Investment Rating - The investment rating for the company is "Buy" (maintained) [4] Core Views - The company has shown impressive performance in 2024, with strong growth in high-end cosmetics, indicating that domestic brands are becoming increasingly competitive [4][7] - The company is expanding its high-end retail channels and has successfully entered several prestigious department stores, enhancing its market presence [7] - The product portfolio has been significantly enriched, with over 100 new items developed in 2024, reflecting a commitment to innovation and brand elevation [7] Financial Performance Summary - Revenue for 2024 is projected at RMB 3,884.69 million, representing a year-on-year growth of 34.6% [6] - Net profit for 2024 is expected to reach RMB 880.6 million, with a year-on-year increase of 33.0% [6] - The company anticipates continued growth in net profit, with projections of RMB 1,298.2 million in 2025, RMB 1,665.9 million in 2026, and RMB 2,044.5 million in 2027, reflecting growth rates of 47.4%, 28.3%, and 22.7% respectively [6][7] Market Performance - The company has successfully established over 378 self-operated counters and 31 dealer counters across more than 120 cities in China, enhancing its distribution network [7] - The loyalty program has attracted a total of 10.3 million online and 15.1 million offline registered members, with improved repurchase rates [7] Profitability Metrics - The gross margin for 2024 is projected at 84.4%, with a slight decrease of 0.5 percentage points year-on-year [7] - The return on equity (ROE) is expected to be 25.2% in 2024, indicating strong profitability [6][9]

Investment Rating - The report maintains a "Buy" rating for the company, indicating a strong performance relative to the market [2][6]. Core Insights - The company reported a revenue of 3.88 billion RMB for 2024, reflecting a year-on-year growth of 35%, and a net profit of 0.88 billion RMB, which is a 33% increase [6]. - The adjusted net profit for 2024 was 0.92 billion RMB, showing a significant year-on-year growth of 39% [6]. - The company is positioned strongly in the high-end domestic beauty market, with a focus on expanding its product lines, particularly in the fragrance segment [6]. Financial Data and Profit Forecast - Revenue projections for the company are as follows: - 2023: 2.886 billion RMB - 2024: 3.885 billion RMB - 2025E: 5.173 billion RMB - 2026E: 6.852 billion RMB - 2027E: 8.533 billion RMB - The corresponding net profit forecasts are: - 2023: 0.662 billion RMB - 2024: 0.881 billion RMB - 2025E: 1.184 billion RMB - 2026E: 1.542 billion RMB - 2027E: 1.953 billion RMB - The company expects a compound annual growth rate (CAGR) of 34% for net profit from 2025 to 2027 [5][6][7]. Revenue Breakdown - The revenue breakdown by product category for 2024 shows: - Makeup revenue: 2.304 billion RMB (42% increase), accounting for 59.3% of total revenue - Skincare revenue: 1.429 billion RMB (23.2% increase), accounting for 36.8% - Training revenue: 0.152 billion RMB (45.8% increase), accounting for 3.9% [6]. - Online sales accounted for 47.8% of total revenue, with a year-on-year growth of 51.2% [6]. Brand Strength and Market Position - The company has expanded its offline presence to 409 counters, with a net increase of 25 in 2024, covering over 120 cities [6]. - The online sales performance on platforms like Douyin and Tmall has been strong, with significant growth in gross merchandise volume (GMV) [6]. - The overall repurchase rate increased to 30.9%, reflecting a 4.1 percentage point increase year-on-year [6]. Strategic Initiatives - The company is actively developing its fragrance product line, with several new products launched at premium price points [6]. - The report highlights the company's unique positioning in the high-end market, leveraging its professional makeup artist brand image to enhance pricing power and market share [6].

Investment Rating - The investment rating for the company is "Buy" and is maintained [2] Core Insights - The company reported a revenue of 3.885 billion yuan in 2024, representing a year-over-year growth of 34.6%, with a net profit of 881 million yuan, also showing a growth of 33.0% [4] - The company has demonstrated strong online growth, improved member repurchase rates, and maintained high net profit margins [5] - The company is expected to continue its growth trajectory with projected net profits of 1.201 billion yuan, 1.532 billion yuan, and 1.928 billion yuan for 2025, 2026, and 2027 respectively, corresponding to P/E ratios of 43x, 34x, and 27x [6] Financial Performance - In 2024, the company's revenue from cosmetics, skincare, and training was 2.3 billion yuan, 1.4 billion yuan, and 150 million yuan respectively, with year-over-year growth rates of 42%, 23%, and 46% [5] - The gross margin for the company in 2024 was 84.4%, a slight decrease of 0.5 percentage points year-over-year, primarily due to increased logistics costs [6] - The company plans to expand its store presence and has a total of 409 counters by the end of 2024, with a net increase of 25 counters [5] Revenue Projections - The projected revenue for the company is 5.212 billion yuan in 2025, 6.687 billion yuan in 2026, and 8.455 billion yuan in 2027, with growth rates of 34.17%, 28.30%, and 26.43% respectively [8] - The expected EBITDA for the company is 1.533 billion yuan in 2025, 1.956 billion yuan in 2026, and 2.451 billion yuan in 2027 [8] Profitability Metrics - The company's net profit margin is projected to be 22.7% in 2024, with a slight increase in adjusted net profit margin to 23.8% [6] - The earnings per share (EPS) is expected to be 2.45 yuan in 2025, 3.13 yuan in 2026, and 3.93 yuan in 2027 [8]

Investment Rating - The investment rating for the company is "Buy" and is maintained [2][6] Core Insights - The company reported a revenue of 3.885 billion yuan for 2024, representing a year-over-year growth of 34.6%, with a net profit attributable to shareholders of 881 million yuan, also up by 33.0% [4][5] - The online sales showed significant growth, with a 51% increase year-over-year, while offline sales grew by 22% [5] - The company maintains a high net profit margin of 22.7% despite a slight decline in gross margin due to increased logistics costs [6] Financial Performance - For 2024, the company expects revenues to reach 5.212 billion yuan, with a growth rate of 34.17% [8] - The projected net profit for 2025 is 1.202 billion yuan, reflecting a growth rate of 36.36% [9] - The company's gross margin is forecasted to be 84.24% in 2025, slightly decreasing from 84.37% in 2024 [9] Revenue Breakdown - In 2024, the revenue from makeup, skincare, and training segments is expected to be 2.3 billion yuan, 1.4 billion yuan, and 150 million yuan, respectively, with growth rates of 42%, 23%, and 46% [5] - The average selling price for makeup increased by 6%, while skincare saw a decrease of 3% [5] Membership and Repurchase Rates - The repurchase rate for online and offline channels in 2024 is projected to be 27.5% and 34.9%, respectively, showing an increase of 5.5 percentage points and 2.1 percentage points year-over-year [5] Future Outlook - The company plans to continue expanding its store network and introduce new products, with a focus on international markets, indicating significant growth potential [6] - The forecasted net profit for 2027 is expected to reach 1.93 billion yuan, with a corresponding price-to-earnings ratio of 27 times [6][8]

Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of 127.89 HKD [8][9]. Core Views - The company is expected to achieve a revenue of 3.885 billion RMB in 2024, representing a year-on-year growth of 34.6%, with a net profit of 880.61 million RMB, also reflecting a growth of 33% [1]. - The online sales data has shown strong performance, while offline expansion into high-end malls like SKP is enhancing brand value [1]. - The introduction of new products such as body creams and eyeshadow is anticipated to drive long-term growth [1]. Revenue Breakdown - In 2024, the revenue from cosmetics is projected to be 2.304 billion RMB, accounting for 59.3% of total revenue, with a year-on-year growth of 42% [2]. - Skincare revenue is expected to reach 1.429 billion RMB, making up 36.8% of total revenue, with a year-on-year growth of 23.2% [2]. - Training revenue is forecasted at 152 million RMB, representing 45.8% of its segment, with a year-on-year growth of 45.8% [2]. Online and Offline Performance - Offline revenue is projected to be 1.949 billion RMB in 2024, accounting for 52.2% of total revenue, with a year-on-year growth of 21.6% [3]. - Online revenue is expected to reach 1.784 billion RMB, making up 47.8% of total revenue, with a year-on-year growth of 51.2% [3]. - The company plans to continue establishing counters in high-end department stores, particularly in first-tier cities, to enhance brand influence [3]. Customer Retention and Financial Metrics - The online channel's repurchase rate is 27.5%, an increase of 5.5 percentage points year-on-year, while the offline channel's repurchase rate is 34.9%, up by 2.1 percentage points [4]. - The gross profit margin is reported at 84.4%, with a slight decrease of 0.4 percentage points year-on-year, attributed to increased logistics and transportation costs [4]. Profit Forecast and Valuation - The forecast for net profit attributable to the parent company for 2025-2027 is 1.175 billion RMB, 1.533 billion RMB, and 1.917 billion RMB respectively, with slight upward adjustments from previous estimates [5]. - The target price is set at 127.89 HKD, corresponding to a PE ratio of 38 times for 2026, reflecting improved liquidity and growth potential from new product categories [5].

Financial Performance - The company reported a revenue of RMB 3,884,694,000 for the year ending December 31, 2024, representing a 34.7% increase from RMB 2,885,964,000 in 2023[15] - Gross profit for the same period was RMB 3,277,518,000, up from RMB 2,448,245,000 in 2023, indicating a significant growth in profitability[15] - The net profit for the year was RMB 881,329,000, which is a 32.9% increase compared to RMB 663,470,000 in 2023[15] - The total assets of the company reached RMB 4,473,469,000, a substantial rise from RMB 2,094,568,000 in 2023[15] - The total liabilities increased to RMB 969,946,000 from RMB 546,582,000 in 2023, indicating a rise in financial obligations[15] - The return on equity (ROE) was reported at 34.9%, down from 49.5% in 2023, reflecting changes in profitability metrics[15] - Total revenue increased from RMB 2,886.0 million in 2023 to RMB 3,884.7 million in 2024, marking a growth of 34.6%[20] - Net profit rose from RMB 663.5 million in 2023 to RMB 881.3 million in 2024, reflecting a growth of 32.8%[20] - Revenue increased by 34.6% from RMB 2,886.0 million in 2023 to RMB 3,884.7 million in 2024, driven by product sales growth of 34.2%[105] - Total product sales revenue reached RMB 3,732.979 million in 2024, a significant increase from RMB 2,781.892 million in 2023, with domestic sales accounting for 99.9% of total revenue[110] Market Expansion and Strategy - The company successfully listed on the Hong Kong Stock Exchange, marking a significant milestone in its development strategy[16] - In 2024, the company expanded its high-end department store channels, entering Wuhan SKP, Chengdu SKP, and Hangzhou Tower, with over 378 self-operated counters and 31 distributor counters across more than 120 cities[17] - The company aims to enhance its competitive advantage through efficient collaboration across product development, research, and education[16] - The company plans to enhance its global brand presence and expand into overseas markets through strategic partnerships with high-end department stores[96] - The strategy for online expansion includes building its own official online store and broadening coverage on third-party e-commerce platforms[92] - The company plans to gradually shift some outsourced production processes to in-house production to enhance quality control and reduce production costs[74] Product Development and Innovation - The company upgraded and developed over 100 new products in 2024, resulting in a product portfolio of over 400 items across two categories by the end of the year[17] - The product development strategy focuses on makeup and skincare, with plans to launch unique products targeting various skin tones and types[93] - The company aims to enhance its market position by integrating traditional cultural elements with advanced technology in its product offerings[30] - The product development team consists of 57 experienced employees, with 82.5% holding a bachelor's degree or higher, and an average work experience of over 13 years[60] - The product design and development process typically takes six to eight months, with some limited edition products requiring ten to twelve months[63] - The company has developed over 100 new products for the MAOGEPING and ZHI AI ZHONG SHENG brands in the fiscal year 2024, focusing on highlighter and contour products specifically designed for Chinese skin tones[68] Sales and Distribution - Makeup product sales reached RMB 2,304.1 million, accounting for 59.3% of total revenue in 2024, up from RMB 1,622.2 million (56.2%) in 2023[104] - Skincare product sales increased to RMB 1,428.9 million, representing 36.8% of total revenue in 2024, compared to RMB 1,159.7 million (40.2%) in 2023[104] - Offline sales accounted for 52.2% of total product sales in 2024, while online sales made up 47.8%[108] - Online revenue increased from RMB 1,179.8 million in 2023 to RMB 1,784.3 million in 2024, reflecting steady growth in online channels[80] - Revenue from online sales surged by 51.2% from RMB 1,179.8 million in 2023 to RMB 1,784.3 million in 2024, primarily due to a rise in direct online sales from RMB 931.2 million to RMB 1,428.6 million[109] Training and Education - The makeup training business generated revenue of RMB 151.7 million in 2024, representing a year-on-year growth of 45.8%, exceeding pre-pandemic levels[18] - The training institutions have enrolled over 6,000 students in 2024, representing a year-on-year growth of 20.4% compared to 2023[59] - The company is committed to professional makeup training to enhance the aesthetic standards in China[186] - The company aims to cultivate a new generation of makeup artists and beauty enthusiasts through comprehensive training programs[186] Leadership and Governance - The company has a strong leadership team with independent non-executive directors who have extensive experience in finance and management, including Mr. Gu Jiong and Mr. Huang Hui, both appointed in April 2024[157][161] - The company emphasizes the importance of educational qualifications among its leadership, with many members holding advanced degrees in business and law[162][168] - The company has a structured approach to governance, with a clear delineation of roles among directors, supervisors, and senior management[163] - The management team is focused on leveraging their extensive industry experience to drive the company's strategic initiatives and operational efficiency[164] Corporate Social Responsibility - The company emphasizes gender diversity in its workforce, with a significant majority of female employees[177] - The company has a comprehensive employee benefits plan, including retirement plans and various insurance options[177] - The company has implemented specific training programs for employees based on departmental needs, including compliance and product training[178] Future Outlook - The company aims to establish overseas R&D centers to develop proprietary product formulas and collaborate with local laboratories[102] - A new R&D center in Hangzhou is under construction, expected to be completed by the end of 2026, to strengthen product design and development capabilities[101] - The company is focusing on high-potential product lines, particularly skincare, to align with industry trends and maximize investment returns[101]

Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [10]. Core Viewpoints - The rapid development of the Mao Geping brand since 2019 is attributed to the favorable trends in high-end cosmetics and the return to traditional aesthetics, supported by the brand's classic philosophy, the founder's unique industry position, and high-quality products, creating significant entry barriers [3][5][21]. - The company is expected to benefit from a clear growth logic in the medium to long term, driven by product diversification and channel optimization [8][29]. Product Analysis - The brand is expanding its product lines, including color cosmetics, skincare, and fragrance, with a focus on enhancing its foundation category and introducing new products that align with consumer preferences [6][28]. - The foundation category is transitioning from niche professional products to more mainstream offerings, with a rich reserve of potential single products [32][35]. - The skincare line is being upgraded to meet technological trends, with significant products like the caviar mask becoming a flagship item [45][48]. Channel Strategy - The company has a solid offline presence while online channels are expected to become a significant source of revenue and profit, with online growth outpacing offline [7][34]. - Offline, the brand is enhancing store efficiency through strategic upgrades in shopping districts, while online, it is focusing on detailed operations to attract younger consumers [7][34]. Financial Projections - The projected net profits for 2024, 2025, and 2026 are estimated at 9.01 billion, 12.00 billion, and 15.42 billion respectively, with corresponding PE ratios of 51, 38, and 30 times [8].

Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [1]. Core Insights - The company has demonstrated strong revenue and net profit growth, with a compound annual growth rate (CAGR) of 35% for revenue and 41% for net profit from 2021 to 2023. For the first half of 2024, revenue and net profit both increased by 41% year-on-year [4][6]. - The company has a robust product development capability, with a total of 387 products as of June 30, 2024, including 337 makeup items and 50 skincare items, averaging about 75 new product upgrades annually [6]. - The company has a strong channel management capability, with 372 self-operated counters, ranking second among all beauty brands in China, and a diverse online sales presence across major e-commerce platforms [6]. - The company targets the high-end segment of the makeup market, maintaining a significant price difference from international brands, with a strong performance in light-reflecting products [6]. Financial Projections - The company is projected to achieve revenues of 40.58 billion, 55.56 billion, and 72.94 billion RMB for the years 2024, 2025, and 2026, respectively, with year-on-year growth rates of 41%, 37%, and 31% [7]. - The net profit attributable to the parent company is expected to be 8.9 billion, 12.2 billion, and 16.3 billion RMB for the same years, with growth rates of 35%, 37%, and 34% [7]. - The report provides a price-to-earnings (P/E) ratio forecast of 52, 38, and 28 for the years 2024, 2025, and 2026, respectively, based on the closing price of 101.0 HKD on March 14, 2024 [6][7].

Investment Rating - The report assigns a "Buy" investment rating for the company, marking its first coverage [3][7]. Core Insights - The company is positioned as a rare "makeup artist IP," reshaping the high-end beauty ecosystem with a unique pricing strategy and personalized consultation services [3]. - The company achieved impressive sales performance during the "3·8" promotional event, ranking first in the makeup and fragrance category on Douyin with a GMV of 50-70 million yuan, reflecting a 7-place increase year-on-year [5]. - Following its inclusion in the Hong Kong Stock Connect, the company is expected to see a significant increase in liquidity, benefiting from both southbound capital and passive index fund investments [6]. - Revenue forecasts for 2024-2026 are projected at 38.44 billion, 50.83 billion, and 63.98 billion yuan respectively, with corresponding EPS of 1.77, 2.36, and 2.98 yuan [7][10]. Summary by Sections Company Overview - The brand founder, Mao Geping, is a prominent figure in the makeup aesthetics field, leveraging his influence to enhance brand recognition and market positioning [3]. Market Performance - The company has shown strong online sales performance, with effective promotional strategies such as live streaming expected to further boost its growth [5]. Financial Projections - The company anticipates significant revenue growth, with a projected increase of 57.8% in 2023, followed by growth rates of 33.2%, 32.2%, and 25.9% in the subsequent years [10]. - The net profit is expected to grow from 662 million yuan in 2023 to 1.458 billion yuan by 2026, indicating a robust growth trajectory [10].

Investment Rating - The report assigns a "Buy" investment rating for the company, marking its first coverage [3][7]. Core Insights - The company is positioned as a rare "makeup artist IP," reshaping the high-end beauty ecosystem with a unique pricing strategy and personalized consultation services [3]. - The sales performance during the "3·8" promotional event was impressive, with significant online sales growth, particularly on platforms like Douyin and Tmall [5][6]. - The inclusion in the Hong Kong Stock Connect is expected to enhance liquidity and attract capital, aligning with the new consumption trends in the market [6]. Financial Projections - Revenue forecasts for 2024, 2025, and 2026 are projected at 38.44 billion, 50.83 billion, and 63.98 billion yuan respectively, with corresponding EPS of 1.77, 2.36, and 2.98 yuan [7][10]. - The company is expected to maintain a strong growth trajectory, with revenue growth rates of 33.2%, 32.2%, and 25.9% for the next three years [10]. - The projected net profit for the same years is 868 million, 1.155 billion, and 1.458 billion yuan, reflecting growth rates of 31.2%, 33.1%, and 26.2% [10].