Investment Rating - The report assigns a "Buy" rating for the company, Mao Geping [6] Core Insights - Mao Geping is a rare high-end domestic beauty brand that leverages the unique "light and shadow aesthetics" concept developed by its founder to create makeup and skincare products, establishing a competitive moat through offline experiential makeup services. The projected net profits for 2024-2026 are estimated at 0.893 billion, 1.172 billion, and 1.467 billion CNY, respectively, with corresponding EPS of 1.82, 2.39, and 2.99 CNY, leading to a PE ratio of 37.4, 28.5, and 22.7 times [6] Company Overview - Mao Geping is positioned as a high-end domestic beauty brand with over 20 years of industry experience, evolving through three stages: initial brand creation (2000-2007), market deepening (2008-2018), and rapid expansion (2019-present) [24] - The company has a concentrated ownership structure, with the Mao family holding a significant portion of shares, ensuring stability and continuity in management [27][30] Financial Performance - The company has shown consistent high double-digit growth in revenue and profit, with 2022-2024H1 revenues of 1.829 billion, 2.886 billion, and 1.972 billion CNY, reflecting year-on-year growth rates of 16.0%, 57.8%, and 41.0% respectively. The net profits for the same period were 0.338 billion, 0.639 billion, and 0.492 billion CNY, with growth rates of 6.4%, 88.0%, and 41.0% [32] - The gross margin has remained high, with figures of 83.4%, 83.8%, 84.8%, and 84.8% from 2021 to 2024H1, indicating strong profitability [36] Market Growth Potential - The Chinese makeup market is still developing, with a significant gap compared to overseas markets. The domestic market size was approximately 579.8 billion CNY in 2023, with makeup accounting for only about 20.1% [49] - The report highlights the high barriers and stickiness of the facial makeup segment, suggesting that it is easier to defend than to penetrate [49] Competitive Advantages - Mao Geping's unique business model combines online and offline channels, supported by a strong founder IP and a well-established aesthetic design philosophy. The brand's focus on high-end retail channels and a robust membership base enhances its competitive edge [7][8] - The company has a diversified product line, with makeup contributing 55.1% and skincare 22.8% to total revenue in 2024H1, indicating a balanced growth strategy [24][26]

Summary of the Conference Call Company Overview - The conference call discusses **Mao Ge Ping**, a Hong Kong-listed beauty company founded by renowned makeup artist Mao Ge Ping, which has positioned itself in the high-end domestic beauty market amidst a trend of increasing consumer preference for high-cost performance products [1][9]. Industry Insights - The beauty industry is transitioning from a high-growth phase to a more mature stage, with leading companies like **Bolaia** and **Jushi Biological** showing significant growth [2][3]. - The cosmetics sector is divided into color cosmetics and skincare, with color cosmetics facing challenges due to the rapid turnover of popular products [3][4]. - The skincare market in China shows a competitive landscape, with domestic brands holding a 13.5% market share in the top 20 brands, while international brands hold 33% [7]. Key Points on Mao Ge Ping - Mao Ge Ping is unique in its ability to compete directly with international brands in the high-end segment, achieving a revenue of approximately **19.7 billion** CNY in the first half of the year, with expectations of similar performance in the second half [15][12]. - The company's gross margin is around **85%**, significantly higher than competitors like **Shangmei** and **Perfect Diary**, which range from **70% to 75%** [16]. - Revenue composition includes **55%** from color cosmetics and **41%** from skincare, aligning with international brands like **Estée Lauder** and **L'Oréal** [17][18]. Market Positioning and Strategy - Mao Ge Ping's brand strategy leverages its founder's reputation and expertise, allowing it to cater to both skincare and color cosmetics, thus raising its market ceiling [20][19]. - The company operates a dual-channel strategy with **19%** of revenue from offline sales and **47%** from online sales, primarily through its own platforms [20][21]. - The offline channel is expanding, with plans to open **30 to 40** new stores annually, aiming for **600** stores by **2030** [21]. Consumer Engagement and Services - Mao Ge Ping offers unique customer services, including free makeup sessions for members, enhancing customer loyalty and repeat purchases [25][26]. - The brand's marketing strategy includes targeting younger demographics through tailored product offerings and engaging customer experiences [24][28]. Financial Projections and Valuation - Future revenue projections estimate growth rates of **33%** and **25%** for the next two years, indicating a robust growth trajectory [32]. - The market is currently valuing Mao Ge Ping at **20 to 30 times** earnings, with potential for upward adjustments based on its growth prospects and market positioning [33][34]. Conclusion - Mao Ge Ping stands out in the beauty industry due to its high gross margins, strong brand positioning, and effective dual-channel strategy, making it a compelling investment opportunity in the high-end cosmetics market [38].

Investment Rating - The report maintains a "Buy" rating for the company [4] Core Insights - The company, Maogeping, is a rare high-end domestic beauty brand in China, leveraging the unique IP of national makeup master Maogeping. The brand covers both makeup and skincare categories, with a broad potential customer base and a commitment to long-term brand strength enhancement. The company is expected to achieve revenues of 3.88 billion, 5.06 billion, and 6.29 billion yuan from 2024 to 2026, with year-on-year growth rates of 34.5%, 30.3%, and 24.3% respectively. Net profit attributable to shareholders is projected to be 880 million, 1.17 billion, and 1.46 billion yuan, with growth rates of 33.3%, 32.6%, and 24.7% respectively [3][4][12]. Financial Summary - The company reported a revenue of 2.886 billion yuan in 2023, with an expected increase to 3.882 billion yuan in 2024, 5.060 billion yuan in 2025, and 6.291 billion yuan in 2026, reflecting growth rates of 57.78%, 34.52%, 30.33%, and 24.33% respectively. The net profit attributable to shareholders is forecasted to rise from 662 million yuan in 2023 to 882 million yuan in 2024, 1.170 billion yuan in 2025, and 1.458 billion yuan in 2026, with growth rates of 88.00%, 33.30%, 32.57%, and 24.66% respectively [4][5][12]. Business Model and Market Position - Maogeping's business model is unique, combining personal IP, a makeup school, and offline services. The company operates two major beauty brands, Maogeping and Ziai Zhongsheng, with a strong presence in both offline department stores and online platforms. The offline channel contributes significantly to revenue, with 372 self-operated counters nationwide, ranking second among all beauty brands in China [3][19][20]. Industry Overview - The beauty and personal care market in China is transitioning from a high-growth phase to a more mature stage, with overall market growth slowing from a CAGR of 11% (2015-2019) to 3% (2019-2023). The skincare segment remains dominant, accounting for 51% of the market, while the makeup segment represents 11% [29][30]. The high-end beauty market is growing faster than the mass market, with a CAGR of 15% compared to 4% for mass products [22][24]. Competitive Landscape - The high-end cosmetics market is primarily dominated by international brands, which hold a significant market share. However, domestic brands like Maogeping are gradually increasing their presence, with the market share of leading domestic skincare brands rising from 6.5% in 2014 to 13.5% in 2023 [22][31]. The report highlights that brand strength and emotional connection are critical barriers to entry in this competitive landscape [29].

Investment Rating - The report assigns an "Accumulate" rating for the company, indicating a positive outlook for its stock performance in the next six months [5][212]. Core Insights - The beauty industry is experiencing steady growth, with a market size nearing 600 billion, and a year-on-year increase of 5.0% in 2023. The high-end segment accounts for nearly 30% of the market, with expectations for stable growth in skincare and makeup demand [19][20]. - The company, MAOGEPING, is positioned as a leading high-end domestic beauty brand, with significant revenue growth and a unique brand identity that combines light and shadow aesthetics with Eastern beauty principles [2][8]. - The company has a strong online and offline channel strategy, with online revenue growth of 69.9% in 2023 and 63.4% in the first half of 2024, while offline channels remain crucial for customer loyalty and brand experience [3][131]. Summary by Sections 1. Beauty Industry Overview - The beauty industry is in a phase of steady growth, with high-end products gaining market share. The high-end beauty market reached 471 billion for color cosmetics and 1471 billion for skincare in 2023, with year-on-year growth rates of 9.5% and 5.8% respectively [19][20]. - Online channels have been the primary source of growth, but offline channels are expected to maintain their importance due to the experiential nature of beauty products [28][29]. 2. Company Overview - MAOGEPING, led by renowned makeup artist Mao Geping, is the only Chinese company in the top 10 high-end beauty market. The company reported revenues of 28.9 billion and 19.7 billion for 2023 and the first half of 2024, respectively, with year-on-year growth rates of 57.8% and 41.0% [2][8]. - The brand's unique positioning and strong product lines in both color cosmetics and skincare are expected to drive further growth [2][8]. 3. Brand and Product Development - The company has a comprehensive product matrix with 387 SKUs, focusing on both color cosmetics and skincare. The integration of these two categories enhances customer loyalty and brand strength [107][111]. - The brand's pricing strategy effectively captures both premium and budget-conscious consumers, filling a gap in the high-end domestic beauty market [111][117]. 4. Channel Strategy - The company has established a robust offline presence with 372 direct-operated counters and a growing online presence through platforms like Tmall and Douyin. The online channel is expected to continue its rapid growth, with significant potential for customer base expansion [130][131]. - The offline channel remains critical for customer engagement, providing a unique shopping experience that online platforms cannot fully replicate [29][30]. 5. Financial Projections - Revenue forecasts for 2024-2026 are projected at 40.5 billion, 54.9 billion, and 70.5 billion, with corresponding year-on-year growth rates of 40.4%, 35.3%, and 28.5% [198][212]. - The company is expected to maintain high profitability, with gross margins projected to be around 84.6% to 85.2% over the same period [204][205]. 6. Investment Recommendation - Given the company's unique brand positioning, strong growth potential, and the expected performance of its stock, the report recommends an "Accumulate" rating, with a target price of 77.08 HKD by 2025 [212].

Investment Rating - The report assigns a "Buy" rating for the company, indicating a positive outlook for its future growth potential in the high-end beauty market [5][10]. Core Insights - The company is positioned as a leading high-end beauty brand in China, with significant growth opportunities ahead. It has established a strong market presence and is expected to benefit from the rising demand for premium beauty products [12][19]. - The beauty market in China is projected to grow steadily, with high-end skincare and makeup segments expected to outperform mass-market categories. The compound annual growth rate (CAGR) for high-end skincare and makeup is forecasted at 9.6% and 10.8%, respectively, from 2023 to 2028 [35][36]. Financial Performance and Projections - The company is expected to achieve revenue of 40.5 billion, 53.1 billion, and 67.0 billion RMB for the years 2024, 2025, and 2026, respectively, with year-on-year growth rates of 40.4%, 31.0%, and 26.2% [6][10]. - The projected net profit for the same years is 9.4 billion, 12.8 billion, and 16.0 billion RMB, with growth rates of 42.2%, 35.6%, and 25.1% [6][10]. - The current price-to-earnings (P/E) ratios are estimated at 28, 21, and 16 for the years 2024, 2025, and 2026, respectively [6][10]. Market Position and Competitive Advantage - The company is recognized as the only domestic brand among the top ten high-end beauty groups in China, ranking seventh with a market share of 1.8% as of 2023 [19][40]. - The flagship brand, MAOGEPING, is the only domestic brand in the top fifteen high-end beauty brands in China, indicating a strong competitive position in the market [19][40]. - The company has a robust channel strategy, with a balanced contribution from both online and offline sales. As of 2024 H1, offline and online channels contributed 50.9% and 49.1% to total revenue, respectively [45][48]. Growth Strategy - The company plans to utilize the funds raised from its IPO primarily for expanding sales channels and brand building. This includes opening new stores, upgrading existing ones, and enhancing online marketing efforts [32][34]. - The company aims to open approximately 30 new counters annually in China and 2-4 overseas, alongside upgrading 70-100 existing counters each year [11][32]. Product Development and Innovation - The company has a diverse product portfolio with 387 SKUs as of 2024 H1, focusing on high-end makeup and skincare products. The average price of its cushion foundation is notably higher than that of leading domestic competitors, allowing it to avoid the crowded mass-market segment [9][11]. - The company has a strong emphasis on research and development, with an average of 75 new products launched annually from 2021 to 2024 H1 [9][11].

Summary of Conference Call Notes Company Overview - The company discussed is Mao Ge Ping, a high-end cosmetics brand in China, founded by renowned makeup artist Mao Ge Ping himself. The brand is recognized for its unique positioning in the domestic market as a premium beauty brand [doc id='3'][doc id='4']. Industry Insights - The cosmetics industry is currently in a growth phase, with expectations for strong performance by 2025 as market sentiment improves [doc id='1']. - The overall beauty market in China has shown a compound annual growth rate (CAGR) of 8.4% for skincare and 4.7% for color cosmetics from 2018 to 2023, despite some disruptions due to the pandemic in 2022 [doc id='10']. - The penetration of color cosmetics in China is still low, at about one-fifth to one-tenth of that in mature markets, indicating significant growth potential [doc id='11']. Company Performance and Strategy - Mao Ge Ping's revenue is primarily driven by its main brand, accounting for over 95% of total income, with a balanced distribution between online and offline channels [doc id='7']. - The brand has maintained a high gross margin of over 85%, attributed to its premium positioning [doc id='9']. - The company has successfully expanded its offline presence, with over 400 counters in department stores, and is noted for its strong customer service and makeup training for staff [doc id='16'][doc id='26']. Product Development and Market Position - The product mix is currently balanced, with color cosmetics accounting for 55% and skincare for 41% of revenue, reflecting a strategic expansion into skincare [doc id='8'][doc id='19']. - Mao Ge Ping has a unique product development approach, focusing on high-quality, long-lasting products tailored to the needs of Asian consumers, particularly in color cosmetics [doc id='17'][doc id='31']. - The brand has seen significant growth in its skincare line, driven by customer demand and loyalty [doc id='20']. Financial Projections - Revenue projections for 2024 to 2026 are optimistic, with expected revenues of 3.9 billion, 5.1 billion, and 6.3 billion RMB, representing growth rates of 36%, 29%, and 24% respectively [doc id='33']. - Profit forecasts align with revenue growth, estimating net profits of 890 million, 1.16 billion, and 1.45 billion RMB for the same period, with growth rates of 35%, 30%, and 25% [doc id='33']. Competitive Advantages - The brand's unique selling proposition includes the founder's strong personal brand and expertise in makeup, which enhances its marketability and customer trust [doc id='15']. - Mao Ge Ping is positioned as the only domestic brand capable of competing with foreign high-end brands in the Chinese market [doc id='14']. Conclusion - Mao Ge Ping is poised for significant growth, supported by a strong brand foundation, effective product strategies, and a unique market position. The company is recommended for investment, with a target price of 72.38 RMB per share, reflecting a bullish outlook on its future performance [doc id='34'].

Investment Rating - The report initiates coverage with a "Buy" rating for the company [3][8]. Core Insights - The company is positioned as a high-end beauty brand, leading the trend of Eastern aesthetics. It has a strong personal IP and a well-established product matrix, focusing on both color cosmetics and skincare [2][6][23]. - The Chinese beauty market is experiencing rapid growth, particularly in the high-end segment where domestic brands are gaining traction. The company is expected to benefit from this trend, with significant revenue growth projected for the coming years [8][51][56]. Summary by Sections Company Overview - The company was founded in 2000 by renowned makeup artist Mao Geping and has grown into a leading high-end domestic beauty group. The founders hold a combined 47.9% stake in the company, ensuring stable governance and strategic continuity [6][27]. - The company reported a revenue of 2.89 billion yuan in 2023, with a compound annual growth rate (CAGR) of 35% from 2021 to 2023 [34]. Market Potential - The overall Chinese beauty market is projected to grow significantly, with the market size expected to reach 876.3 billion yuan by 2028, driven by a CAGR of approximately 8.6% [51][54]. - The skincare segment is particularly strong, accounting for nearly 80% of the beauty market, while the color cosmetics market is also expanding rapidly [54][56]. Competitive Advantages - The company's core competitive edge lies in its unique combination of personal IP, product offerings, distribution channels, and marketing strategies that resonate with consumers [7][10]. - The product matrix includes a wide range of color cosmetics and skincare products, with star products like the "Light Sensation No-Trace Powder" and "Luxury Caviar Mask" driving sales [7][100][105]. Financial Projections - Revenue forecasts for 2024-2026 are 40.2 billion yuan, 52.7 billion yuan, and 64.2 billion yuan, respectively, with year-on-year growth rates of 39.36%, 31.08%, and 21.72% [8][145]. - The projected net profit for the same period is 9.3 billion yuan, 12.4 billion yuan, and 15.4 billion yuan, with corresponding growth rates of 40.56%, 33.52%, and 23.80% [8][145]. Sales Channels - The company employs a multi-channel sales strategy, with a strong emphasis on direct sales. As of 2024, offline sales accounted for 46.1% of total revenue, while online sales reached 38.8% [112][116]. - The company has successfully expanded its presence in both offline and online markets, leveraging platforms like Douyin and Tmall to enhance brand visibility and sales [134][138]. Brand Strategy - The company aims to enhance its brand reputation through strategic brand management and product innovation, focusing on high-quality offerings that cater to the needs of Chinese consumers [139][140]. - The brand's marketing strategy includes engaging with consumers through social media and influencer partnerships, which have significantly increased brand awareness and consumer interaction [119][121].

毛戈平（1318.HK）首次覆盖报告 何以高端？ 2025 年 01 月 04 日 ➢ 毛戈平是国内领先的中国高端美妆集团，东方美学的引领者。公司于 2000 年 7 月由中国著名化妆师毛戈平先生创立，旗下有 MAOGEPING（定位高端，主打光影 美学和东方美学理念）和至爱终生（定位大众时尚）两大品牌，业务涵盖彩妆、护肤 和化妆培训三大板块，24H1 彩妆/护肤/化妆艺术培训及相关销售的营收占比分别为 55%/41%/4%。根据弗若斯特沙利文数据，2023 年主品牌 MAOGEPING 是中国市 场十五大高端美妆品牌中唯一的国货品牌，占高端美妆行业的市场份额为 1.8%。 2024 年 12 月，公司成功在港交所上市，所募资金主要用于渠道拓展、品牌建设等。 ➢ 中国彩妆行业增长潜力大，目前正处于重要的结构性增长拐点。1）根据欧睿数 据，护肤品类为化妆品市场核心，彩妆品类占比略低但增速更高，2009-2023 年护 肤/彩妆市场规模 CAGR 分别为 8.6%/11.5%，23 年护肤/彩妆分别占化妆品整体份 额的 51.4%/11.3%。我们认为国内目前正处于护肤意识已经基本普及，中国彩妆市 场面临着对化妆 ...

Company Overview - The company is a high-end domestic cosmetics brand founded by renowned makeup artist Mao Geping in 2000, positioning itself as a luxury brand with a complete product line including makeup, skincare, and makeup training [24][25] - As of 1H24, the company has 387 SKUs across two brands: MAOGEPING (luxury) and Zhi Ai Zhong Sheng (mass market) [25] - In 2023, the company ranked 9th in China's high-end makeup market with a 3.9% market share, making it the only domestic brand in the top 10 [24][25] Financial Performance - The company achieved strong revenue growth of 58% YoY in 2023, with net profit increasing by 88% YoY [31] - In 1H24, revenue and net profit both grew by 41% YoY, maintaining strong momentum [31] - Gross margin and net margin remained at industry-leading levels of 80%+ and 20%+ respectively, showing an upward trend since 2022 [31][33] - Online revenue CAGR reached 49% from 2021 to 2023, with online sales accounting for 49.1% of total revenue in 1H24 [43][174] Product Strategy Makeup Line - The makeup line is based on light and shadow aesthetics and oriental aesthetics, with a strong competitive advantage in base makeup products [44][53] - Key products include the Fish Roe Cushion and Water Cream Foundation, with the Fish Roe Cushion ranking top 3 in Tmall's concealer and highlighter categories from 2021 to 2024 [132][136] - The company has successfully expanded its market share in foundation products, with its Tmall foundation category ranking rising to 5th in 2024 [132] Skincare Line - The skincare line focuses on pre-makeup care and post-makeup repair, with 50 SKUs as of 1H24 [143] - The Fish Roe Mask has become a star product, generating retail sales of 600+ million yuan in 2023 and 450+ million yuan in 1H24 [157] - Skincare revenue grew 50% YoY in 2023 and 35% YoY in 1H24, accounting for 41% of total revenue [150] Channel Strategy Offline Channels - The company operates 372 self-owned counters in over 120 cities as of 1H24, ranking second among all beauty brands in China [161][163] - Offline channels maintain high customer loyalty, with member repurchase rates reaching 32.8% in 2023, significantly higher than the industry average [166] - Same-store sales grew 36% YoY in 2023 and 18% YoY in 1H24, driven by professional makeup services and customer experience [169] Online Channels - Online sales grew rapidly, with revenue increasing from 529 million yuan in 2021 to 1.18 billion yuan in 2023, representing a CAGR of 49% [174] - Douyin sales surpassed Tmall in 2023, reaching 1.19 billion yuan in 1-11M24, an 85% YoY increase [177][182] - The company has built a balanced live-streaming ecosystem, with brand self-broadcasting and KOL collaborations driving growth [183] Marketing Strategy - The company leverages Mao Geping's personal IP and professional makeup techniques to create viral marketing campaigns, such as the collaboration with fashion blogger "Late Night Teacher Xu" in 2019 [189] - The brand has established a strong presence on social media platforms, with 909k followers on Bilibili, 895k on Xiaohongshu, and 668.9k on Tmall flagship store [190] - The company emphasizes educational content, providing free makeup tutorials and professional makeup services to enhance customer experience and drive conversions [184] Industry Trends - The facial makeup market in China reached 31.2 billion yuan in 2023, accounting for over 50% of the total makeup market, with an expected CAGR of 8.4% from 2023 to 2028 [43][119] - Domestic brands are gaining market share in base makeup categories, with makeup artist IP brands like Mao Geping and Caitang showing strong growth [122][123] - The skincare market is shifting towards premiumization, with high-end products like the Fish Roe Mask meeting the demand for luxury skincare alternatives [157]

Investment Rating - The report assigns a "Buy" rating for the company, MAOGEPING [1]. Core Insights - MAOGEPING is a leading domestic high-end beauty brand with a strong financial performance, achieving a revenue of 2.89 billion yuan and a net profit of 660 million yuan in 2023, with a compound annual growth rate (CAGR) exceeding 35% over three years [4][21]. - The brand leverages the founder's reputation, experiential marketing, and high product quality to create a competitive moat, with over 80% of revenue coming from loyal members [4][30]. - The company is expected to maintain strong growth driven by product expansion and channel development, with projected net profits of 910 million yuan, 1.2 billion yuan, and 1.54 billion yuan from 2024 to 2026 [4][145]. Company Overview - MAOGEPING was established in 2000 and is known for its high-end positioning in the beauty market, focusing on both makeup and skincare products [4][10]. - The company has a concentrated ownership structure, with the founder and family holding a significant portion of shares, ensuring stable management [12][16]. Financial Analysis - The company has maintained a high gross margin of approximately 84.8% and a net profit margin of around 23% in 2023, reflecting its strong pricing power and operational efficiency [21][27]. - Revenue and net profit for the first half of 2024 are projected to grow by 41% year-on-year, indicating robust growth momentum [21][145]. Business Analysis - The product mix is heavily weighted towards makeup, with skincare products increasing to 40% of total revenue in 2023, showcasing a successful diversification strategy [30][31]. - The company has a dual-channel strategy, with both offline counters and online sales contributing to its growth, and online sales are expected to continue rising [49][51]. Growth Drivers - The company plans to expand its offline presence by opening approximately 30 new counters annually, while also enhancing its online penetration through platforms like Tmall and Douyin [4][120]. - MAOGEPING aims to introduce new products across various categories, including color cosmetics and skincare, to capture a larger market share [4][137]. Market Analysis - The beauty industry, particularly the makeup segment, is experiencing high growth potential, with domestic brands gaining market share against international competitors [70][80]. - The report highlights the increasing consumer demand for high-end beauty products, driven by changing consumer preferences and a growing middle class [70][78]. Membership and Loyalty - The company has implemented a tiered membership system that enhances customer loyalty, with high repurchase rates among premium members [108][116]. - The loyalty program has contributed significantly to revenue, with premium members accounting for over 80% of total sales [4][116]. Future Outlook - MAOGEPING is exploring international expansion opportunities, aiming to establish a presence in overseas markets while maintaining its high-end brand image [140][141]. - The company is also focusing on product innovation and marketing strategies to enhance brand visibility and consumer engagement [4][137].