Core Viewpoint - The hair care market is experiencing significant growth, with online transaction value reaching 340.37 billion yuan in the first half of 2025, marking a year-on-year increase of 20.67% [4][5]. Market Performance - The hair care segment outperformed other beauty categories, driven by a 131.5% surge in men's hair care and steady performances from international brands like Kérastase, L'Oréal, and Pantene [2][4]. - The overall beauty market saw a total online transaction value of 3,060.39 billion yuan, with hair care being one of the fastest-growing segments [5]. Segment Breakdown - The hair care subcategories showed robust growth: - Hair cleansing: 179.72 billion yuan, up 21.56% - Hair care: 74.00 billion yuan, up 19.59% - Hair dyeing and perming: 57.44 billion yuan, up 17.20% - Hair styling: 20.76 billion yuan, up 16.64% - Men's hair care: 5.12 billion yuan, up 131.50% [7]. Brand Landscape - The market share of the top five brands (CR5) decreased from 19% in 2024 to 16%, indicating increased competition from emerging domestic brands and private labels [8]. - New domestic brands like Off&Relax and others are gaining traction, with several entering the top 20 rankings [11]. Consumer Trends - There is a shift towards efficacy-driven products, with consumers seeking solutions for specific scalp issues and multi-functional products [14][19]. - The introduction of "face-care level" ingredients in hair care products is becoming a trend, enhancing the overall consumer experience [19][21]. Innovation and New Products - Over 25 brands launched new products in the first half of 2025, with a focus on scalp care and multi-functional benefits [13]. - Brands are emphasizing rapid effectiveness, with products claiming visible results in as little as one to three minutes [17]. Future Outlook - The competition in the hair care market is expected to intensify, particularly in the areas of anti-hair loss and scalp care, with a focus on patented technologies and quick results [26][29]. - The potential for growth in differentiated segments like scalp oils is significant, as brands explore new opportunities [23][26].

Core Points - The founder of Han Shu, Lü Yixiong, publicly opposed overtime work, leading to employee skepticism about whether actual workloads would decrease [2][4] - The parent company, Shangmei Co., has set a target of 10 billion yuan by 2025, requiring Han Shu to maintain a growth rate of 50%, but its Douyin repurchase rate has dropped from 24% to 18% [1][3] - Shangmei Co. faces a "growth curse" with a marketing expense of 3.9 billion yuan, raising concerns about the sustainability of its reliance on the "racehorse mechanism" and marketing strategies as traffic dividends fade [1][20] Group 1: Internal Challenges - Lü Yixiong's anti-overtime stance has sparked controversy, with employees reporting that workloads remain high despite the ban on overtime [4][6] - Employees describe a "racehorse mechanism" that pressures teams to produce similar content, leading to a high-stress environment [4][8] - The cancellation of meal allowances and transportation reimbursements has further exacerbated employee dissatisfaction, as they now bear additional costs without a reduction in workload [6][7] Group 2: Marketing and Financial Performance - Han Shu's marketing strategy has historically been aggressive, with significant investments leading to high visibility but also high costs [20][21] - In 2024, Shangmei Co. reported revenue of 6.793 billion yuan, a year-on-year increase of 62.1%, but profit growth is slowing [16][21] - The marketing expenses for Shangmei Co. reached 3.9 billion yuan, accounting for 60% of total revenue, while R&D investment remains low at 2.6% [21][23] Group 3: Future Outlook - The company aims for a revenue target of 10 billion yuan by 2025, but achieving this will require Han Shu to sustain a 50% growth rate amidst rising marketing costs and channel imbalances [23][24] - The competitive landscape in the beauty market is intensifying, and the effectiveness of Lü Yixiong's anti-involution initiative remains to be seen [24]

Core Viewpoint - The competition in the cosmetics industry is shifting from "traffic competition" to "technology competition" [3] Group 1: Industry Changes - In the first half of 2025, there will be at least 30 significant personnel changes among leading domestic and international cosmetics companies [4] - International giants are re-employing technical talents and introducing cross-industry talents to strengthen industry barriers, while local companies are restructuring organizational efficiency by leveraging foreign technical experts amidst talent loss [5][6] Group 2: Personnel Restructuring - The phenomenon of management turnover among domestic leading beauty companies is intensifying, with several core positions currently vacant or temporarily filled [8] - Companies like Proya and Shanghai Jahwa have vacant positions for vice presidents [9] Group 3: Talent Acquisition - Proya is actively bringing in foreign technical talents, with its new Chief Scientific Officer having 27 years of experience at Procter & Gamble [13] - Some companies are promoting internal talents to strengthen organizational resilience, such as Huaxi Biological promoting its global supply chain platform executive director and financial director to vice president [15] Group 4: Leadership and Innovation - International beauty giants are promoting technical talents to integrate deeply into brand operations, while also introducing cross-industry talents to stimulate innovation [17] - L'Oréal's recent appointments of executives with R&D backgrounds signify a shift towards "technology defining brands" [18][19] Group 5: Market Dynamics - The demand for cosmetics is shifting from emotional premium to functional essence, compelling companies to build core competitiveness through R&D breakthroughs and technological barriers [22] - The emphasis on technical talents is reshaping the competitive rules of the industry, moving away from reliance on traffic dividends and marketing concepts [22][23] Group 6: Future Outlook - Companies that master core technologies and technical talents will continue to lead, while brands lacking a technical foundation may struggle to survive [23]

Group 1 - The new consumption concept stocks in the Hong Kong market experienced a decline, with companies such as Shangmei Holdings (02145.HK) and Pop Mart (09992.HK) both dropping nearly 3.5% [1] - Other companies like Mixue Group (02097.HK) and Guming (01364.HK) saw declines exceeding 3%, while Nayuki's Tea (02150.HK) fell by 2.5% [1] - Additional declines were noted for Cha Baidao (02555.HK), NIO (09866.HK), Laopu Gold (06181.HK), and Xiaomi Group (01810.HK), all of which dropped over 1.5% [1]

Core Viewpoint - The short drama format is rapidly becoming a significant trend in the entertainment industry, with its market size projected to exceed 50.4 billion by 2024, surpassing traditional film box office revenues. Predictions suggest it could reach a trillion-dollar market by 2027 [2][3]. Group 1: Market Dynamics - The number of short dramas has surged from 336 in 2022 to over 36,400 by 2024, indicating a massive increase in content supply [2]. - Brand-customized short dramas are becoming a popular marketing tool, with 153 new brand short dramas launched in just the first four months of 2025 [2]. - Brands are increasingly investing in short dramas across various sectors, including beauty, food, e-commerce, and finance, with nearly half of the brands entering the market for the first time [2][3]. Group 2: Case Study - Han Shu - Han Shu's turnaround story highlights the effectiveness of short dramas, with sales skyrocketing from 10 million to over 400 million after the release of a single short drama [4][7]. - The brand's total transaction amount reached 3.34 billion in 2023, making it the top beauty brand on Douyin, a significant leap from its previous ranking [7]. - The success of Han Shu's short dramas is attributed to their ability to reshape brand image and create emotional connections with viewers, leading to increased sales [8][9]. Group 3: Industry Trends and Challenges - The influx of brands into the short drama space has led to increased competition and rising production costs, with some reports indicating costs have risen from 700,000 to over 2 million by 2025 [21][22]. - The effectiveness of short dramas is declining due to content homogenization and poor storytelling, with many brands struggling to differentiate themselves [26][30]. - Brands are facing dual pressures of rising costs and decreasing conversion rates, leading to concerns about the sustainability of this marketing strategy [21][24]. Group 4: Future Directions - Industry experts suggest that the key to successful brand short dramas lies in high-quality content and natural product integration, rather than merely relying on star power [29][30]. - Brands should focus on storytelling to create a unique brand identity, as seen in successful cases like Starbucks and Jiuzhou Sanitary Ware, which effectively used short dramas to enhance brand perception [31][32]. - Not all brands are suited for short drama marketing; those without e-commerce attributes may struggle to see conversion benefits [33].

Group 1 - MISTINE collaborates with the popular game "Light and Night of Love" to launch new products including sunscreen and cushion foundation, featuring game-themed designs to attract young consumers [2] - Face Gym, a UK skincare brand, receives investment from Reliance Industries, led by Mukesh Ambani, indicating interest in the international beauty market and providing strong financial support for global expansion [3] - Upm's brand Han Shu wins the Rongge Technology Innovation Award for its "X Peptide Cream" and has filed a patent for a hair loss prevention composition, showcasing innovation in the personal care sector [5] Group 2 - Henkel appoints Rajat Agarwal as North America President, effective July 1, 2025, to drive growth in the personal care business, strengthening the connection between packaging strategy and product portfolio [6] - Changzhou Baijiji Biopharmaceutical Co., Ltd. responds to IPO review and forecasts its functional skincare business to achieve breakeven by Q4 2027, with projected revenues of 73.14 million, 88.58 million, and 108.96 million over the next three years [7] - HBN collaborates with Pantone to define "Oriental Native White," creating four color cards and scientifically analyzing its texture, enhancing brand visibility in the color trend space [8]

Investment Rating - The report rates the cosmetics and medical beauty industry as "Positive" [2][3] Core Viewpoints - The cosmetics retail sales growth for January to May 2025 is 4.1%, an increase of 2 percentage points compared to the same period last year, indicating a steady recovery in demand [3] - The performance of leading brands remains strong, with double-digit growth, supported by the theme of self-care in new consumption trends, leading to a positive outlook for the first half of 2025 [3] - The 618 shopping festival saw strong performances from domestic brands, with notable rankings on platforms like Tmall and Douyin [3] Summary by Sections Cosmetics Industry Outlook - The report anticipates significant revenue and net profit growth for major companies in Q2 and H1 2025, with specific forecasts: - Up Beauty Co. is expected to see a revenue increase of 16% and a net profit increase of 25% [3] - Marubi is projected to grow revenue by 22% and net profit by 28% in Q2 2025 [3] - Proya is expected to achieve a revenue growth of 10% and net profit growth of 15% in Q2 2025 [3] Key Companies Performance - Notable companies and their expected performance include: - Mao Geping is projected to have a revenue increase of 38% and net profit increase of 35% in H1 2025 [3] - Ruibin is expected to see a revenue increase of 15% and net profit increase of 15% in Q2 2025 [3] - Huaxi Biological is expected to maintain stable performance with a 0% revenue growth and a 10% net profit increase in Q2 2025 [3] Investment Recommendations - The report recommends focusing on companies with strong brand matrices and comprehensive product layouts, such as Up Beauty Co., Marubi, and Proya, which are expected to benefit from the live e-commerce traffic [3] - It also highlights the importance of niche market players like Ruibin and Mao Geping, who are positioned to capitalize on the rise of personal care and domestic beauty trends [3] - For the medical beauty sector, the report suggests focusing on companies with high R&D barriers and strong profitability, recommending companies like Aimeike and Langzi [3] E-commerce and Other Segments - The report suggests monitoring e-commerce companies like Ruibin, which is expected to see significant growth in revenue and net profit [3] - In the maternal and infant sector, Kid King is projected to exceed market expectations with a revenue increase of 10% and a net profit increase of 70% in Q2 2025 [3]

Group 1: Gold and Jewelry - In H1 2025, gold prices surged, leading to a decline in gold jewelry consumption while investment gold consumption increased, continuing the trend from 2024 [13][17] - The report anticipates that in H2 2025, gold prices may fluctuate at high levels due to geopolitical conflicts and economic downturns, with central banks continuing to purchase gold [23] - Recommended companies include Laopuhuang, Chow Tai Fook, Chao Hong Ji, and Cai Bai Co., which are expected to benefit from the ongoing trends in gold consumption [23][24][26][30] Group 2: Cosmetics - The cosmetics market showed weak performance in H1 2025, with a cumulative year-on-year growth of 4.1% from January to May, lagging behind overall retail growth [32][35] - Long-term trends in the cosmetics industry remain focused on increasing penetration rates and domestic brand substitution, with a recommendation to focus on brands like Mao Ge Ping and Shangmei Co. for their strong performance and growth potential [35][36][42] - Mao Ge Ping is highlighted for its high-end positioning and significant growth in both online and offline channels, while Shangmei Co. has shown impressive performance during promotional events [36][42] Group 3: Personal Care - The personal care sector, particularly in sanitary napkins and oral care, is expected to maintain stable demand, with domestic brands leading the market [49][51] - The oral care segment is experiencing a shift towards higher-value products driven by consumer demand for efficacy, with domestic brands like Deng Kang Oral Care gaining market share [53][54] - Key companies to watch include Baiya Co. and Deng Kang Oral Care, which are well-positioned to capitalize on these trends [49][53] Group 4: Apparel and Footwear - The apparel retail sector showed moderate growth in H1 2025, with a year-on-year increase of 3.3% in retail sales from January to May [8][14] - Outdoor brands are performing exceptionally well, with high-end outdoor brands like Amer Sports and Anta showing significant revenue growth [8][15] - Recommended companies include Anta Sports for its strong outdoor brand growth and Mercury Home Textiles for its effective marketing strategies [15][16] Group 5: Textile Manufacturing - The textile manufacturing sector is witnessing a shift in export share towards Southeast Asia, with a notable decline in imports from China to the U.S. [8][18] - The report indicates that U.S. apparel imports from Southeast Asia are increasing, while imports from China are decreasing, suggesting a strategic shift in manufacturing locations [18][19] - Companies with diversified production capabilities across regions are recommended for investment consideration [18][19] Group 6: Home Furnishings - The home furnishings market is experiencing growth driven by government policies encouraging upgrades, with furniture retail sales in May 2025 showing a year-on-year increase of 25.6% [8][20] - Key players in the home furnishings sector include Gujia Home and Oppein Home, which are expected to benefit from the ongoing market trends [20][21]

Core Insights - The strategic vision of Up Beauty Co., led by CEO Lv Yixiong, emphasizes long-term focus and multi-brand matrix, which is increasingly evident in the cosmetics industry development in the first half of 2025 [1] - Up Beauty Co. leverages a "single focus, multi-brand, globalization" approach to navigate challenges in the global beauty market, achieving record sales during the 618 shopping festival [1] Group 1: Main Brand Performance - The main brand, Han Shu, has maintained a leading position in the competitive beauty market, ranking as the top beauty brand on Douyin for two consecutive years [2] - During the 618 period, Han Shu achieved significant sales growth across major platforms, with Tmall sales increasing by over 46% and Douyin sales reaching top rankings in multiple categories [2][7] - The Han Shu X Peptide series achieved over 100 million in sales during the 618 event, showcasing the brand's strong research and innovation capabilities [4] Group 2: New Brand Growth - Newpage, a brand focused on infant skincare, reported a revenue of 376 million yuan in 2024, marking a year-on-year growth of 146.3% [11] - During the 618 shopping festival, Newpage saw triple-digit growth across major e-commerce platforms, with Tmall sales increasing by 106% within the first 3.5 hours [11] - The brand's "medical-research co-creation" model has proven effective, leading to significant sales of its star product, the infant soothing cream [12] Group 3: Emerging Brand Success - Anminyou, a brand targeting sensitive skin, experienced a sales increase of over 65% during the 618 period, with notable growth across various platforms [21] - The brand's star product, Qinghao Soothing Essence, ranked second on Douyin's anti-wrinkle essence list during the 618 event, indicating strong market presence [26] Group 4: Strategic Development and Innovation - Up Beauty Co. aims to reach a target of 30 billion yuan by 2030, focusing on a multi-brand and multi-category business model [27] - The company has invested in AI-driven smart factories, enhancing production capacity and efficiency, with a daily output of 2 million bottles [27] - Up Beauty Co. has established a robust research and development framework, including a scientific committee of over 300 researchers, to drive innovation and product development [29]

Summary of Shangmei Co., Ltd. Conference Call Company Overview - Shangmei Co., Ltd. operates in the beauty and personal care industry, focusing on multiple segments including mass skincare, premium skincare, personal care, medical beauty, maternal and infant care, and cosmetics [2][3][4]. Key Points and Arguments Multi-Brand Strategy - The company employs a multi-brand matrix strategy to cater to diverse consumer needs, enhancing profitability and sustainable growth [2][5]. - The Han Shu brand targets the mass market and has achieved rapid growth through category expansion and channel diversification, particularly on e-commerce platforms like Douyin [2][4]. Sales Performance - During the 2025 618 shopping festival, the cosmetics series sales exceeded 100 million RMB, marking a new growth point for the company [2][3]. - The high-end infant care brand New Page is projected to reach sales of 800-1,000 million RMB by 2025, while the anti-hair loss brand Ji Fang quickly became the top seller on Douyin [2][6]. Future Growth Strategy - The company aims to achieve a sales target of 30 billion RMB by 2030 through its "Six Six Strategy," which focuses on strengthening the Han Shu brand and expanding into men's care and other areas [2][7]. - Anticipated growth in the second half of 2025 is expected to outperform the first half due to new channels, teams, product categories, and emerging brands [2][8]. Financial Metrics - Shangmei Co., Ltd. reports a profit margin exceeding 10%, a gross margin above 70%, and a return on equity (ROE) of over 30% [4][16]. Market Dynamics - The beauty and personal care market is valued at 700 billion RMB, with diverse consumer demands across various price segments [4][11]. - Despite intense competition, the industry continues to innovate, creating new demand and structural opportunities for domestic brands [12][40]. Brand Positioning - The Han Shu brand is positioned as a mass-market beauty brand with a broad product range, not reliant on specific channels or consumer perceptions, allowing for significant growth potential [17][18]. Product Development - The company has successfully launched several new products, including men's skincare and various beauty items, which have shown strong market acceptance [3][6][29]. Talent and Organizational Structure - Shangmei Co., Ltd. emphasizes talent acquisition and organizational efficiency to support its multi-brand strategy and enhance its competitive edge in the market [32][35]. Additional Important Insights - The company is expanding its presence on various e-commerce platforms, achieving significant growth rates on platforms like Taobao and JD.com [26]. - The competitive landscape shows that while foreign brands dominate certain segments, domestic brands like Han Shu are gaining market share due to their flexibility and value propositions [25][40]. - The anticipated launch of new brands in the second half of 2025, including a children's care brand and a makeup artist brand, is expected to further enhance market penetration [37][38]. This comprehensive overview highlights Shangmei Co., Ltd.'s strategic initiatives, market positioning, and growth prospects within the beauty and personal care industry.