More than 30 beauty-related companies have already hit IPOs this year. Data from the Prospective Industry Research Institute shows that by 2022, the market size of China's beauty industry will reach 500 billion yuan. If you add personal care categories, the market size will reach the trillion level.
Pan Qiusheng, chairman and CEO of Shanghai Jahwa, said that as China's GDP continues to grow, the beauty industry's role in pulling consumption will continue to grow, but China's local beauty industry is still facing the problem of low penetration.
"Today, the penetration rate of China's overall beauty industry is far lower than that of the entire global market, especially in some countries such as Europe, the United States, Japan and South Korea. China's daily cosmetics industry must continue to innovate in order to promote the development of the industry. ”
Pan Qiusheng said.
China is the second largest cosmetics market in the world, with 5398 cosmetics companies, more than all cosmetics companies in the world except China combined, but it also presents a problem of large but not strong.
China's raw material manufacturers are deeply engaged in the field of daily chemicals, and the financial data performance is better. Foreign-funded leading raw materials manufacturers have a long history, covering many fields of raw materials including daily chemicals, plastics, oil and gas, pharmaceuticals, coatings and paints, etc. China's raw materials manufacturers are deeply rooted in the field of daily chemicals, mostly concentrated in flavors and fragrances, surfactants, hyaluronic acid and sunscreen and other personal protective raw materials, benefiting from the rapid development of the Chinese market, domestic companies perform better.
Leading suppliers of core raw materials are expected to follow the growth of the industry. Moisturizing and sunscreen are the basic needs of consumer skin care, and the downstream demand is stable.
Hyaluronic acid molecules have excellent water-locking & hydration performance, superior to other moisturizers, Bloomage has a production capacity of 2 kDa-4,000 kDa molecular weight raw materials, and large, medium, and small molecules of hyaluronic acid with enhanced moisturizing characteristics;
Sunscreen effectively prevents tanning and aging, and Covestro sunscreen covers the full band of UVA and UVB, with significant sunscreen effect.
Under the background of the steady growth of the cosmetics industry and the increased consumer emphasis on raw materials & efficacy, the global sales share of cosmetic grade hyaluronic acid is nearly 50%, and the global sales share of Bloomage Biologics and sunscreens is nearly 30%.
According to incomplete statistics, there are currently more than 3,000 brands in China engaged in "cosmetics, makeup, beauty, beauty e-commerce" related business. Among them, Guangdong Province has the largest number of related brands, followed by Shanghai and Beijing.
From the perspective of the time of establishment, 2014-2018 is the peak period for the establishment of cosmetics-related brand affiliates. Among them, more than 500 were established in 2017, which is the most intensive year for the establishment of brand affiliates. In addition, there are more than 30 cosmetics brand affiliates established in 2020.
Bloomage Biologics: Taking hyaluronic acid raw materials as an advantage, the layout of the whole industry chain improves the certainty of raw material growth
With hyaluronic acid raw materials to enter the field of cosmetic raw materials. With the biological fermentation technology and unique enzyme cutting technology with a doubling of the same industry fermentation rate of 12-14g/L as the core advantage, Bloomage Bio has the advantage of low-cost mass production of small, medium and large molecule hyaluronic acid raw materials, and is the world's largest supplier of hyaluronic acid raw materials, and the data in 2018 shows that its raw material sales account for 44% of global hyaluronic acid sales (including Fosite), and it is expected that cosmetic grade hyaluronic acid raw materials will account for 43% of global cosmetic raw material sales.
Good water-locking properties make hyaluronic acid a high-quality cosmetic hydrating ingredient. Compared with other humectants, hyaluronic acid has an intelligent regulatory effect, with the highest moisture absorption at low relative humidity (33%), absorbing 1.5 to 6 times the moisture absorption of other humectants, while at high relative humidity (75%) the lowest moisture absorption, the absorption of moisture is only 1/2 to 5/6 of other substances.
This property allows hyaluronic acid to adapt and meet the skin's moisturizing needs in different seasons and different moderate environments.
At present, the types of cosmetics with hyaluronic acid have been extended from the initial creams, lotions, lotions, essence capsules, and film patches to bath liquids, powders, lipsticks, shampoos and hair care agents, mousse, etc.
The company developed hyaluronic acid secondary ejection solution to the downstream layout to enhance the demand for cosmetic raw materials. The company relies on the advantages of raw materials to enter the skin care market downstream, takes the lead in applying the secondary throwing method to the cosmetics field, develops hyaluronic acid secondary throwing solution products, and effectively realizes the elastic water-locking film of the surface layer of the macromolecular skin, the water-locking of the sub-layer of the epidermis of the small molecule skin, and the deep water-locking + repair effect of the mini-molecular dermis layer.
On the one hand, to create a new business unit to achieve new growth points, on the other hand, to strengthen consumers and cosmetics brand owners on the application of hyaluronic acid raw materials in cosmetics, enhance the new demand for cosmetic raw materials, and further strengthen the certainty that raw materials follow the growth of the cosmetics industry.
Focusing on hyaluronic acid raw materials, we will improve other lines of business downstream. In addition to cosmetic-grade raw materials, the company also has injection-grade, eye drop-grade raw materials and food-grade raw materials hyaluronic acid, which further extends the layout of ophthalmic products, orthopedic products and medical aesthetic products downstream to enhance the demand for raw materials.
At present, the National Food Safety Risk Assessment Center's public opinion solicitation on new food raw material hyaluronic acid has ended on October 3, and the liberalization of food-grade hyaluronic acid access may be approaching, on the one hand, it will promote the market demand for Bloomage's food-grade raw materials, on the other hand, it will also promote the company's downstream layout into the functional food field and promote the company's performance growth.
The growth of the downstream sector will further enhance the certainty of the development of the company's raw material business, and the growth of Bloomage Biotech is expected to be:
Covestro: The world's largest sunscreen producer, following the industry's deterministic growth
Leading sunscreen producer & synthetic fragrance producer.
1) Sunscreen: The sunscreen products provided by the company have covered all the major chemical sunscreen categories on the market, covering the full band of UVA and UVB, while mass production of some raw materials of sunscreen products, is expected to be integrated like the upstream, the current sunscreen services DSM, Biersdorf, Procter & Gamble, L'Oréal, Merck, Johnson & Johnson and other large multinational cosmetics and specialty chemical companies, with a global market share of 27.88% of sunscreen products;
2) Earlier into the production of methoxybenzaldehyde, Suzuranaldehyde, p-methylacetophenone, 2-naphthaleneacetophenone and other synthetic fragrance products, in the Suzuranaldehyde is one of the world's three large-scale production manufacturers. Revenue/net profit increased 13%/77% year-over-year in 2019.
The high market share of the sunscreen market enhances the discourse power of Coase shares and strengthens the level of profitability. Covestro's high market share in the sunscreen market increases its bargaining power, passing on the impact of rising raw material prices and increasing gross margins by increasing product prices.
Raw material prices rose in 2018, with the company raising the price of some products twice in 2018 and 2019, while the decline in raw material prices in 2019 further strengthened the company's gross margin level.
At the same time, the high market share combined with the company's timely and effective measures made the 25% tariff imposed by the United States in May 2019 not have a significant adverse impact on the company, highlighting the company's strong anti-risk ability and relative certainty of performance.
DSM is covestro's largest customer, accounting for 40.5% of revenue. The company's main customers are large multinational specialty chemical companies, cosmetic companies and fragrance companies.
These include DSM, Dezhixin, Ashland, Givaudan, Byersdorf, L'Oréal, Johnson & Johnson, Procter & Gamble, Firmenich, International Flavors & Fragrances, Colgate and more.
Among them, the revenue from DSM reached 446 million yuan, accounting for 40.52% of the total revenue, accounting for 55.15% of the active ingredients and raw materials of cosmetics.
Covestro will continue to strengthen the raw material layout in the future and is expected to enter the ODM field. The company will continue to strengthen the research and expansion of the field of cosmetic active ingredients, focus on new sunscreens, high-performance whitening agents, and launch more flavor and fragrance products, further consolidating its leading position in the segmented raw material market.
In addition, with the further development of the raw material business, the company is expected to strengthen formula research, not to rule out the integration of downstream under the ripe conditions in the future, to further open the medium and long-term ceiling, and to enjoy the high-speed growth dividend of the industry stably.
The rapid development of the cosmetics industry, 1) the tightening of supervision to clear out non-compliant brands, foundries and raw material manufacturers, optimize the market environment, 2) C2M trend & DTC model of the development of beauty platforms to further strengthen product demand, the upstream sector followed the steady growth of the industry.
FOUNDRY section: the competition pattern is relatively scattered, standardized production and has the strength to continuously expand the customer matrix of the leading foundry is expected to stand out in the current regulatory and competitive environment, continue to expand large brand customers and cutting-edge brands, enhance market share, stand above the industry growth. Optimistic about the development of Northbell.
Raw material section: leading suppliers with high market share in the subdivision will steadily follow the growth of the industry, and the expansion of the scale will be conducive to further sharing R&D expenses and costs, improving the level of profitability, recommending Bloomage Biologics, and paying attention to Covestro shares.
Zhang Wanping, executive dean of the International Cosmetics College of Shanghai University of Technology, believes that the future development direction of beauty products is nationalization, and the nationalization of cosmetic raw materials is also an inevitable development trend in the future. For the cosmetics industry, in the process of realizing nationalization, we need to achieve technological innovation from three aspects: raw materials, formulas and evaluations.
"In the field of cosmetic raw materials, natural extraction, biological fermentation is a relatively hot word in the industry, but under the constraints of the new regulations, natural extraction, biological fermentation there is a problem that the structure is not clear, the composition is not clear, and the effective concentration is not clear, we cannot deny the application and value of natural raw materials in cosmetics, but how to break through the concept and achieve efficacy is a point that the entire industry needs to do in the process of realizing nationalization."
Zhang Wanping said.
According to the technical guidelines for the safety assessment of cosmetics, the disclosure of data by raw material suppliers will be the demand for future national regulations.
"In the future, raw material enterprises that are relatively large and can give a very complete data can be more competitive in the market." After the new regulations are implemented, it will have a greater impetus on the head raw material manufacturers. ”
Jiang Ligang, chief R&D officer of the Polaia R&D Innovation Center, said.
Note: The content of this article is mainly excerpted from Industrial Securities, Retail Capital Theory Finishing Push