Group 1 - The new richest individuals in Shaanxi are Fan Daidi and her husband Yan Jianya, who are associated with two listed companies: Juzhi Biotechnology and Triangle Defense [1][7] - Juzhi Biotechnology, founded in 2000, focuses on high-tech products in skincare, medical devices, and functional foods, and went public in November 2022 with a market capitalization of approximately 857 billion HKD (about 790 billion RMB) as of May 13 [1][2] - Triangle Defense, established in 2002, specializes in the production and sales of special alloy forgings for the aerospace and maritime industries, with a market capitalization of 14.3 billion RMB [1][7] Group 2 - Juzhi Biotechnology's financial performance shows significant growth, with projected revenues of 5.539 billion RMB and net profits of 2.062 billion RMB by December 31, 2024, maintaining a profit margin of 45%-50% [4] - The stock price of Juzhi Biotechnology has increased from an opening price of 25.03 RMB at its IPO to a recent high of 83 RMB, with the founders continuing to increase their holdings to 55.03% [2][4] - Yan Jianya and Fan Daidi ranked 196th on the 2024 Hurun Rich List with a net worth of 24.5 billion RMB, previously ranking third among the wealthy in Shaanxi [7]

Group 1 - The core viewpoint of the article highlights the rise of Fan Daidi and her husband Yan Jianya as the new richest individuals in Shaanxi, with a combined stock value of 457 billion yuan from their holdings in Juzi Biotechnology and Triangle Defense [1][2] - Juzi Biotechnology, which specializes in recombinant collagen, has a market capitalization of 836 million HKD (approximately 773 million yuan) as of May 12, while Triangle Defense, a military enterprise, has a market capitalization of 147 million yuan [1][2] - According to the 2024 Hurun Rich List, the couple ranks 196th nationally with a wealth of 245 million yuan, placing them third among the wealthy in Shaanxi [1] Group 2 - Fan Daidi, born in January 1966, has a background in biological engineering and has held various academic positions at Northwest University, including Vice President [2] - In 2000, she developed a type of human-like collagen using genetic engineering technology, and in 2001, she applied for China's first patent for recombinant collagen [2] - Since 2019, Juzi Biotechnology has become the largest collagen professional skincare product company in China and one of the largest globally in terms of recombinant collagen production capacity [2] - In the latest annual report, Juzi Biotechnology reported a revenue of 5.539 billion yuan, a year-on-year increase of 57.2%, and a net profit of 2.062 billion yuan, up 42.1%, with a gross margin of 82.09% [2]

Core Insights - The performance of domestic beauty companies in China is showing significant divergence, with some achieving remarkable growth while others face declines, indicating a reshaping of the market landscape [1][4][42] Group 1: Company Performance - Proya has become the first domestic beauty company to enter the 10 billion yuan club, with a revenue of 10.778 billion yuan, growing by 21.04% [2] - Other companies like Shangmei and Juzi Biological also reported substantial revenue increases of 62.08% and 57.17% respectively, while Shanghai Jahwa experienced a revenue decline of 13.93% [2][3] - Six beauty companies have revenues exceeding 5 billion yuan, suggesting that this threshold will soon become a significant benchmark for the top 10 domestic beauty brands [1] Group 2: Profitability Trends - Juzi Biological leads in profitability with a profit of 2.062 billion yuan, up 42.06%, while Proya's profit reached 1.552 billion yuan, growing by 30% [3] - In contrast, Shanghai Jahwa reported a loss of 833 million yuan, marking a 266.60% decline, highlighting the stark differences in profitability among companies [3][11] Group 3: Market Dynamics - The current market dynamics indicate a shift towards efficacy-driven products, with companies that successfully launched standout products seeing better performance [4][5] - The competition is intensifying, with new entrants emerging and established brands needing to adapt to changing consumer preferences and market trends [7][30] Group 4: R&D and Strategic Focus - Companies are increasingly focusing on R&D, with most reporting a rise in R&D expenditures, indicating a strategic shift towards innovation and efficacy [20][21] - The trend of acquisitions and investments in technology is becoming a key strategy for companies aiming to enhance market share and scale [23][24] Group 5: Emerging Opportunities - The male skincare market is growing rapidly, presenting new opportunities for brands to capture this segment [36] - The aging population is creating demand for products targeting older consumers, which remains largely untapped [39] - As online sales plateau, brands are shifting focus to offline channels, indicating a potential new battleground for market share [40]

Investment Rating - The investment rating for Giant Biogene Holding Co Ltd is Overweight [6] Core Insights - The report highlights that Giant Biogene (GB) has seen limited positive impact on its P&L from supportive policies and subsidies from online platforms, as some platforms refocus on leading brands over white labels [2] - GB has expanded its product offerings to Hong Kong and Southeast Asia, utilizing social media for branding and adjusting product sizes to match local purchasing power [3] - The Mi Xiu series targets premium customers with an average selling price (ASP) of Rmb500-800, with plans for further expansion into medical aesthetics and online channels [4] - The Collagen Stick 2.0 has received encouraging sales feedback and is a key product for upcoming promotions, with expectations for improved gross profit margins [9] - The company plans to use US$300 million from share issuance primarily for overseas expansion and potential mergers and acquisitions in cosmetics, medical aesthetics, and healthcare [9] Financial Metrics - The price target for Giant Biogene is set at HK$85.00, representing a 7% upside from the current price of HK$79.20 [6] - Projected revenue growth shows an increase from Rmb5,539 million in 2024 to Rmb10,523 million by 2027, with EBITDA expected to rise from Rmb2,502 million to Rmb4,507 million in the same period [6] - The estimated EPS is projected to grow from Rmb2.06 in 2024 to Rmb3.67 in 2027, indicating a strong growth trajectory [6]

Investment Rating - The report maintains a "Buy" rating for Giant Biogene and Shanghai Jahwa, reflecting their potential for growth and turnaround [11][26]. Core Insights - The China beauty sector is showing signs of stabilization, with demand shifting from negative year-over-year (yoy) growth to a flat performance, particularly noted during Women's Day [1]. - Onshore sales growth in 1Q25 re-accelerated to 3.2% yoy, surpassing the full-year estimate of 1.2% yoy, although this was countered by a decline in the DFS channel [1]. - The sector has experienced a 50% rerating, with the 12-month price-to-earnings (PE) ratio moving from 20x to 30x, indicating a recovery towards mid-cycle valuation levels [1][7]. Summary by Sections Sales Performance - The covered companies in the China cosmetics sector reported mixed results for 2024/1Q25, with most missing sales expectations except for Giant Biogene, which outperformed due to effective cost management [2][25]. - The average selling expenses ratio decreased by 6.8 percentage points yoy in 4Q24 and 3.7 percentage points yoy in 1Q25, indicating improved cost discipline across the sector [2][25]. Competitive Landscape - Local brands are gaining market share, with emerging leaders like Giant Biogene, Marubi, and Chicmax achieving over 30% sales growth, while global brands are pulling back on promotions to focus on quality growth [3][13]. - The premium segment remains largely dominated by global brands, but local brands are expected to capture more market share over the next 5-10 years [6]. Valuation Trends - The beauty sector's valuation has rebounded to around 30x PE, reflecting a recovery from downcycle lows and aligning more closely with global peers [7][8]. - Limited valuation upside is anticipated as the sector stabilizes at mid-cycle levels, with potential idiosyncratic rerating drivers emerging from new product categories and brand expansions [8]. Catalysts for Growth - Key upcoming events include the 618 shopping festival and increased activity in the medical aesthetics space, which could provide growth opportunities for companies like Giant Biogene [9][10]. - The report highlights the importance of effective execution and brand expansion as critical factors for sustained growth in the sector [8][11]. Stock Preferences - The report favors emerging leaders such as Giant Biogene and Shanghai Jahwa, while maintaining a neutral stance on MGP, Proya, and Botanee due to concerns over growth visibility and execution [11][26]. - A sell rating is assigned to Bloomage, reflecting challenges in revitalizing its cosmetics business amid intensified competition [11][26].

Core Insights - The domestic beauty industry in China is expected to undergo a significant restructuring by 2025, with companies showing rapid growth driven by strong single-brand performance and a shift in consumer focus towards verified efficacy rather than just ingredient composition [2][10] Revenue Performance - Proya has become the first domestic beauty company to surpass 10 billion yuan in revenue for 2024, achieving 10.779 billion yuan, maintaining its top position [4] - Shangmei Co. has shown the fastest revenue growth, with a 62.1% increase from 4.191 billion yuan in 2023 to 6.793 billion yuan in 2024, rising from sixth to second place among the sample companies [3][4] - Other notable companies include Betaini with 5.736 billion yuan, Shanghai Jahwa with 5.679 billion yuan, and Juzhibio with 5.54 billion yuan, all showing varying degrees of growth [4] Brand Performance - Shangmei's brand Han Shu generated nearly 5.6 billion yuan in 2024, accounting for 82.3% of the group's total revenue, with a growth rate of 73.7% [5] - Juzhibio's brand Kefu Mei achieved 4.54 billion yuan in revenue, representing 82% of its total revenue, with a growth rate of 62.9% [6] Market Trends - The popularity of hyaluronic acid is declining, while "recombinant collagen" is emerging as a lucrative ingredient, reflecting a shift in consumer preferences towards efficacy-driven skincare [7][9] - The market is witnessing a transition from ingredient-focused to efficacy-focused products, with companies like Proya leveraging this trend to capture market share [10][11] R&D and Investment - There is a growing disparity between revenue growth and R&D investment among companies, with Proya's R&D expenditure at only 1.95% of total revenue, the lowest among the sample companies [12] - In contrast, Juzhibio, despite its rapid revenue growth, has a low R&D investment ratio of 1.9%, indicating a potential risk in long-term sustainability [12] Industry Dynamics - The beauty industry is moving towards a phase where product efficacy and R&D capabilities are becoming critical competitive factors, as opposed to relying solely on marketing [13] - The gap in revenue between leading and mid-tier companies is widening, suggesting a trend towards market consolidation and structural transformation within the industry [13]

Core Points - The Shanghai Composite Index decreased by 0.30%, while the China Securities Hong Kong Mid-Cap Select Index increased by 0.38%, closing at 2305.91 points with a trading volume of 16.681 billion yuan [1] - The China Securities Hong Kong Mid-Cap Select Index has seen a rise of 10.27% over the past month, 5.76% over the past three months, and 7.80% year-to-date [1] - The index consists of 100 medium-sized securities selected from the Hong Kong market, reflecting the overall performance of medium-sized securities listed on the Hong Kong Stock Exchange [1] Index Holdings - The top ten weighted stocks in the China Securities Hong Kong Mid-Cap Select Index are: Pop Mart (6.77%), China Telecom (3.42%), CITIC Bank (2.87%), China Pacific Insurance (2.72%), CanSino Biologics (2.66%), China Tower (2.37%), Kingdee International (2.09%), Genscript Biotech (1.82%), CITIC Securities (1.79%), and Bilibili-W (1.76%) [1] - The index's holdings are entirely composed of stocks listed on the Hong Kong Stock Exchange, with a 100% allocation [1] Industry Breakdown - The industry composition of the index sample includes: Consumer Discretionary (19.26%), Industrials (12.52%), Financials (11.84%), Information Technology (9.83%), Communication Services (9.25%), Healthcare (8.72%), Consumer Staples (7.59%), Utilities (7.41%), Materials (5.29%), Real Estate (5.04%), and Energy (3.25%) [2] - The index sample is adjusted semi-annually, with adjustments occurring on the next trading day after the second Friday of June and December [2] - A buffer zone is established for sample adjustments, prioritizing the retention of older samples ranked between 81 and 220, with specific procedures for handling delistings, mergers, and other corporate actions [2]

Core Viewpoint - The article discusses the rise of Fan Daidi and her husband Yan Jianya as the new richest couple in Shaanxi, primarily due to their holdings in Juzi Biological and Triangle Defense, with a combined market value of nearly 900 billion yuan [2][9]. Group 1: Personal Background and Wealth - Fan Daidi holds a stock value of 443 billion yuan and has recently become the richest person in Shaanxi [2][5]. - The couple's daughter, Yan Yubo, has been rigorously trained and holds multiple financial certifications, currently serving as the secretary and executive director of Juzi Biological, with a salary increase from 140,000 yuan in 2023 to 360,000 yuan in 2024 [3][16]. Group 2: Company Overview - Juzi Biological - Juzi Biological, a leader in the field of recombinant collagen, has seen its revenue grow from 9 billion yuan in 2019 to 55 billion yuan in 2024, marking a fivefold increase over five years [18]. - The company has a projected revenue of 45.4 billion yuan in 2024, with a year-on-year growth of 62.9%, and a gross margin of 82% [17][21]. - Juzi Biological has raised a total of 45.6 billion yuan through various financing rounds since its IPO in 2022, while distributing 2.3 billion yuan in dividends to the Fan family [25] [24]. Group 3: Company Overview - Triangle Defense - Triangle Defense, which specializes in aerospace and military components, has a market value exceeding 100 billion yuan, with Yan Jianya controlling 16.09% of the shares [26][27]. - The company has experienced significant revenue growth from 4.7 billion yuan in 2018 to 24.9 billion yuan in 2023, but has faced a decline in 2024 due to reduced orders from major clients [28]. - Triangle Defense is currently under regulatory scrutiny for various management issues, which could impact its future performance [28].

Summary of the Conference Call Records Industry Overview - The beauty and personal care industry is experiencing an increase in penetration rates and rising prices, showing stronger growth compared to traditional food and beverage sectors, leading new consumption trends [1][7] - Domestic brands are rapidly rising in the beauty and personal care market, replacing foreign brands, particularly Japanese and Korean brands, which are showing significant declines [1][3] Key Financial Performance - **Personal Care Segment**: - 2024 revenue growth of 19% and net profit growth of 25% - Q1 2025 revenue growth of 29% and profit growth of 13%, driven by product innovation and Douyin channel [1][6] - **Medical Aesthetics Segment**: - 2024 revenue growth of 16% and net profit growth of 22% - Q1 2025 revenue and profit remained flat, with significant internal differentiation [1][9] - **Cosmetics Industry**: - 2024 revenue growth of 11% and net profit decline of 9% (11% growth after excluding anomalies) - Some companies like Juzhi Biotechnology and Mao Ge Ping performed exceptionally well [1][10] Channel Performance - Douyin channel is noted for its dual role in marketing and sales, with high initial costs but potential for improved profitability as brand influence expands to other channels [4][8] - In April 2025, beauty brands on Douyin showed strong performance, with several brands achieving over 100% growth [11] Company-Specific Insights - **Ruo Yuchen**: - Q1 2025 revenue and profit growth exceeded 200% for its free brand and over 150% for its household cleaning brand [12] - **Deng Kang Oral Care**: - Q1 2025 revenue and profit growth of 15%-20%, with online channels showing over 200% growth [14] - **Polaire**: - Q1 2025 saw unexpected profit growth due to improved gross margins and optimized sales expenses [16] - **Mao Ge Ping**: - April 2025 Douyin channel growth of over 30% [17] - **Perfect Bio**: - Q1 2025 revenue growth of 28% and net profit close to 30% [18] - **Runben**: - Q1 2025 revenue growth of 44%, with a focus on new product launches [19] Market Trends and Investment Recommendations - The beauty and personal care sector is expected to continue leading new consumption trends, with investment strategies focusing on companies with strong innovation capabilities and those showing positive changes [1][7][26] - Recommended stocks include Ruo Yuchen, Deng Kang Oral Care, and Runben in the personal care segment, and high-end domestic brands like Mao Ge Ping and companies in the collagen segment like Juzhi Biotechnology [26] Additional Insights - The beauty and personal care sector is more sensitive to product demand, innovation, and channel changes compared to other consumer goods, providing a natural premium and innovation potential [24] - The overall market for personal care, beauty, and medical aesthetics is expected to show strong growth, driven by product innovation and structural opportunities [25]

Group 1 - The beauty industry in China is witnessing a shift in the top 10 revenue rankings, with Proya leading at 10.778 billion, marking a significant milestone as the first domestic beauty brand to surpass 10 billion in revenue [1][8] - The entry of Mao Geping into the top 5 and the drop of Shanghai Jahwa from the top 10 indicates a dynamic change in the competitive landscape [1][3] - The revenue threshold for entering the top 10 has increased to nearly 2.5 billion, reflecting a more competitive environment compared to previous years [1] Group 2 - The top five companies have experienced a turnover, with companies like Shiseido and Juzhibio showing over 30% growth, while others like Huaxi and Beitaini have faced declines or stagnant profits [3] - Proya's main brand revenue ceiling has been raised to 8.581 billion, with a notable gap of nearly 3 billion between it and the next highest brand [8] - Han Shu has achieved a significant milestone by surpassing 5 billion in revenue, reaching 5.591 billion with an impressive growth rate of 80.9% [8] Group 3 - Online sales channels are crucial for the success of domestic beauty brands, with Proya, Shiseido, and Water Sheep achieving over 90% of their revenue from online sales [14] - Despite the strong online performance, the offline sales channels have seen a decline, with companies like Mao Geping and Shiseido managing to achieve double-digit growth in offline sales [15][14] - The overall sales structure indicates a need for brands to balance their online and offline strategies to sustain growth [11] Group 4 - Research and development (R&D) investments among the top 10 companies have increased, with total R&D spending rising from 1.559 billion to 1.753 billion [19] - Companies like Huaxi and Beitaini are leading in R&D expenditures, with Huaxi investing 466 million, representing 8.68% of its total revenue [19][20] - The competitive landscape is evolving, with an emphasis on scientific innovation and new product development becoming essential for maintaining market position [21][22] Group 5 - The beauty industry is expected to face challenges in 2024, with increased competition and a more complex market environment [21] - The competitive dynamics are shifting, as companies like Shiseido leverage innovative marketing strategies to secure their positions [22] - The future of the industry will require continuous evolution and adaptation from all players to remain relevant and competitive [23]