Domestic beauty brands are on the rise, gradually occupying the market share of international cosmetics in China, which is expected to achieve a breakthrough from catching up to surpassing.

　　Recently, A-share cosmetics listed companies have successively disclosed the 2023 performance forecast. Under the background of consumption recovery, many companies, including Freda, Marubi, Shuiyang and Kesi, expect net profit to increase year-on-year.

　　The performance of subdivided tracks is beautiful

　　Marubi, a veteran domestic beauty company, released a performance forecast saying that the company expects to achieve a net profit of 300 million yuan to 330 million yuan in 2023, an increase of 72% to 89% year-on-year; The net profit after deduction was 220 million yuan to 250 million yuan, a year-on-year increase of 62% to 84%.

　　The company said that it is actively promoting the transformation of online channels. Among them, the content e-commerce of Marumi brand represented by Tik Tok Aauto Quicker increased by over 100%, and the second brand PL Love Fire increased by over 100%. In addition, the company firmly divides channels and products, implements the strategy of "big mind and single product", optimizes product structure, and reduces costs and improves efficiency.

　　The single product strategy and the promotion of online channels are the reasons why most domestic cosmetics listed companies achieved performance growth last year.

　　According to the data of Youth Intelligence, in 2023, the growth rate of platform cosmetics sales in Tik Tok was 47%, and that in Aauto Quicker was 69.7%. This feature is also reflected in the performance forecasts of many companies.

　　Shuiyang shares are expected to achieve a net profit of 280 million yuan to 320 million yuan in 2023, a year-on-year increase of 124% to 156%; The non-net profit deducted was 260 million yuan to 300 million yuan, up 169% to 210% year-on-year. The company owns its own brands: Effidan, Dashuidi and Royal Mud Workshop, and its agency brand business is also deeply bound with Johnson & Johnson.

　　Shuiyang Co., Ltd. said that during the reporting period, the multi-level brand matrix system of the company’s own brands was further improved, brand assets continued to precipitate, the agency brand business entered a benign track, the overall business and product structure were further optimized, and the proportion of high-margin brands continued to rise.

　　Freda is expected to achieve a net profit of 260 million yuan to 290 million yuan in 2023, an increase of 472% to 538% year-on-year; The non-net profit deducted was 116 million yuan to 146 million yuan, up 98% to 150% year-on-year.

　　After divesting the real estate development business, Freda has continuously empowered its core business development by relying on the strength of scientific research and development and the advantages of multi-brand omni-channel development. The company said that during the reporting period, the cosmetics business continued to build a brand matrix, broaden sales channels and achieve sustained and steady growth.

　　On the raw material side, Kesi, a leading sunscreen company, expects the net profit of returning to the mother in 2023 to be 720 million yuan to 760 million yuan, up 85.50% to 95.80% year-on-year.

　　During the reporting period, with the steady improvement of the market position of KES and the continuous growth of the market demand for sunscreen products, as well as the improvement of the company’s overall capacity utilization rate and the rapid release of new product capacity represented by new sunscreen agents, it helped the company to improve its main business income and gross profit margin. According to reports, in the future, the company will also invest in the construction of "10,000 tons of sunscreen products in Malaysia" to expand market demand in Asia-Pacific, Europe and other regions.

　　The medical and beauty sector also showed signs of recovery. Aimeike expects to achieve a net profit of 1.81 billion yuan to 1.9 billion yuan in 2023, a year-on-year increase of 43% to 50%; The non-net profit was 1.782 billion yuan to 1.872 billion yuan, a year-on-year increase of 49% to 56%.

　　Aimeike said that the company actively pays attention to market changes, provides high-quality services for downstream medical and beauty institutions at the academic and operational ends, better meets the needs of beauty seekers and enhances the depth of cooperation with customers. At the same time, through the distribution model, we will further expand the number of institutions covered by the company’s products and enhance the breadth of cooperation with customers. The company continues to increase investment in research and development expenses and do a good job in the research and development of pipeline products.

　　According to the performance forecast released by Jinbo Bio, the company’s net profit for returning to its mother in 2023 is expected to be 280 million yuan to 300 million yuan, up 156.47% year-on-year to 174.79%. The main reason for the increase in performance is that the company continues to increase R&D investment, actively develops new products and product upgrades, and strives to increase brand promotion and market development.

　　Constructing core competitiveness with high quality

　　Some people in the industry told reporters that scientific research is still the core issue. With the upgrading of consumer demand and the trend of rational consumption, cosmetics brands began to "roll" research and development, "roll" technology, "roll" ingredients and "roll" raw materials.

　　High-quality domestic brands sold well last year, mainly because they gradually gained the trust and recognition of consumers in terms of quality and safety, and their market competitiveness was constantly enhanced. At the same time, consumers’ rational consumption awareness was enhanced, and domestic brands with high cost performance and good use experience became the preferred choice.

　　In addition, the domestic beauty care brand has also broken the traditional operation mode and made bold innovations and attempts in marketing, attracting more young consumers. With the continuous improvement of the product strength and research and development strength of domestic beauty brands, its rising trend is expected to continue.

　　Caixin Securities Research Report pointed out that in the long run, with the gradual recovery of consumption, domestic brands continue to consolidate their brand potential and adjust their marketing strategies in time. Domestic brands with solid R&D functions, strong marketing capabilities and multi-brand matrices are expected to rise further.

　　It is worth noting that the market space for domestic beauty products to expand is still increasing. The report "Insight into the Development and Consumption of Cosmetics Market in China in 2023" shows that the market size of China’s cosmetics industry is about 516.9 billion yuan in 2023, up 6.4% year-on-year, and it is expected to increase to 579.1 billion yuan in 2025.

　　Recently, the General Office of the State Council issued the Opinions on Developing the Silver-haired Economy and Improving the Well-being of the Elderly. This is the first time that a special policy with the theme of silver-haired economy has been introduced at the national level, and it is also the first time to encourage the development of anti-aging products at the national level, which mentions promoting the research and development of cosmetic raw materials, formulation and production process design and development.

In winter, many car owners will be concerned about whether turning on the warm air will increase the fuel consumption of the car. In fact, if used correctly, heating the car in winter won’t cost oil.

First of all, it is necessary to understand that the cold air and warm air in the car are produced by two different systems. The cold air is cooled by the compressor, while the warm air is generated by the thermal cycle of the car itself. Therefore, when we turn on the warm air, we don’t need the compressor to work, so it won’t increase the fuel consumption.

However, some car owners may find that turning on the warm air when starting the car will lead to excessive engine load, thus increasing fuel consumption. This is because it takes some time for the engine oil to fully lubricate all parts of the engine when the car is just started. If the warm air is turned on at this time, the internal lubrication of the engine will be insufficient, and the friction resistance will increase, which will lead to excessive engine load and increase fuel consumption.

Therefore, the correct way is to wait for 3 to 5 minutes after the car starts, and then turn on the warm air after the engine water temperature rises. This can ensure that the engine is fully lubricated, reduce friction resistance, and thus reduce fuel consumption.

In short, as long as it is used correctly, turning on warm air in winter will not increase the fuel consumption of the car. Car owners can safely use warm air to keep the cab warm and comfortable.

　　The default situation of credit bonds continues unabated. According to Wind statistics, as of June 30, the default scale of credit bonds this year has reached 98.573 billion yuan, far exceeding the level of the same period last year. Among them, the overdue principal of bonds is 91.338 billion yuan and the overdue interest is 7.235 billion yuan.

　　Insiders interviewed by reporters said that the deterioration of default data in the first half of this year was mainly due to the risk exposure of several major entities such as HNA Group and Huaxia Happiness, which can be said to be the result of the accumulation of default risks in the previous period. Looking forward to the second half of the year, the default situation may continue, and the credit differentiation will further intensify.

　　At the same time, with the gradual normalization of bond market default, the redemption rate of bonds after default has also decreased year by year. Although private enterprises are still the main force of default, the scale of default of state-owned enterprises has increased rapidly. According to statistics, in the first half of 2021, the balance of default bonds of local state-owned enterprises totaled 36.411 billion yuan, accounting for 79% of the default amount of local state-owned enterprises’ bonds last year, which continued to impact the "belief in state-owned enterprises". Some analysts said that there have been two major trends in the default of credit bonds. First, state-owned enterprises with weak qualifications will become a breakthrough to break the just exchange; Second, the tail real estate company will accelerate the market clearing.

　　The scale of credit debt default has expanded.

　　Since the beginning of the year, credit bond defaults have occurred frequently. According to statistics, there were 13 new issuers who defaulted for the first time in the first half of the year, including 7 issuers in the first quarter and 6 issuers in the second quarter. However, this figure is down from 19 in the first half of 2020.

　　According to the analysis of CICC’s collection team, in contrast, the cumulative number of issuers who defaulted in the first half of this year and in the two quarters showed a downward trend year-on-year. The decrease in the number of issuers who defaulted was related to the greater efforts of supervision and local governments to maintain stability, and repeatedly stated that they had zero tolerance for malicious "evasion of debts", actively guaranteed bond payment and restored market confidence.

　　Although the number of new defaulting subjects has decreased, the scale of default has not decreased. According to the reporter’s statistics, as of June 30th, the number of defaults on credit bonds reached 120 this year, with a scale of 98.573 billion yuan, compared with 94 and 72.995 billion yuan in the same period last year. Among them, the overdue principal of bonds this year is 91.338 billion yuan, and the overdue interest is 7.235 billion yuan.

　　"This is mainly due to the risk exposure of several major defaulting entities, such as HNA Group and Huaxia Happiness, which is the result of the accumulation of risks in the early stage." A director of fixed income of a fund company told reporters. For example, in the first half of the year, a number of issuers of Hainan Airlines were ruled by the court to accept bankruptcy and reorganization applications, and all the surviving bonds were deemed to be due to breach of contract, which in turn pushed up the number and amount of defaulted bonds in the first half of the year.

　　Ming Ming, deputy director of CITIC Securities Research Institute, also told CBN: "The scale of default under the conventional caliber includes the subjects that have defaulted over the years. If their surviving bonds expire in the first half of 2021, they will also be included in this year’s default, resulting in large data. In particular, the defaults in the first half of this year included large bond entities such as Kangmei, Huaxia Happiness, Huaxin and Taihe, which led to a higher amount than the same period last year. "

　　Mingming also said that considering the risk of default in the first half of this year, it is usually compared with the first default of enterprises. In the first half of this year, the new default was 8.65 billion yuan, which was lower than 13.38 billion yuan in the same period last year.

　　Real estate default accounts for a large proportion

　　From the perspective of industry distribution, in the first half of this year, bond defaults were mainly concentrated in comprehensive, real estate, air transport, construction and engineering industries. Among them, the default scale of the real estate industry was 19.192 billion yuan, ranking first. Some insiders predict that the market-oriented clearing will be accelerated in the future under the background that the real estate regulation is not relaxed.

　　CICC’s collection team believes that this is because real estate development enterprises have the problems of large cash inflow and outflow, frequent policy regulation and tight refinancing as a whole, and naturally have the characteristics of high credit risk.

　　In fact, since 2018, with the marginal tightening of real estate financing and the arrival of the peak of real estate corporate bonds maturity, the default of real estate bonds has gradually been exposed. Especially since May last year, local regulatory policies have been tightened again, and the continuous financing shortage has stretched the capital chain of some real estate industries.

　　After the default of three real estate enterprises in the first half of this year, the institutions intensified their risk investigation on the real estate sector, and their attitudes tended to be cautious. "Some small and medium-sized housing enterprises have relatively high debt ratios, and the financing channels faced by the industry have narrowed, so they are prone to default." Macro analyst Zhou Maohua told reporters.

　　It is also worth mentioning that on July 12, Sichuan 100 billion-level housing enterprise Blu-ray Development Co., Ltd. also defaulted. The announcement shows that as of the end of the due date, the issuer failed to raise the full repayment funds as agreed, and "19 Blu-ray MTN001" failed to repay the principal and interest in full on schedule, which constituted a material breach of contract.

　　It is reported that the issuance scale of "19 Blu-ray MTN001" is 900 million yuan, with a term of 2 years. The interest rate of the bonds in this interest period is 7.5%, and the amount of principal and interest payable is 967.5 million yuan. The redemption date is July 11, 2021 (the actual redemption date is July 12, 2021).

　　Looking forward to the future credit bond market, many people in the industry expressed optimism. The aforementioned fixed income director of the fund company told reporters that it is expected that the credit default situation will continue in the second half of the year. After all, the credit financing environment has not been relaxed, and the policy has been tightening the review of urban investment bonds and real estate bonds. The performance of the credit market will be more differentiated, and the sinking of qualifications will be more cautious.

　　Zhou Maohua said that from the trend, domestic defaults will not rise sharply, mainly because the overall domestic monetary and credit environment remains reasonable and moderate, and accurately supports short-term weaknesses. At the same time, the economy and domestic demand are recovering steadily, the overall profit of enterprises tends to improve, and the market financing function is sound.

　　"We should treat the domestic bond market default rationally. A certain amount of bond default will help to find the market price, force enterprises to operate steadily, reasonably debt, and continuously improve operating efficiency; It also helps the market mechanism to play its role and promote the efficiency of market resource allocation. " Zhou Maohua also mentioned.

　　Decreasing the redemption rate of default bonds

　　As the default of credit bonds tends to be normalized, there is also a phenomenon that the payment ratio of default bonds is also decreasing.

　　According to the statistics of Zhongtai Securities, the proportion of the accumulated principal paid by default bonds to the accumulated balance of default bonds has dropped from 79.37% at the end of 2014 to 6.87% at the end of the first half of 2021; The proportion of fully paid bonds to default bonds decreased from 20% to 7.16%. This means that once the bond defaults, investors will face greater losses.

　　Generally speaking, after the bond defaults, enterprises mainly have five ways to deal with the default, namely litigation arbitration, bankruptcy litigation, self-financing repayment, debt restructuring and collateral disposal/guarantor compensation. In general, self-raised funds, debt restructuring and bankruptcy litigation are three common disposal methods, among which debt restructuring and self-raised funds have shorter redemption period and higher recovery rate than bankruptcy restructuring.

　　In addition, there are differences in default payment of different types of bonds. For example, from the perspective of the nature of enterprises, Zhongtai Securities analyzed that by the end of June 2021, 40 of the 135 private enterprises that had defaulted on bonds had partially or fully paid the defaulted bonds, with a redemption probability of 29.63%; However, local state-owned enterprises and central state-owned enterprises have higher redemption probabilities, which are 38.46% and 36.36% respectively.

　　However, in recent years, with the substantial increase in the default scale of local state-owned enterprises and the successive default of bonds issued by some central enterprise groups, "the redemption ratio of local state-owned enterprises and central enterprises according to the amount of redemption and the number of fully redeemed bonds has been lower than that of private enterprises." Zhou Yue, chief analyst of Zhongtai Securities Solid Revenue, said.

　　Specifically, in the first half of 2021, the cumulative redemption amount of local state-owned enterprises accounted for 5.03% of the bond default scale, compared with 13.95% at the end of 2018; The proportion of central enterprises is 4.20%, and it was 17.26% at the end of 2018. Zhou Yue further believes that at present, there are two tendentious problems in the default of credit bonds. First, weak state-owned enterprises will become a breakthrough to break the just-redeemed; Second, the tail real estate company will accelerate the market clearing.