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As a company listed on the GEM at the end of 2010, the performance of Tomson Beijian (SZ300146) $ has always been excellent. However, in early 2014, the acquisition failed as the node, the stock price began to adjust, and the adjustment time has been adjusted for nearly a year. The decline in the growth rate is the factor of the Mr. Market’s concern, as shown in the figure below:

From the perspective of the growth rate, Tomson’s valuation center adjustment is unavoidable. At the same time as the growth rate has declined, we also noticed that in our lives to show more and more overseas competitive brands on the Internet or pharmacies, which has caused investors’ concerns about competition.

For investors with values, they will pay special attention to the cycle transformation between market dilemma and advantages. In fact, Tomson Beijian’s stock price adjustment time is long enough. In the fourth quarter of 2014, the fund holding volume decreased historical low, which is a rare low configuration. In view of the rising period of the industry, it may be time to be worthy of again with readers with readers again To explore the fundamentals of the industry and the company.

This article focuses on the introduction of the value points that the market may ignore Tomson Beijian. It is divided into three aspects of the changes in the regulatory system on the industry, the potential of the industry’s growth, and the project that Tomson is worth looking forward to. Mainly, not recommended for sale);

1. The changes in the regulatory system on the industry;

The regulatory system is listed as a focus on itself, because the loosening of the regulatory system has a profound effect on the growth rate of the industry and the fierce competition in the industry.

1. Differences on the supervision system of China -US dietary supplement:

Diet supplements, also known as nutritional supplements, are auxiliary means for diet to supplement the human body, trace elements, vitamins, minerals, etc. The US Food and Drug Administration (FDA) stipulates that dietary supplements are a kind of food, not a drug. Therefore, the US Food and Drug Administration does not guarantee the safety and effectiveness of dietary supplements. The US Food and Drug Administration can only take action when the dietary supplement is proven to be unsafe. In China, nutrient supplements claimed by health functions must obtain the registration and approval of the State Food and Drug Administration in accordance with the “Administrative Measures for Health Food Registration”. This has also led to the “blue hat” dietary supplement sold in the pharmacy to reassure consumers. Due to the different legal norms, the listing of foreign dietary supplements only takes 3 months. If domestic health products are listed, they need to be approved by the State Food and Drug Administration. The approval process takes 2-3 years. The differences in the Sino -US regulatory system, forming a different time and capital investment threshold when forming the market. From this point of view, it is beneficial for the formation of brand and funding Tomson Beijian. It will further affect the distribution of future market share and follow -up talks. In the short term, the possibility of fully liberalization is small, and the national conditions determine that food safety is still a major problem in China.

2. The impact of changes in the supervision environment of the US dietary supplement on the industry

American dietary nutritional supplements started around the 1930s. At that time, product sales were strictly supervised, and dietary supplements were limited to vitamins, minerals and proteins. In the early 1970s, some manufacturers of business opportunities promoted the development of dietary nutritional supplements. In the late 1970s, the health care products company flocked, and companies such as VSI, NBTY, Herbalite, and other companies were established during this period. By the 1980s, there were more than 800 dietary supplementary vendors. From the perspective of the market size growth in the United States over the years, since 1970, it has roughly experienced four periods: high -speed start, rapid growth, explosive growth, and steady growth, as shown in the figure below:

(1) From 1970-1995, the natural growth stage, it mainly depends on the popularity of nutritional health awareness and the rapid economic development. The growth rate of the dietary supplement industry is roughly twice the GDP. In 2014, the growth rate of China’s dietary supplement industry was about 12%, and the GDP was about 7.4%, and the ratio was low. It was expected to rise to about 15%. Because the industry growth was about twice the GDP, we should be when we When the company in the dietary supplement is given a discounted valuation, the predicting prediction prediction of the second stage should be dual -digit, which then determines that the reasonable valuation center of such companies will not be low.

(2) From 1996 to 2001, it was a growth stage that benefited from the relaxation of the regulatory system. In 1994, the United States promulgated the “Dietary Supplement Health and Education Act”, which added more substances to the dietary nutritional supplement catalog and incorporated it into the food. Explosion growth, compound growth rates from 1996-2001 up to 25%.

(3) After the 21st century, the industry entered a mature period, with a compound growth rate of 6%, but it is still higher than the compound growth rate of 4%of GDP.

Judging from the history of the above three stages, the Chinese dietary supplement industry is more like a period in the 1980s, at least twenty years of rapid growth.

3. The change in the change of the regulatory system on the growth of enterprises:

From 1996 to 2001, the regulatory authorities defined dietary supplements as food, which means that the threshold has been greatly reduced, driving the industry’s rapid growth and introducing a lot of competitors. We found that the share of leading companies in the United States at that time did not significantly increase; such as GNC’s share from 13%in 1996 to 8%in 2001; NBTY’s share rose from 3%in 1996 to about 4%in 2001 in 2001. NBTY mainly benefited from the acquisition of Holland & Barrett, the largest dietary supplement company in the United Kingdom and the acquisition of other companies that surpassed the growth rate of the industry. The relaxation of the regulatory system has caused more competitors to pour in. While making the industry’s cake, it also makes it difficult for leading companies to rely on the original brand to fully seize the incremental market. On the other hand, the development route of GNC and NBTY has also brought about the growth of growth in the rapid development of the industry. GNC is mainly specialty stores, and there are fewer projects for mergers and acquisitions. Due to specialty stores, in addition to the competition between brands, it is also threatened by channel competition. For example, in the early 1980s, due to the influence of a large number of chain and pharmacy entering the dietary supplement market, GNC’s revenue and profits declined. NBTY is mainly based on non -specialty store retail channels, similar to Tomson Beijian. The NBTY wholesale business rose from 20%in 1999 to 61%. From the perspective of the number of acquisitions, the target of the merger and acquisition covers the entire industry chain, including manufacturers, brands, dealers, channels, etc. We believe that the development strategy of NBTY helps to seize a larger incremental market through the industry chain and multi -brand operations through the industry chain, as shown in the figure::

2. Industry growth potential

If an industry has a strong growth prospect, it is generally born in the world with a lot of listed companies. Secondly, in the mature market, the market value of leading companies is relatively large; in the end The market share is high, and we observe whether the meal supplement industry has the above characteristics.

1) Global dietary supplements listed companies or merging companies, but the market value is generally not large:

Listed companies in the United States include: GNC, NUSKIN (such as new), HLF (Kang Belong), Vitamin Shoppe, USANA, Manatech, etc., the market value is generally about $ 10 to 4 billion; there are NBTY, SCHIFF, Schiff, and acquired by privatization or acquisition. Martek et al.; Australia’s 30 million population has trained some listed companies, such as BKL (Blackmores), with a market value of about 500 million A $ 500 million; Holland & Barrett in the UK, which was valued at £ 3 billion when it was acquired.

Judging from the number of listed companies and the number of merged companies, the industry’s capacity can cultivate a plate, but the market value of a single company is small. In 2013, the market capacity of the US dietary supplement was about $ 32.5 billion, and the global market capacity was US $ 96 billion, which is an industry with a neutral capacity.

2) The growth and scale of leading enterprises:

Leading companies have the characteristics of fast, sustainable and stable growth, as shown in the figure below:

(Note: NBTY, GNC is the largest non -direct sales dietary supplement company in the United States; Blackmores is the largest company in the Australian industry)

After a few years after the establishment of NBTY and GNC, revenue still maintains an increase of about 8%, which is really good. Investors can see companies in the country longer.

However, as described by 1), although there are many listed companies, the market value is small, and companies that have developed for decades have a market value of only about 30 or 4 billion US dollars. Where is the question?

First of all, the industry has been from scratch, until the current scale is only close to 50 years. The industry capacity is only about $ 32.5 billion, and the market size is still in the period of stable growth. It is not like dairy, clothing, home appliances, oil, finance, etc. With the inherent huge stock market, the market capacity of the entire industry is not yet large is an important factor affecting the company’s market value. It is worth noting that the scale of the meal supplement industry in 2012 still increased by 7.5%year -on -year. The market capacity of the 1990s was around $ 8 billion, and the relaxation of the regulatory system in 1996 further stimulated the capacity growth. Secondly, the industry’s competitive saturation, the small share of the leading enterprise, and the low profitability are also the main reasons for the small market value. If the share of Coca -Cola in the soft beverage industry (Coca -Cola is 48%, 18.3%; NBTY is 10%and 7.56%), then the market value of NBTY will be at least 9 times to $ 36 billion. The question is, can the market share of leading companies continue to increase? Can profitability be enhanced?

3) The market share and profit level that the leading enterprise can reach:

Human share: In the United States, NBTY and GNC account for only 8%-10%of the market capacity. The concentration of the industry is related to the time of the transformation of the relatively competitive pattern in the industry. Most companies rose in the 1970s. From 1970-1990, they were basically in a complete competitive environment with relatively similar competitiveness. As the industry’s capacity becomes larger, the company that breaks out of breakthroughs has only begun to be listed in the late 1980s. With the help of capital market funds, it is an important time for relatively competitive transformation, that is, the transformation of a relatively large competitiveness pattern was fermented in the late 1980s. After two or 30 years of competition, the brand pattern will precipitate a relatively stable leading pattern, which will affect the industry concentration to a certain extent. Herbalife was listed in 1986, NBTY was listed in 1989, and GNC was listed in 1992 (re -market and re -listed in 2011). It does usher in a rapid growth. For example, after the listing of NBTY, it has increased by 524 times, and the market share has increased from 2%to 10%. The retail stores expanded 1.3 times in the six years after the listing of GNC in 1992. It is an important relative competitive transformation. At the time.

In addition, the small share of the leading enterprise is related to the characteristics of the meal supplement industry. For example, the industry is homogeneous for the industry as a whole, but at the same time, there are consumers’ demands for brand differentiation. Or domestic expansion is hindered, and there are often localized brands in various places. If it is more obvious than carbonated drinks, the market value of Coca -Cola reaches 180 billion yuan, and the global carbonated beverage market is about 97.5 billion US dollars. It accounts for 48%. It has uniqueness to some extent. The meal supplement is homogeneous as a whole, but there is a difference in consumption for various brands. After the market integration, several large brands will be divided into markets. From this point, it is similar to the daily chemical industry. In fact, from the perspective of the development of NBTY, multi -brand strategies are more likely to increase their share.

After the relatively competitiveness and the balance of the industry’s attributes, the market share in the region is determined. In the UK, NBTY’s brands (including Holland & Barrett, GNC (UK)) have accounted for about 50%of the UK (2006 British market capacity of 1.1 billion U.S. dollars, NBTY sales in the UK), at the same time, we have to Thanks to the competition in the European market, there is no sufficient US market. NBTY acquired Holland & Barrett in the 1990s and gave its strong financial support.

Profitability: GNC and VSI in 2013 were about 10%and 6%, respectively, and the profit margin of NBTY before delisting in 2010 was 7.56%, and Tomson Beijian’s profit margin was as high as 28.4%. The ratio of the dietary supplement is guided by the “China Diet Guidelines”. The unit content is lower than that of foreign products; the second is the difference in the cost of employee, which is not less than 8%; the third is that Tomson Beijian’s positioning is relatively high -end; Fourth, domestic dietary supplements have the threshold for approval in the market, leading to large -scale companies to enjoy cost advantages. We believe that the profit margin of domestic leading enterprises can be understood by more than 15%.

In summary, the relative advantages of capital strength, management level, and brand structure are relatively competitive, and channel development strategies have also affected the speed of development. The current share of the leading companies in the United States is determined by its historical development background. When the industry attributes determine that companies in the industry are suitable for multi -brand operations to become bigger and stronger, the concentration of the industry will be more flexible. Judging from the changes in the relative competitiveness of domestic dietary supplements, Tomson Beijian is only the only listed company in the dietary supplement industry, with strong funding strength, and has made breakthroughs in the Chinese market. It has obvious financial advantages and brands Advantages, if you are successful, multi -brand strategy may enter a healthy development stage. The growth of another company does not rely on the growth rate of the industry, but to rely on whether it can enlarge the gap with competitors. Tomson Beijian’s management ability is recognized from the word of mouth of peers or non -peers. The share of share and profit will be far beyond the current situation of leading US companies. In addition, if the traditional Chinese supplementary market can be developed, the expansion capacity is higher than the US market.

Third, Tomson Beijian is worth looking forward to

First of all, from the variety, Tomson Beijian has only about 200 varieties, and GNC is up to 2000-3,000 varieties. GNC basically does not invest in research and development every year. The R & D cost rate is about 0.03%, while Tomson Bijian’s R & D investment accounts for 3.98%of revenue. Tomson Beijian has many varieties that can be expanded. For example, in 2013, it was more than 60 million yuan in sales in 2014, which will double this year, and will account for about 8%of the total revenue. Therefore, the author believes that the attention of many investors is concentrated on the number of ceiling developed by pharmacies, and the value of the extension of large categories may be ignored.

Calcium is the largest dietary supplement in China. Tomson Beijian produced a large category product, which was very successful. The largest dietary supplement in the United States is a variety of vitamins, which is related to the dietary habits of the two countries. The second place in the United States is sports nutrition, and the annual growth rate has remained at about 13%; herbal essence has also maintained a good growth in recent years. Sports nutrition projects have grown rapidly in the past two years. For example, Candi, which sells on Taobao, sells more than 20,000 barrels of protein powder per month. GNC once missed the market for sports nutrition in the 1980s and lost its market leadership. At present, the start of the domestic sports nutrition market is like the 1980s of the United States. Tomson Beijian is expected to work in sports nutrition this year.

Another large project herbal dietary supplement, Tomson Beijian is currently giving birth to a new sub-brand-unlimited energy. The product is mainly a supplementary health product with Chinese characteristics. This market has Chinese characteristics. The stock market has a large industry capacity. Infinite can be sold on Taobao, but the large -scale promotion or investment in TV may be in the middle of the year. At present, there are no large -scale promotion because there are fewer products in hand. In summary, if the two types of large projects are considering the joint efforts at the end of the year and next year, Tomson Beijian’s income will return to more than 30%in the next few years. Most brokerage researchers have lowered Tomson’s future performance expectations, leaving room for the company’s possible super -expected growth in the future (whether the time is suitable for the short term, see people and wisdom, and do not evaluate).

Finally, when we review Gree Electric, Yili shares, etc., we will find that the long -term growth rate of their stock price is composed of these core elements: the growth of market capacity, the increase in company share, the profitability of profitability, and profitability The discount rate of improvement and valuation is made with the first three factors of Gree Electric: from 2004-2013, the industry sales increased by about 2.8 times, the market share increased by 2.85 times, and the profitability increased by 2.97 times. 23 times increase, while the market value increases 24.5 times, and the value is similar. Among them, the most wonderful factor that drives high -quality white horse stocks to grow beyond expectations is that it can continue to open the gap with competitors, and the market share under the guarantee of profitability continues to increase. Pulling the distance and speed of the distance directly affects the amplitude and probability of performance beyond expectations. Tomson’s management team has such genes.

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