Guotai Junan: Sanitary napkin industry products driven, optimistic about the sales performance of large single products with differentiated positioning and continuous iteration.

Guotai Junan has released a research report stating that the sanitary napkin industry is in a product-driven era, with major brands generally adopting a strategy of a single flagship product. The key to the success of a flagship product lies in differentiation positioning and continuous iteration. In terms of differentiation positioning, advanced skin feel, safety, and advanced efficacy selling points are crucial for the future competition of sanitary napkin brands; product iteration is the key strategy for extending the lifecycle of a flagship product. Related companies: 1) Chongqing Baiya Sanitary Products (003006.SZ). 2) Winner Medical (300888.SZ). Guotai Junan's main points are as follows: The sanitary napkin industry is product-driven, with brands mostly adopting a strategy of a single flagship product. The penetration rate of sanitary napkin products has peaked, and the industry's growth space is not significant. According to Euromonitor's forecast, the CAGR of the Chinese sanitary napkin industry from 2024 to 2028 will be 3.5%, mainly driven by price increases. In this context, sanitary napkin brands focus on product-driven strategies, with major brands generally adopting a strategy of a single flagship product. The main reasons for this are: 1) From a brand perspective: intense industry competition allows a single flagship product strategy to quickly seize market share; a single flagship product strategy allows for resource concentration and optimization of product structure. 2) From a consumer perspective: increased consumer demand for functional products urges brands to focus more on nurturing a single flagship product. 3) From a category-specific perspective: the high frequency and high repeat purchase characteristics of sanitary napkins form the foundations of the single flagship product strategy. The key to the success of a single flagship product lies in differentiation positioning and continuous iteration. 1) Differentiation positioning: currently, differentiation in sanitary napkins is reflected in skin feel, appearance, safety, and efficacy. Advanced skin feel, safety, and advanced efficacy selling points are crucial for the future competition of sanitary napkin brands. 2) Continuous iteration: product iteration is the key strategy for extending the lifecycle of a single flagship product. Generally, the iteration of sanitary napkin single flagship products includes: Continuing to upgrade existing innovative dimensions, such as the further advancement of the probiotics series in the Libresse Pro series in the advanced effectiveness dimension. Expanding into new innovative dimensions, such as Libresse Ultra Sleep improving on the original appearance innovation by introducing a new efficacy innovation with the introduction of the Ultra Sleep Ag+ antibacterial series. According to Guotai Junan's estimation, the revenue share of the top sanitary napkin brand's largest single product series is at least 30%, with revenue reaching up to around 4 billion yuan. Risk warning: Increasing industry competition, distortion of third-party data.