24, the intraday share price of Shuiyang shares fell, falling by 7.89%, and as of the close of the day, the share price of Shuiyang shares fell by 4.42%.
Regarding the decline in net profit in the first quarter, the relevant person in charge of the secretary office of the board of directors of Shuiyang Co., Ltd. told the Beijing Business Daily reporter: "The decline in net profit in the first quarter is mainly due to the impact of hedging losses. According to the financial report data, Shuiyang shares deducted non-net profit in the first quarter increased by 44.67%.
Improving management efficiency and improving the organizational structure is one of the reasons why S'Young will achieve a substantial increase in net profit in 2023. "On the premise of focusing on the long-term and healthy development of the business, the company adheres to refined operations, continuously improves management efficiency, and continuously improves the construction of the organizational system, and the company's business situation is positive. Shuiyang shares said in the financial report.
In 2023, Shuiyang Co., Ltd. strengthened the control of cost efficiency, with sales expenses decreasing by 8.61% year-on-year to 1.858 billion yuan, and R&D expenses decreasing by 13.81% to 76.57 million yuan from 88.83 million yuan in 2022. "The main reason is to adjust the R&D organization and optimize the structure of R&D personnel. According to the financial report data, the number of R&D personnel in S'YOUNG will be 347 in 2022, a year-on-year decrease of 14.99% to 295 in 2023.
According to Jiang Han, a senior researcher at the Pangu Think Tank Research Institute, although reducing R&D expenses may help companies improve profitability and profit margins, for beauty companies, reducing R&D expenses may cause companies to lag behind competitors in product development and innovation, and even affect the company's long-term development. S'Young needs to find a balance between maintaining profitability and improving R&D capabilities.
Wu Daiqi, CEO of Shenzhen Siqisheng Company, said: "Many beauty products rely on concepts to attract consumers and achieve the goal of high premiums, but in fact, many of the effects are not achieved, or the efficacy is exaggerated. If you really invest in scientific and technological research and achieve efficacy, you will naturally have strong product competitiveness. ”
In an interview with a reporter from Beijing Business Daily, the relevant person in charge of the secretary office of the board of directors of Shuiyang Co., Ltd. said, "It is not that the company has reduced its R&D expenses, but in the past year, the company has made structural adjustments in R&D, including personnel structure changes to improve efficiency, and not simply reduce R&D expenses."
It is worth mentioning that in the first quarter report of Shuiyang shares, R&D expenses are still declining. decreased from $24.5967 million in the same period of 2022 to $18.07 million.
In the financial report, Shuiyang Co., Ltd. introduced itself as follows: "It is mainly engaged in the research and development, production and sales of cosmetics, and its product categories cover the fields of cosmetics such as film, water cream cream, makeup, personal care and cleaning. "It is worth noting that from the perspective of R&D investment, Shuiyang Co., Ltd., which has a development history of nearly 20 years, is opening up a gap with other beauty brands.
According to the financial report data of various enterprises, Proya's R&D expenses in 2023 will be 174 million yuan, a year-on-year increase of 35.59%, Bethany's R&D expenses in the first three quarters of 2023 will be 182 million yuan, a year-on-year increase of 43%, and Bloomage Biotech's R&D expenses in 2022 will be 255 million yuan, a year-on-year increase of 14.96%.
From the perspective of revenue proportion, the R&D expenses of Bethany, L'Oreal, and Bloomage Biotech account for basically more than 3%, while the R&D expenses of S'YOUNG account for only 1.7%.
Behind the rising R&D expenses of various enterprises in the industry is the status quo of the beauty industry moving towards the era of efficacy and technology.
L'Oréal China has publicly stated: "Beauty and technology are one. "L'Oréal is also moving from a beauty company to a beauty tech company. Fang Yuyou, co-founder and CEO of Proya, has also publicly stated that Proya is transforming from an operating gene enterprise to a technology-based enterprise. For example, Proya continues to increase R&D investment and set up R&D centers in Hangzhou, Zhejiang, Shanghai and other places. In terms of products, also based on continuous investment in research and development, brands have moved towards the era of effective skin care. For example, L'Oreal launched the anti-aging and anti-aging brand Helena based on Bosonine, Proya launched an anti-aging ruby based on hexapeptides, and Winona focuses on sensitive skin.
Looking at Shuiyang shares, some of the product efficacy of its brands such as "Yu Nifang", "Big Water Drop", "Little Confusion", "Yu" and "VAA" are still concentrated in the level of cleansing, moisturizing, hydrating and whitening.
Jiang Han said that consumers' demand for beauty products is becoming more diversified and personalized, and the requirements for product quality, efficacy, and safety are getting higher and higher. This has prompted beauty companies to continue to innovate and develop to meet the needs of consumers. With the continuous advancement of technology, the beauty industry is also gradually realizing the integration with technology, in order to compete for market share in the increasingly fierce competition. This requires enterprises to continuously increase investment in R&D, branding, channels, etc.
Shuiyang is also aware of this and is consciously increasing R&D investment. The relevant person in charge of S'YOUNG said: "The continuous investment in R&D expenses will be the main line of S'YOUNG in the future. ”
It is understood that in 2023, under the guidance of the scientific and technological strategy of "R&D empowerment brand", S'Young Co., Ltd. will build a large R&D system with the structure of "three bodies, two wings and one platform". At the same time, Shuiyang Co., Ltd. said in the financial report: "In the future, we will further increase investment in research and development, continue to deepen and improve the 'three-body and two-wing' large research and development system, make long-term in-depth investment and subdivision system construction in the three major systems of skin mechanism research system, new raw material research system and formula research and development system, and continue to build two wings in combination with external university research institutes and upstream and downstream supply chain partners." ”
Beijing Business Daily reporter | Guo Xiujuan Zhang Junhua
Edited by Topol
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