Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company achieved a robust performance in the first half of 2025, with revenue and net profit increasing by 31.3% and 36.1% year-on-year, respectively [4] - The introduction of new fragrance products has further strengthened the company's high-end beauty positioning [8] - The company has successfully improved its operational efficiency, leading to a significant decrease in expense ratios [6][9] - The online and offline channels have both shown strong growth, with online sales increasing by 39% and offline sales by 26.6% [5] Financial Performance - In the first half of 2025, the company reported revenue of 2.59 billion yuan and a net profit of 670 million yuan, with an earnings per share (EPS) of 1.37 yuan [4] - The gross profit margin slightly decreased to 84.2%, while the net profit margin improved to 25.9% [6] - The company’s operating cash flow reached 830 million yuan, reflecting a year-on-year increase of 34.2% [7] Product and Channel Analysis - The revenue breakdown for the first half of 2025 shows that color cosmetics, skincare, fragrance, and makeup artistry training contributed 55%, 42%, 0.4%, and 2.6% to total revenue, respectively [5] - The company has expanded its offline presence with 405 self-operated counters and 32 distributor counters, marking a net increase of 27 and 1, respectively [5] Future Outlook - The company expects continued high-quality growth, with revised net profit forecasts for 2025, 2026, and 2027 set at 1.21 billion, 1.58 billion, and 2.04 billion yuan, respectively [9] - The current stock price corresponds to a price-to-earnings (P/E) ratio of 36 for 2025, indicating a favorable valuation [9]

Summary of Mao Geping Cosmetics Co. (1318.HK) Conference Call Company Overview - **Company**: Mao Geping Cosmetics Co. (1318.HK) - **Period**: 1H25 (First Half of 2025) Key Financial Metrics - **Sales**: RMB 2,588 million, up 31% year-over-year (yoy) [1][3] - **Net Income (NI)**: RMB 670 million, up 36% yoy [1][3] - **Operating Profit (OP)**: RMB 873 million, up 45% yoy [1][3] - **Gross Margin**: 84.2%, down 0.7 percentage points (ppt) yoy [10][12] - **Net Margin**: 25.9%, up 0.9 ppt yoy [13] Sales Performance By Channel - **Online Sales**: RMB 1,297 million, up 39% yoy, but 6% below Goldman Sachs estimates (GSe) [9][4] - **Offline Sales**: RMB 1,224 million, up 27% yoy, exceeding GSe by 3% [7][4] By Category - **Color Cosmetics**: RMB 1,422 million, up 31% yoy, contributing 55% of total sales [4][1] - **Skincare**: RMB 1,087 million, up 33% yoy, contributing 42% of total sales [4][1] - **Fragrance**: RMB 11 million in sales [4][1] Operating Efficiency - **Selling and Distribution Expenses**: Increased by 24.8% yoy to RMB 1,169 million, but 9% lower than GSe [11][12] - **Selling Expenses Ratio**: Declined by 2.4 ppt yoy to 45.2%, significantly below GSe of 48.8% [11][12] Future Outlook and Strategies - **Discussion Points for Upcoming Briefing**: 1. Sustainability of 1H margin and details behind selling expenses ratio decline [2] 2. Full year 2025 outlook [2] 3. Strategies for Double 11 sales event [2] 4. Skincare category strategy and online channel expansion [2] 5. Updates on fragrance line performance and new product pipelines [2] Risks and Considerations - **Key Risks**: 1. Variability in beauty consumption penetration in China [18] 2. Online penetration rates [18] 3. Development of new star SKUs, especially in skincare [18] 4. ROI on expanding consumer base [18] 5. Key person risk [18] Valuation and Price Target - **12-Month Price Target**: HK$ 86, based on a 25x 2027E P/E [17] - **Current Price**: HK$ 96.45, indicating a downside potential of 10.8% [20] Conclusion Mao Geping Cosmetics Co. has shown strong growth in sales and net income for 1H25, driven by both online and offline channels. The company is focusing on operational efficiency and has plans for future growth, particularly in the skincare category and online expansion. However, it faces risks related to market penetration and product development. The current valuation suggests a potential downside, warranting careful consideration for investors.

Core Viewpoint - 毛戈平 (01318) reported a significant increase in both revenue and profit for the six months ending June 30, 2025, indicating strong business performance and growth potential [1] Financial Performance - Revenue reached 2.588 billion RMB, representing a year-on-year increase of 31.28% [1] - Shareholder profit amounted to 670 million RMB, reflecting a year-on-year growth of 36.11% [1] - Basic earnings per share were reported at 1.37 RMB [1] Sales Growth - The increase in revenue was primarily driven by product sales, which rose from 1.9 billion RMB in the same period last year to 2.521 billion RMB, marking a 32.7% increase [1]

Core Insights - The company reported a revenue of RMB 2.5882 billion for the first half of 2025, representing a year-on-year growth of 31.3% [1] - The net profit for the same period was RMB 670.4 million, showing a year-on-year increase of 36.1% [1] Revenue Breakdown - The sales revenue from color cosmetics reached RMB 1.4223 billion, with a year-on-year growth of 31.1% [1] - The sales revenue from skincare products amounted to RMB 1.0872 billion, reflecting a year-on-year increase of 33.4% [1] Product Innovation and Market Expansion - The company launched two new high-end perfume series, "Guoyun Ningxiang" and "Wendao Dongfang," expanding its product offerings into the fragrance market [1] - The new series emphasizes the company's philosophy of Eastern aesthetics, utilizing high-quality raw materials and craftsmanship [1] Brand Presence and Customer Engagement - As of June 30, 2025, the company has established brand counters in over 120 cities across China, including 405 self-operated counters and 32 distributor counters [2] - The company employs over 3,100 beauty consultants at its counters, making it one of the largest service teams among domestic and international beauty brands in China [2]

Core Viewpoint - The company reported a significant increase in revenue and profit for the six months ending June 30, 2025, indicating strong business performance and growth potential [1] Financial Performance - Revenue reached 2.588 billion RMB, representing a year-on-year increase of 31.28% [1] - Shareholder profit amounted to 670 million RMB, reflecting a year-on-year growth of 36.11% [1] - Basic earnings per share were reported at 1.37 RMB [1] Sales Growth - The increase in revenue was primarily driven by product sales, which rose from 1.9 billion RMB in the same period last year to 2.521 billion RMB, marking a 32.7% increase [1]

MAO GEPING COSMETICS CO., LTD. 毛戈平化妝品股份有限公司 （於 中 華 人 民 共 和 國 註 冊 成 立 的 股 份 有 限 公 司） 提名委員會職權範圍 毛 戈 平 化 妝 品 股 份 有 限 公 司（「本公司」）的 提 名 委 員 會（「委員會」）職 權 範 圍（「職權範圍」）載 列 如 下。 1. 目 的 1.1 委 員 會 旨 在 物 色、考 慮 和 向 本 公 司 董 事（「董 事」）會（「董事會」）推 薦 合 適 人 選 出 任 董 事、監 管 評 估 董 事 會 表 現 的 流 程、制 訂 提 名 指 引 及 向 董 事 會 提 供 推 薦 建 議，有 關 指 引 須 符 合 任 何 適 用 法 律、 法 規 及 上 市 準 則。 2. 組 成 3. 會 議 3.1 除 下 文 另 有 指 明 外，本 公 司 的 公 司 章 程（「章 程」）（經 不 時 修 訂）所 載有關規範董事會議及議事程序的條文應適用於委員會會議及 議 事 程 序。 – 1 – 2.1 委 員 會 由 董 事 會 不 時 委 任，至 少 由 三 名 成 員 組 成，多 數 成 員 須 為 獨 ...

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內 容 概 不 負 責，對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，並 明 確 表 示，概 不對因本公告全部或任何部分內容而產生或因倚賴該等內容而引致的 任 何 損 失 承 擔 任 何 責 任。 MAO GEPING COSMETICS CO., LTD. 毛戈平化妝品股份有限公司 （於 中 華 人 民 共 和 國 註 冊 成 立 的 股 份 有 限 公 司） （股 份 代 號：1318） 截 至2025年6月30日止六個月之中期業績公告 毛 戈 平 化 妝 品 股 份 有 限 公 司（「本公司」）董 事 會（「董事會」）謹 此 公 佈 本 公 司 及 其 附 屬 公 司（「本集團」）截 至2025年6月30日 止 六 個 月 之 未 經 審 計 業 績。 本公告列載本公司2025年 中 期 報 告 全 文，並 符 合 香 港 聯 合 交 易 所 有 限 公 司 證 券 上 市 規 則 中 有 關 中 期 業 績 初 步 公 告 附 載 的 資 料 之 要 求。 本公司審計委員會已審閱本集團截至2025年6月30日止六個月之中期 ...

Summary of Conference Call Industry Overview - The 2024 cosmetics market is showing a trend towards female-oriented consumption, with the high-end cosmetics segment performing exceptionally well, indicating significant potential for market upgrades [2][4] - Within high-end cosmetics, the base makeup category accounts for over 50% of the market share, making it the largest category, with structural upgrades driving the high-end trend [2][5] Key Insights and Arguments - The high-end base makeup price segment is growing faster than the mass price segment, with average prices across all price ranges on platforms like Tmall increasing [2][5] - Over the past five years, the overall average price of base makeup has consistently risen, with high-end brands on Tmall and Douyin showing a significantly higher market share compared to other categories, indicating a strong demand growth [2][5] - The company has seen a steady increase in its overall market share, with a growth rate from 2019 to 2023 that is only surpassed by USL and NAS. In 2023, the company achieved a 2% market share in the cosmetics sector, ranking 15th overall and 8th among high-end brands [2][6] Company Performance and Strategies - The company's online market share is increasing at a rate that far exceeds other foreign high-end brands, attributed to strong performances in traditional categories such as foundation, cushion, concealer, and highlighter, with these products ranking in the top ten [2][6] - The company is actively expanding into new product lines, such as black cream and skin clothing, which are expected to become new growth points and further solidify its position in the high-end base makeup market [2][6] Product Development Advantages - The company boasts a strong product development capability, led by a team centered around "Teacher Wang" and an artistic committee that deeply understands domestic consumer needs, continuously improving product quality [3][7] - This technical insight and research capability enable the company to launch high-quality products tailored to the characteristics of Chinese consumers, supporting its core competitiveness [3][7] Future Growth Drivers - From an investment perspective, the main drivers for the company's future development are the trend towards high-end base makeup products and the company's multi-faceted product layout strategy [2][8] - These factors together form the company's core competitive advantage, allowing it to maintain market leadership and achieve stable growth [2][8]

Group 1 - The top three companies with the highest short positions as of August 15 are WuXi AppTec (02359), CATL (03750), and COSCO Shipping Holdings (01919), with short ratios of 14.92%, 14.41%, and 13.40% respectively [1][2] - The companies with the largest absolute increase in short positions are Heng Rui Medicine (01276), Yao Cai Securities (01428), and Modern Animal Husbandry (01117), with increases of 2.49%, 1.34%, and 1.31% respectively [1][2] - The companies with the largest absolute decrease in short positions are Ganfeng Lithium (01772), WuXi AppTec (02359), and Fourth Paradigm (06682), with decreases of -2.98%, -2.67%, and -2.28% respectively [1][2] Group 2 - The top ten companies with the highest short ratios include Ping An Insurance (02318) at 12.46%, Green Leaf Pharmaceutical (02186) at 12.36%, and Vanke Enterprises (02202) at 12.13% [2] - The companies with the most significant increases in short ratios include Heng Rui Medicine (01276) from 0.51% to 2.99%, Yao Cai Securities (01428) from 3.47% to 4.81%, and Modern Animal Husbandry (01117) from 4.74% to 6.05% [2] - The companies with the most significant decreases in short ratios include Ganfeng Lithium (01772) from 13.32% to 10.34%, WuXi AppTec (02359) from 17.59% to 14.92%, and Fourth Paradigm (06682) from 2.74% to 0.46% [2][3]

Summary of the Conference Call for Mao Geping Brand Industry and Company Overview - The conference call discusses the Mao Geping brand, which operates in the high-end beauty and skincare market in China. The brand has established a strong presence with over 400 counters in more than 120 cities and employs over 2,800 beauty consultants, emphasizing its offline channel advantage [2][4]. Core Insights and Arguments - **Brand Recognition and Positioning**: Mao Geping has built a unique brand identity through its personal makeup IP, which is difficult to replicate. The brand focuses on Oriental aesthetics and high-end positioning, creating a strong brand recognition that can extend into skincare and fragrance categories [2][4]. - **Skincare Product Performance**: The brand's high-end skincare line, particularly the luxury caviar mask, has achieved significant sales, with retail sales exceeding 800 million yuan, accounting for over 55% of its total skincare revenue. This success is attributed to the brand's emphasis on high-end aesthetic values rather than just product efficacy [2][8]. - **Fragrance Market Potential**: The fragrance business is seen as a crucial area for expansion. The "Smell of the East" series, inspired by cultural elements, is positioned at a price point of 680 yuan for 45ml, appealing to both entry-level and high-end consumers. The Chinese fragrance market is projected to exceed 58.8 billion yuan by 2030, and achieving a 3% market share could yield over 600 million yuan in sales for Mao Geping [3][9]. - **Growth Projections**: Mao Geping anticipates a compound annual growth rate (CAGR) of 30% to 35% over the next few years, with profit growth expected to outpace revenue growth. The brand also aims to maintain double-digit growth in cosmetic art training and related sales [4][10]. Additional Important Insights - **Competitive Advantage**: The brand's competitive edge lies in its ability to meet the specific skin characteristics and aesthetic needs of Asian consumers through a comprehensive offline experience and personalized service [4][5]. - **Learning from International Brands**: The brand can draw lessons from successful international cases like Chanel, which has successfully transitioned from makeup to skincare by maintaining a classic and elegant brand image, avoiding the pitfalls of chasing youth-oriented trends [6][7]. - **Market Dynamics**: The call highlights that many international makeup brands have struggled to transition into skincare due to conflicting brand identities focused on youth and trendiness, which do not align with the high-end skincare market's requirements [7]. This summary encapsulates the key points discussed in the conference call regarding the Mao Geping brand's strategy, market potential, and growth outlook in the high-end beauty and skincare industry.