中国家庭个人护理：未来很美好

1、Deutsche Deutsche ResearchAsiaEurope GlobalNorth America Consumer StaplesHousehold Personal CareIndustryChinaDate2 April2019Industry UpdateThe Future is Beauty-FullCan China keep growing? Yes it can!Oer the last to eas, organic top-line gwth or may of the orlds top globalbeautycompanieshasaccelerate

2、dstrongly1,propellinganumberofstocks tards nw all-time highs, including Este Laude, LOral, VMH, and Andbehindthisgrowthhasbeenasingle,commondriver:demandfromconsumers,bothathomeandwhiletravelingabroad.thequestionspersist: Can such growth be lapped, and for how long can recent elevated momentum bemai

3、ntained?How sustainable is recent growth in China?As discussed in this report, our view is that the runway for elevated beauty gwth in China remains long (especially or prestige/premium Demographics, consumer preferences, and per-capita spending habits are orable,andtechnology(i.e.,e-commerce/m-comm

4、erce)shouldacilitate market development. Of course, such optimism must be balanced (tempered?) against the reality of tough comps, slowing economic growth, mounting concerns, and rising oversight on Chinese consumers who buy goods oshore in order to sell them domestically (daigou)not to mention (as

5、a further potential hurdle to global players) rising local competition and made in China” becoming a source of pride for Chinese brands. As a result, while we do expect some year-on-year slowing in China over the next 12-18 months, we believe solid double-digit growth prospects remain intact for mos

6、t major players (again, especially those competing for high-enddemand).What fuels our structural optimism? Survey says.Based on a proprietary survey of 700 Chinese beauty consumers over the course of January/February, we nd little evidence of a deceleration in beauty spending (mirroring our coverage

7、 companies comments). In general, consumers are planning to spend more (over 50% of both skin care and makeup consumers say they plan to increase their beauty spending going forward, vs. less than 10% saying they plan to decreasewith 75+% of consumers under-34 saying they plan to spend more), buying

8、 an increasing number and broader of products (with makeup rising in popularity alongside skin care, and Beiesdorf, Este Laude, LOral and P&G Beauty reported +6.6% organic gwth, on erage, or calendar 2017 and 2018a clear step-up from +3.3% for calendar 2014 through2016. HYPERLINK mailto:eva.quiroga-

9、thiele Eva Quiroga-ThieleResearch Analyst+44-20-754-51886 HYPERLINK mailto:stephen.powers Steve Powers Research Analyst+212-250-5480 HYPERLINK mailto:faiza.alwy Faiza Alwy Research +1-212-250-7611 HYPERLINK mailto:louise.li Louise LiResearch Associate+852-2203 6152 HYPERLINK mailto:anne.ling Anne Li

10、ng Research +852-2203 6177 HYPERLINK mailto:francesca.dipasquantonio Francesca DiPasquantonio Research Analyst+44-20-754-56490ChinaChinaDeutsche Bank AG/Londonofthisreport.InvestorsshouldDistributed on: 02/04/2019 06:07:07 GMTDeutsche Bank does and seeks to do business with companies covered in its

11、research reports. Thus, investors should be awarethatthermmayhaveaconictofinterestthatcouldaecttheobjectivityDistributedofthisreport.InvestorsshouldDistributed on: 02/04/2019 06:07:07 GMTthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.DISCLOSURESANDCERTIFICATIONS ARE LOCATED IN APPENDIX

12、 1. MCI (P) 091/04/2018. THE CONTENT MAY BE DISTRIBUTED IN THE PEOPLES REPUBLIC OF CHINA (THE PRC) (EXCEPT IN COMPLIANCE WITH THE APPLICABLE LAWS AND REGULATIONS PRC), EXCLUDING SPECIAL ADMINISTRATIVE REGIONS OF HONG KONG ANDMACAU.7T2se3r0Ot6kwoPayounger consumers using, on average, six dierent bran

13、ds in each product subcategory),generallybuyingmoreexpensiveproducts(75%ofmassmarket consumers express an intent to trade up, two-thirds of them to global luxury brands),travelingmore(67%ofrespondentsexpecttotravelabroadthisyear), andshoppingmorewhilethey(95%ofrespondentsplantobuyskincare/ makeup pr

14、oducts on their travels40% in duty free channels only, 10% destinationend-marketsonly,andanother40%spreadacrossdutyfreeandmarketoutlets).Combinedwithsteadilyrisinghouseholdincomes(estimates areforanine-foldincreaseintheChinesemiddleclassbetween2015andwithfemalespendingpowerexpectedtoincreaseexponent

15、ially)andever-easier accesstopreviouslyhard-to-findbeautyproductsviae-commerce(e.g.,Tmall), these trends speak to years of structural growth aheadnoting that consumers in markets like the US, UK, Germany, France, Korea, and Japan still spend 7x percapitamoreonbeautyproductsthandotheirpeersinChina.Wh

16、o is best positioned?Figure 1: Companies featuredNameTickerRatingLast PriceEstee LauderELBuyFigure 1: Companies featuredNameTickerRatingLast PriceEstee LauderELBuy$164.77LOrealOR-FRHold 240.40LVMHMC-FRHold 333.25Procter & GamblePGHold$103.64BeiersdorfBEI-DEHold 93.64UnileverULVR-GBBuy43.55CotyCOTYHo

17、ld$11.28HenkelHEN3-DEHold 90.60Este Lauder $176 PT): As a pure-play prestige global beauty company,wearebullishonELsprospectsandexpecttoseetop-linebottom-lineupsidedrivenbycontinuedgrowthinChina,aninectionin theUS,andwhitespaceopportunitiesinotheremergingmarkets.Source: FactSet, Deutsche Bank Resear

18、chLOl (Hold, 0 : Among Euopean HPC companies, LOral is bestpositionedtobenetfromChinesegrowth,giventhesheerbreadth andqualityofitsbrandportfolio,althoughthisisreectedinvaluation.Source: FactSet, Deutsche Bank Research(Hold,310PT):WhilePerfumes&Cosmeticsconsistsofan impressiverangeofluxurybrands,thes

19、egmentisthesmallestofvedivisions.Whilemomentumintheotherpartsofthebusinessremains equallystrong,weseethisasreectedinvaluation.P&G (Hold, $99 PT): China is P&Gs second-largest market overall, but we estimate China beauty only contributes 3-4% of group sales. While continuedstronggrowthwillhelp,onthem

20、argin,helpaccelerategroup organicgrowth(adriverofthestock),weseethisaspricedin.Beiersdorf(Hold,90PT):Accountingforamere3%ofdivisionalsales, China is a small market for Beiersdorf and one of mixed fortunes witha solid skin care and a struggling hair care business the latter has been put underUnilever

21、 53 PT): Business is more weighted to hair care and there has been a growing eort to strengthen the skin care franchise. China is a relatively small part of Unilevers Beauty & Personal Care division and is not yet central to the investment case.Coty (Hold, $11 PT): China represents only 3% of sales

22、(not a primary driverofperformance),butconstitutesatheoreticalopportunity.Henkel(Hold,100PT):At7%ofdivisionalsales,Chinaisagrowingpart of Henkels Beauty & Personal Care division; accounting for a mere 1% of group sales, it is too small to oset an otherwise struggling HPC and slowing adhesivesbusines

23、s. Of Contents HYPERLINK l _bookmark0 China beauty in six charts HYPERLINK l _bookmark0 4 HYPERLINK l _bookmark1 Can China keep growing? HYPERLINK l _bookmark1 5 HYPERLINK l _bookmark2 Summary HYPERLINK l _bookmark2 5 HYPERLINK l _bookmark3 A contributor to companies growth HYPERLINK l _bookmark3 5

24、HYPERLINK l _bookmark4 How sustainable is the growth in China? HYPERLINK l _bookmark4 6 HYPERLINK l _bookmark5 Who will be the winners? HYPERLINK l _bookmark5 7 HYPERLINK l _bookmark6 Near-term: beauty-full HYPERLINK l _bookmark6 11 HYPERLINK l _bookmark7 Summary HYPERLINK l _bookmark7 11 HYPERLINK

25、l _bookmark8 Consumers are planning to spend more on beauty HYPERLINK l _bookmark8 11 HYPERLINK l _bookmark9 Premiumization is HYPERLINK l _bookmark9 12 HYPERLINK l _bookmark10 Consumers are buying more products HYPERLINK l _bookmark10 15 HYPERLINK l _bookmark11 Consumers are traveling and shopping

26、(more) HYPERLINK l _bookmark11 15 HYPERLINK l _bookmark12 Beauty is a resilient category HYPERLINK l _bookmark12 17 HYPERLINK l _bookmark13 Long-term: more to come HYPERLINK l _bookmark13 19 HYPERLINK l _bookmark14 Summary HYPERLINK l _bookmark14 19 HYPERLINK l _bookmark15 What will drive underlying

27、 market growth? HYPERLINK l _bookmark15 19 HYPERLINK l _bookmark16 What will drive companies relative outperformance? HYPERLINK l _bookmark16 22 HYPERLINK l _bookmark17 How much of a worry are local competitors? HYPERLINK l _bookmark17 24 HYPERLINK l _bookmark18 Companies HYPERLINK l _bookmark18 26

28、HYPERLINK l _bookmark19 Beiersdorf Consumer in China: 4% of sales HYPERLINK l _bookmark19 26 HYPERLINK l _bookmark20 Henkel Beauty & Personal Care in China: 7% of sales HYPERLINK l _bookmark20 28 HYPERLINK l _bookmark21 LOral in China: 10% of sales HYPERLINK l _bookmark21 29 HYPERLINK l _bookmark22

29、Perfumes & Cosmetics in China: 10% of sales HYPERLINK l _bookmark22 31 HYPERLINK l _bookmark23 Unilever Beauty & Personal Care in China: 5% of sales HYPERLINK l _bookmark23 33 HYPERLINK l _bookmark24 Este Lauder in China (10% of sales) HYPERLINK l _bookmark24 34 HYPERLINK l _bookmark25 P&G Beauty in

30、 China (18% of sales) HYPERLINK l _bookmark25 39 HYPERLINK l _bookmark26 in China: 3% of Sales) HYPERLINK l _bookmark26 42 HYPERLINK l _bookmark27 Nu Skin in China: 40% of sales HYPERLINK l _bookmark27 43 HYPERLINK l _bookmark28 LOccitane in China (11% of sales) HYPERLINK l _bookmark28 44 HYPERLINK

31、l _bookmark29 Shanghai Jahwa in China (80% of sales) HYPERLINK l _bookmark29 46 HYPERLINK l _bookmark30 Appendix HYPERLINK l _bookmark30 48 HYPERLINK l _bookmark31 Skin care HYPERLINK l _bookmark31 48 HYPERLINK l _bookmark32 Make-up HYPERLINK l _bookmark32 48China beauty in sixchartsFigFigure 2: Asi

32、a/ luxury have been the two key drivers behind the sharp increase in beauty LFL growthFigure 3: The Chinese beauty market has increased six- fold since 2002, moving from #7 to #2 world-wide27.5%25.0%22.5%LFL growth (%)20.0%LFL growth (%)17.5%15.0%12.5%10.0%7.5%5.0%La prairie (33%)EL Asia (47%)LO Asi

33、a (68%)LO Luxe (67%)BD AAA (47%)LVMH Perfumes & CosmeticsEste Lauder60,0000150,000Market size ($ billion)Global market ranking2Market size ($ billion)Global market ranking40,000330,0004520,000610,00070% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110%Contribution to sales (%)082002 2003 2004 2005 2006

34、2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017NotNote:hesizeofthebubblesillustatesthecontributiontogowth.Note:Lightbubbles=companies Asiacontribution;darkbubbles=companiesluxurycontribution.Souce:DB,EuomonitorSource: DB, EuromonitorFigure 4: Although Chinas beauty per-cap consumption has bee

35、n increasing, it is still well below other marketsFigureFigure 4: Although Chinas beauty per-cap consumption has been increasing, it is still well below other marketsFigure5:Themajorityofconsumersplantoincrease spending on both skin care andmake-upBeautty consumption per capita ($)Beautty consumptio

36、n per capita ($)0USJapanKoreaJapanKoreaFranceUKGermanySpainItalyBrazilArgentinaPolandThailandMexicoChinaRussiaMalaysiaIndiaIndonesiaGDP per capita ($)100%Skin careSpendmoreSpendsameMake-up Spend lessSource: DB, EuromonitorSource: dbDIG Primary ResearchSource: DB, EuromonitorSource: dbDIG Primary Res

37、earchFigure 6: Premiumisation has been a Figure 6: Premiumisation has been a driver of the strongbeautygrowthinChinaandremainsatoppriority forconsumersFigure 7: With two-thirds of consumers planning to travel abroad, duty-free remains an important growth driver in beauty7.0100%PurchasePurchaseintent

38、ion(0=low,10=high)Skin care productsMakeupPerfumeSource: dbDIG Primary ResearchSource: dbDIG Primary ResearchBrandownership(%)Yes, dutyfreeonlyYes, incountryonlyYes,indutyfreeandcountryNoSource: dbDIG Primary ResearchSource: dbDIG Primary ResearchCan China growing?SummaryOver the last two years, org

39、anic top-line growth for many of the worlds global beauty companies has accelerated strongly, propelling a number of tards nw all-time highs, including Este Laude, LOral, VMH, and Behind this growth has been a single, common driver: demand from consumers, both at home and while traveling abroad.Whil

40、e, so far this all companies have commented on momentum remained stong (according to a recent comment fom LOrals CEO, Agon,thereisabsolutelynosignofslowingdownofconsumptioninChinaand generallyinabroaderpictureinAsiaingeneral),thequestionsthatpersistinvestors minds are: can such growth be lapped, and

41、 for how long can elevated momentum bemaintained?A key contributor to companies growthOver the last two years, organic top-line growth of many of the global beauty companies has accelerated strongly with Beiersdorf, Este Lauder, LOral and P&G Beauty reporting +6.6% on average for calendar 2017 and 2

42、018 - a clear step-up from +3.3% for calendar 2014 through 20162.Given the strong correlation between organic top-line growth and share-price performanceinasectorwhereinvestingisaboutbackingbusinessesthatbehind their brands to serially compound over the long term, this has led to number of stocks re

43、aching nw all-time highs, including Este Laude, LOral, andP&G.Figure 8: Over the last two years, global beauty companies LFL growth has been accelerating.FigureFigure 8: Over the last two years, global beauty companies LFL growth has been accelerating.Figure9:Resultinginnewall-timehighsharepricesfor

44、 LOral(belw)andEsteLauder4.0%2.0%0.0%BeiersdorfP&GLOralEsteLauderLVMHP&C2014-162017-1824080604020Dec-92 Dec-93 Dec-94 Dec-95 Dec-96 Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-180Dec-92 Dec-93

45、Dec-94 Dec-95 Dec-96 Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-1812%LFL growth (RHS)Share price ()LFL growth (RHS)Share price ()8%6%4%2%0%Source: Company data, DBSource: DB, FactsetSource: Co

46、mpany data, DBSource: DB, FactsetThis was driven by a strong acceleration in Asia (with organic top-line in the high teens) and in luxury products (with organic top-line growth in Not all companies beneted from this pick-up as Coty struggled with the integration of the businesses acquired from P&G,

47、while Henkel and Unilever were adversely impacted by their category and regional mix (and past lack of brand investment in the case of Henkel)mid-teens)3-benetingcompanieswithsubstantialexposuretotheseclusters, notablyEsteLaude,LOralandVMHserfumes&Cosmeticsdivision. skincarewastraditionallythemaindr

48、iver(giventhecategorysgrowthandsize), make-uphasbecomeanincreasinglyimportantcontributoroverthelastyears.Figure 10: Asia and luxury have contributed the lion share of the beauty sectors growth in 2017 and 2018Figure 11: While the Korean and Japanese beauty companies tend to over-index in China, the

49、US and European players have made good progressFigure 10: Asia and luxury have contributed the lion share of the beauty sectors growth in 2017 and 2018Figure 11: While the Korean and Japanese beauty companies tend to over-index in China, the US and European players have made good progress27.5%25.0%2

50、2.5%LFL growth (%)20.0%LFL growth (%)17.5%15.0%12.5%10.0%7.5%La prairie (33%)EL Asia (47%)LO Asia (68%)LO Luxe (67%)BD AAA (47%)LVMH Perfumes & CosmeticsEste Lauder30%25%20%15%10%5%Amore PacificLG H&HShiseidoP&GLOccitaneLVMH P&CLOralEste LauderBeiersdorfHenkelKosUnileverKaoCoty0%Amore PacificLG H&HS

51、hiseidoP&GLOccitaneLVMH P&CLOralEste LauderBeiersdorfHenkelKosUnileverKaoCoty5.0%0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110%P&G commented on mid-teens growth in China/ strong double-digit growth in skin care, notably SK-II. Source: Company data, DBSource: Company data, DBP&G commented on mid-te

52、ens growth in China/ strong double-digit growth in skin care, notably SK-II. Source: Company data, DBSource: Company data, DBThe driver behind the acceleration in Asia and luxury was demand Chinese consumes - at home and treling aboad. While China directly accounted for an average 8% of global beaut

53、y companies sales4, the overall exposuretoChineseconsumerswasmeaningfullyhigher,giventheirimportance inthetravelretailchannel,whichaccountedformid-tohigh-teensofsalesfor theliesofEsteLaude,LOralandVMHerfumes&Cosmetics.How sustainable is the growth in China?With all of this in mind, the key question

54、is: How sustainable is the growth in China?On the one hand, companies are seeing no slowdown56 and remain bullish on the long-term outlook, gien supportie economics,relativelylowper-capitaconsumptionlevelsandkeeninterestinpremiumization(notablyamongyoungeragecohorts).On the other hand, some grey clo

55、uds have been gathering, including slowing economic growth, mounting tari concerns and rising oversight on Chinese who buy goods oshore in order to sell them domestically (daigou).What we are seeing in fact is an increase in the consumption by Chinese consumers generallywith, ofcourse,aspecialmentio

56、nforluxury.(Jean-PaulAgon)his is based on the erage of Beiesdorf Consume, Henel Beaut, LOral, VMH erfumes &Cosmetics, Unilever Beauty, Coty, Este Lauder and P&G.We do not see a sign at this point of slowdown of the consumer in China as witnessed by those results.Marketgrowthratescontinuetoberelative

57、lystrong.(JonMoeller,P&G,January2019).DemandforprestigebeautyfromChineseconsumerhasremainedstrongsowehavenotseen an impact of macro issues. (Fabrizio Freda, Este Lauder, February 2019)Comps will not be helping. Needless to year-on-year comparisons will be an additional hurdle as the likes of Este La

58、uder and going to lap organic top-line growth in the low to mid-teens in luxury and in the low to mid-twenties inAsia.Figure 12: Chinese GDP growth has been slowing and isFigure 12: Chinese GDP growth has been slowing and isforecasttocontinuetoslowoverthenextcoupleof yearsFigure 13: Luxury year-on-y

59、ear comparisons will weigh on organic top-line growth in 2019e14.0%14.0%12.0%12.0%10.0%10.0%8.0%8.0%6.0%6.0%4.0%4.0%1Q122Q121Q122Q123Q124Q121Q132Q133Q134Q131Q142Q143Q144Q141Q152Q153Q154Q151Q162Q163Q164Q161Q172Q173Q174Q171Q182Q183Q184Q182.0%0.0%0.0%Source: DBSource: DB, company dataSource: DBSource:

60、DB, company datathought the best way to answer this question would be to go to the source and ask the consumers themselves. surveyed 700 consumers across all age and income groups and covering a range of city tiers, focusing on the skin care and make-up segments (which accounted for 52% and 10% of C