Core Insights - The beauty industry is undergoing a technological transformation, with the integration of medical research driving value upgrades in cosmetics. This dual integration of medicine and beauty is defining a new competitive logic in the industry [3][6][24]. Industry Trends - The 20th China Dermatology Association (CDA) conference showcased over 10,000 dermatologists and more than 100 companies, including both domestic and international beauty brands, highlighting the industry's focus on scientific collaboration [3][4]. - The concept of "medical-research co-creation" emerged as a key theme, with brands actively participating in discussions on how to contribute to the skin science system, moving from mere users of research to active participants in scientific understanding and industry standards [7][24]. Brand Innovations - Winona, a brand known for its scientific foundation, showcased its "NUTE" principle at CDA 2025, which emphasizes clinical needs, unique mechanisms, technology empowerment, and credible evidence in product development [10]. - HBN, a domestic skincare brand, initiated the establishment of a group standard for "Cosmetic Efficacy Evidence Weight Assessment Guidelines," aiming to shift the industry from experience-driven to evidence-based competition [11][13]. - Estee Lauder's Clinique presented a white paper on the causes and distribution patterns of post-inflammatory hyperpigmentation, demonstrating the brand's commitment to scientific validation [14][16]. Research and Development - The integration of research and clinical application is evident in the initiatives taken by brands like Giant Bio and Zhenyan Bio, which are expanding the boundaries of medical-research co-creation through innovative collagen products and clinical studies [20][22]. - The collaboration between brands and medical experts is evolving, with companies like Ximu Yuan conducting extensive research on sensitive skin, showcasing a shift from being mere users of research to contributors to scientific inquiry [24][25]. Future Outlook - The CDA conference highlighted a significant shift in the beauty industry towards a more scientific and collaborative approach, with brands, medical institutions, and research organizations forming a new ecosystem that emphasizes shared data and mutual advancement [47][48]. - The focus on original ingredient research is becoming a core strategy for leading domestic brands, as they aim to differentiate themselves from homogenized competition [38][39].

Market Overview - The cosmetics sector increased by 0.2% on November 13, with Jinsheng New Materials leading the gains [1] - The Shanghai Composite Index closed at 4029.5, up 0.73%, while the Shenzhen Component Index closed at 13476.52, up 1.78% [1] Individual Stock Performance - Jinsheng New Materials (300849) closed at 16.16, up 2.08% with a trading volume of 59,500 shares and a transaction value of 95.82 million yuan [1] - Shuiyang Co. (300740) closed at 21.51, up 2.04% with a trading volume of 147,200 shares and a transaction value of 314 million yuan [1] - Beitaini (300957) closed at 43.24, up 1.08% with a trading volume of 35,900 shares and a transaction value of 154 million yuan [1] - Other notable stocks include Furuida (600223) at 7.98 (+0.63%), Qingsong Co. (300132) at 8.12 (+0.37%), and Qingdao Kingway (002094) at 7.80 (+0.26%) [1] Capital Flow Analysis - The cosmetics sector experienced a net outflow of 56.57 million yuan from institutional investors and 32.11 million yuan from retail investors, while individual investors saw a net inflow of 88.67 million yuan [2] - The capital flow for individual stocks shows that Shuiyang Co. had a net inflow of 21.64 million yuan from institutional investors, while other stocks like Huaye Fragrance (300886) and Kesheng Co. (300856) faced net outflows [3]

Market Overview - The cosmetics sector increased by 0.24% on November 12, with Jiaheng Jiahua leading the gains [1] - The Shanghai Composite Index closed at 4000.14, down 0.07%, while the Shenzhen Component Index closed at 13240.62, down 0.36% [1] Individual Stock Performance - Jiaheng Jiahua (300955) closed at 39.79, up 6.82% with a trading volume of 110,800 shares and a turnover of 429 million yuan [1] - Huaye Fragrance (300886) closed at 30.72, up 1.96% with a trading volume of 32,700 shares and a turnover of 99.64 million yuan [1] - Shanghai Jahwa (600315) closed at 24.60, up 0.78% with a trading volume of 62,900 shares and a turnover of 15.5 million yuan [1] - Other notable stocks include Bawei Co. (920123) at 18.31, up 0.72%, and Kesheng Co. (300856) at 14.00, up 0.50% [1] Capital Flow Analysis - The cosmetics sector experienced a net outflow of 66.86 million yuan from institutional investors, while retail investors saw a net inflow of 2.95 million yuan [2] - The overall capital flow indicates a mixed sentiment, with institutional investors withdrawing funds while retail investors are entering the market [2] Detailed Capital Flow by Stock - Qing Song Co. (300132) had a net inflow of 5.60 million yuan from institutional investors, while it faced a net outflow of 7.23 million yuan from speculative funds [3] - Shanghai Jahwa (600315) saw a net inflow of 5.19 million yuan from institutional investors but a net outflow of 8.56 million yuan from retail investors [3] - Other stocks like Huaye Fragrance (300886) and Kesheng Co. (300856) also showed varied capital flows, indicating differing investor sentiments across the sector [3]

Core Insights - The Chinese beauty industry is at a critical juncture, transitioning from rapid growth driven by channels and traffic to a focus on brand value and operational excellence [1] - Recent financial reports from leading domestic beauty companies reveal a divide: some are struggling with transformation pains, while others are rebounding due to strong brand value [1] Group 1: Performance Challenges - Beitaini reported a revenue of 3.464 billion yuan for the first three quarters of 2025, a year-on-year decline of 13.78%, with a net profit of 272 million yuan, down 34.45% [2] - In Q3, Beitaini's revenue was 1.092 billion yuan, a decline of 9.95%, but net profit increased by 136.55% to 25.22 million yuan due to cost-cutting and a shift to high-quality growth [3] - Beitaini's operating costs decreased by 15.75% to 889 million yuan, while sales expenses were 1.838 billion yuan, down 8.55% [6] - Furuida's revenue for the first three quarters was 2.597 billion yuan, down 7.34%, with a net profit of 142 million yuan, a decrease of 17.19% [7] - The brand Yailabo's revenue fell by 28.93% in Q3, indicating a significant decline from its peak performance in 2023 [11] Group 2: Successful Turnarounds - Shanghai Jahwa achieved a revenue of 4.961 billion yuan in the first three quarters of 2025, a 10.8% increase, with net profit soaring by 149.1% to 405 million yuan [12] - The company reported a Q3 revenue of 1.482 billion yuan, up 28.3%, reversing a previous decline [12] - The turnaround is attributed to a strategic focus on core brands and effective brand activation under new CEO Lin Xiaohai, emphasizing brand value as a growth strategy [15][18] Group 3: Industry Trends - The beauty industry is shifting towards a focus on brand value and ecosystem building, moving away from reliance on external factors like channels and marketing [19][23] - New brands face challenges due to the fragmentation of channels and rising costs, leading to a need for deeper brand connections with consumers [19][21] - Established brands like Shanghai Jahwa demonstrate resilience through strong brand recognition and emotional connections with consumers, allowing for rapid recovery when strategic adjustments are made [22] - The industry must prioritize building a multi-brand ecosystem and sustainable financial practices, as seen in Beitaini's recent focus on profitability [24]

Investment Rating - The report maintains an "Outperform" rating for the retail sector [3][58]. Core Insights - The retail industry is experiencing a low-level recovery with significant differentiation among individual stocks. The overall growth rate for the industry has shown a slight decline in the third quarter, with retail sales in the first nine months of 2025 reaching 365,877 billion yuan, a year-on-year increase of 4.5% [1][13]. - The beauty and personal care sector is facing pressure on profitability due to changes in e-commerce platform rules and a lack of innovative products. The gold and jewelry sector is performing well, driven by stable sales of fixed-price products. The cross-border e-commerce sector is showing positive growth, while offline retail continues to face challenges [2][34][42]. Summary by Sections Overall Industry Performance - The retail sector's growth has been relatively stable, with a year-on-year increase of 4.5% in retail sales for the first nine months of 2025. The growth rate has declined in the second half of the year due to a decrease in consumer purchasing power and the tapering of stimulus policies [1][13]. Beauty and Personal Care - The beauty sector's sales reached 328.82 billion yuan in the first three quarters of 2025, growing by 3.9% year-on-year. However, profitability has been under pressure due to weak product launches and changes in promotional strategies [22][28]. Gold and Jewelry - The gold and jewelry sector saw a significant year-on-year growth of 11.5% in retail sales, totaling 276.81 billion yuan in the first three quarters of 2025. The sector benefits from a low base from the previous year and rising gold prices, although profitability has faced challenges [34][41]. Cross-Border E-commerce - Cross-border e-commerce has shown a stable growth trajectory, with a total import and export value of approximately 2.06 trillion yuan in the first three quarters of 2025, reflecting a year-on-year increase of 6.4%. The sector's revenue grew by 15.15% in Q3 2025, driven by strong operational resilience among leading companies [42][48]. Offline Retail - The offline retail sector remains under pressure, with a year-on-year increase of only 3.5% in retail sales for the first three quarters of 2025. The overall revenue for the offline retail sector declined by 15.9% in Q3 2025, indicating ongoing challenges in the market [50][54].

Core Viewpoint - The cosmetics sector experienced a notable increase of 3.13% on November 10, with Lafang Jiahua leading the gains [1] Group 1: Market Performance - The Shanghai Composite Index closed at 4018.6, up 0.53%, while the Shenzhen Component Index closed at 13427.61, up 0.18% [1] - Lafang Jiahua's stock price rose by 6.14% to 23.51, with a trading volume of 96,700 shares and a transaction value of 223 million [1] - Other notable performers included: - Jiahen Jiahua: 5.57% increase, closing at 36.79 with a transaction value of 124 million [1] - Qingsong Co.: 4.56% increase, closing at 7.80 with a transaction value of 362 million [1] - Proya: 4.46% increase, closing at 73.32 with a transaction value of 759 million [1] Group 2: Fund Flow Analysis - The cosmetics sector saw a net inflow of 152 million from institutional investors, while retail investors experienced a net outflow of 179 million [1] - Key fund flows for selected companies included: - Lafang Jiahua: 22.32 million net inflow from institutional investors, with a net outflow of 11.42 million from retail investors [2] - Beitaini: 34.32 million net inflow from institutional investors, with a net outflow of 13.48 million from retail investors [2] - Shanghai Jahwa: 24.72 million net inflow from institutional investors, with a net outflow of 30.62 million from retail investors [2]

Investment Rating - The report suggests a positive investment outlook for the beauty and personal care sector, recommending a "buy" rating for high-growth companies with strong brand power and innovative product offerings [2][3]. Core Insights - The beauty and personal care sector is experiencing a slow recovery, with significant differentiation among sub-sectors. Personal care products and innovative channels continue to perform strongly, while the cosmetics sector shows signs of slowing growth due to domestic brand competition [1][2][3]. - For 2026, the overall beauty and personal care market is expected to remain stable, but further differentiation among companies is anticipated. The report emphasizes the importance of selecting high-growth targets with product and channel innovations [2][3]. Summary by Sections Overall Market Performance - In the first three quarters of 2025, the beauty and personal care sector saw revenues and net profits increase by 2.7% and 4.9% respectively, with personal care outperforming cosmetics and medical aesthetics [12][31]. - The cosmetics sector experienced a slight decline in revenue, with a 0.4% decrease year-on-year, while net profit fell by 2.3% [31][33]. Personal Care Sector - The personal care segment achieved revenues of 52 billion yuan and net profits of 5 billion yuan, reflecting a year-on-year increase of 33.7% and 5.7% respectively. The third quarter alone saw a revenue increase of 41.1% [12][16]. - Companies like Ruoyuchen reported impressive growth, with a 123% increase in revenue and a 73% increase in net profit in the third quarter [12][28]. Cosmetics Sector - The cosmetics sector's revenue for the first three quarters was 308 billion yuan, with a net profit of 30 billion yuan, showing a decline of 0.4% and 2.3% respectively. The third quarter saw a revenue drop of 0.5% but a significant profit increase of 50.8% [12][31]. - The report highlights the importance of individual company strategies and product life cycles in determining performance within the cosmetics sector [13][48]. Medical Aesthetics Sector - The medical aesthetics segment reported revenues of 75 billion yuan and net profits of 27 billion yuan, with a slight revenue decline of 0.7% but a profit increase of 14.5% year-on-year [12][52]. - The third quarter saw a revenue increase of 1.8% and a remarkable profit growth of 96.6%, although underlying performance was affected by increased competition and integration challenges [52][56]. Investment Recommendations - The report recommends focusing on high-growth companies with strong brand power, such as Ruoyuchen, Shangmei, and Maogeping, as well as companies with stable fundamentals and potential for marginal improvement like Dengkang Oral and Shanghai Jahwa [2][3]. - It also suggests monitoring companies that are expected to reach a turning point, such as Runben and Jinjian Biological, which may present investment opportunities [2][3].

Investment Rating - The report maintains a positive outlook on the cosmetics and medical beauty sector, with specific recommendations for companies like Maogeping and Shangmei Co. [4][9] Core Insights - The cosmetics and medical beauty sector underperformed the market during the reporting period, with the Shenwan Beauty Care Index declining by 3.1% [5] - The upcoming Double 11 shopping festival is expected to boost sales for Shangmei Co. and Maogeping, with strong performance anticipated on platforms like Douyin and Tmall [4][9] - Key companies such as Proya and Shanghai Jahwa reported mixed results, with Proya's revenue for Q3 2025 at 1.736 billion yuan, down 11.63% year-on-year, while Shanghai Jahwa's revenue grew by 28% to 1.483 billion yuan [10][15] Summary by Sections Industry Performance - The cosmetics and medical beauty sector showed a decline, with the Shenwan Cosmetics Index down 2.6% and the Shenwan Personal Care Index down 0.9% [5] - The top-performing stocks included *ST Meigu (+12.3%) and Jinsong New Materials (+6.2%), while Huaxi Biological and Beitaini saw declines of 7.8% and 7.4%, respectively [5] Company Performance - Proya's Q3 2025 revenue was 1.736 billion yuan, a decrease of 11.63% year-on-year, with a net profit of 227 million yuan, down 23.64% [10] - Shanghai Jahwa reported Q3 revenue of 1.483 billion yuan, an increase of 28%, with a net profit of 140 million yuan [15] - Ruoyuchen's Q3 revenue reached 819 million yuan, up 123.4% year-on-year, with a net profit of 33 million yuan [18] Market Trends - The 8th China International Import Expo showcased major international beauty brands, highlighting trends such as high-end market targeting and AI technology in beauty research and development [27] - The report indicates that the Chinese market is evolving into a global innovation hub for beauty products, with a focus on sustainability and green transformation [27] E-commerce Insights - The report provides data on the performance of domestic brands on platforms like Douyin and Tmall, with Shangmei Co. achieving significant growth in GMV [21] - The overall retail sales of cosmetics in September 2025 grew by 8.6%, driven by pre-Double 11 promotions [22][24]

Investment Rating - The report maintains a "Positive" outlook on the cosmetics and medical beauty industry, highlighting potential growth opportunities despite recent market underperformance [2]. Core Insights - The cosmetics and medical beauty sector has underperformed the market, with the Shenwan Beauty Care Index declining by 3.1% from October 31 to November 7, 2025 [3][4]. - The upcoming Double 11 shopping festival is expected to boost performance for companies like Shuangmei Co. and Maogeping, with strong sales anticipated on platforms like Douyin and Tmall [3][9]. - Key companies such as Proya, Shanghai Jahwa, and Ruifucheng have shown varying performance, with Proya's revenue for Q3 2025 at 1.736 billion yuan, down 11.63% year-on-year, while Shanghai Jahwa's revenue increased by 28% to 1.483 billion yuan [10][16]. Summary by Sections Industry Performance - The cosmetics and medical beauty sector has shown a decline, with the Shenwan Cosmetics Index down 2.6%, underperforming the Shenwan A Index by 3.3 percentage points [3][4]. - The top-performing stocks this week included *ST Meigu (+12.3%) and Jinsong New Materials (+6.2%), while Huaxi Biological and Beitaini saw declines of 7.8% and 7.4%, respectively [5]. Company Performance - Proya's Q3 2025 revenue was 1.736 billion yuan, a decrease of 11.63% year-on-year, with a net profit of 227 million yuan, down 23.64% [10][11]. - Shanghai Jahwa reported Q3 revenue of 1.483 billion yuan, up 28%, with a net profit of 140 million yuan [16]. - Ruifucheng's Q3 revenue reached 819 million yuan, a significant increase of 123.4% year-on-year, with a net profit of 33 million yuan [20]. Market Trends - The 8th China International Import Expo showcased international beauty brands, indicating a shift towards high-end markets and functional skincare products [31]. - The report highlights the increasing importance of e-commerce channels, with brands like Maogeping and Shuangmei Co. performing well on platforms like Tmall and Douyin [9][24]. E-commerce Data - In September 2025, the GMV for domestic brands on Douyin and Tmall showed significant growth, with Shuangmei Co. achieving a GMV of 8.1 billion yuan, up 47% year-on-year [24]. - The overall retail sales of cosmetics in September 2025 reached 368 billion yuan, reflecting an 8.6% year-on-year growth, driven by pre-Double 11 promotions [25][27].

1. Report Industry Investment Rating - The industry rating is "Bullish" [1] 2. Core Views of the Report - The cosmetics industry continues to show differentiation, with brand demand being weak in the off - season, agents seeking change in difficult situations, and producers seizing supply - chain reconstruction opportunities. The medical aesthetics industry has new entrants with better - than - expected shipments, and new product catalysts are worth attention [3][4] 3. Summaries According to Relevant Catalogs 3.1 Cosmetics: Continued Differentiation 3.1.1 Brand Merchants - In 1 - 3Q25, beauty brand merchants' revenue was 28.4 billion yuan, a year - on - year decrease of 0.6%; personal care brand merchants' revenue was 5.7 billion yuan, a year - on - year increase of 12.4%. In 3Q25, beauty and personal care brand merchants' revenues were 8.05 billion and 1.805 billion yuan, a year - on - year decrease of 1.3% and an increase of 7.6% respectively. Beauty revenue weakened quarter - on - quarter, while personal care remained flat [18] - Beauty: Affected by the earlier Double Eleven promotion, consumer enthusiasm declined in September, and brands reduced live - streaming activities. In terms of single - quarter revenue growth, Shuiyang Co., Ltd. and Shanghai Jahwa increased by over 20%, Marubi Co., Ltd. had double - digit growth, Proya had low - double - digit decline, and Betaine and Freda had high - single - digit decline [18] - Personal care: Runben Co., Ltd.'s Q3 revenue increased by 17% year - on - year, with a slight increase in growth rate quarter - on - quarter. Baiya Co., Ltd.'s 3Q25 revenue improved, and Dengkang Oral Care had steady growth [18] - In 1 - 3Q25, beauty brand merchants' net profit after non - recurring items was 2.33 billion yuan, a year - on - year decrease of 15%; personal care brand merchants' was 604 million yuan, a year - on - year decrease of 3.4%. Some companies showed initial cost - control effects [24] 3.1.2 Agents - Agents are seeking change in difficult situations by exploring three paths: incubating self - owned brands (represented by Ruoyuchen), using AI to reduce costs and increase efficiency (represented by Yiwow), and expanding high - growth categories (such as Qingmu Technology expanding into trendy toy agency operations) [30] - Ruoyuchen's self - owned brands Feicui and Zhanjia continued to gain momentum. In Q3, self - owned brand revenue was 451 million yuan, a year - on - year increase of 344.5%, accounting for 55.1%. Zhanjia's Q3 revenue was 227 million yuan, a year - on - year increase of 119%, and 1 - 3Q revenue was 680 million yuan. Feicui's Q3 revenue was 203 million yuan, a quarter - on - quarter increase of over 98.8%, and 1 - 3Q revenue was 362 million yuan [30] 3.1.3 Producers - Demand continued to recover, and the revenue of the producer sector increased by 9%, 17%, and 30% year - on - year from Q1 to Q3, with the growth rate increasing quarter by quarter [33] - QingSong Co., Ltd. focused on optimizing customers and product structure, and its profit turned positive for four consecutive quarters from 2Q24 to 1Q25. Jieya Co., Ltd. had increasing orders from overseas big customers, and its Q3 performance growth accelerated. Jiaheng Home Co., Ltd. increased revenue but not profit, mainly due to the short - term impact of the Huzhou base's capacity ramp - up [33] 3.2 Medical Aesthetics: New Entrants with Better - than - Expected Shipments 3.2.1 Upstream Consumables - The growth rate of demand expansion slowed down, and supply - side competition intensified. In terms of the cumulative number of Class III medical device approvals, hyaluronic acid > regenerative (Sculptra/Poly - L - Lactic Acid) > botulinum toxin > recombinant collagen. Old products of hyaluronic acid and regenerative types faced growth pressure, and the growth rate of recombinant collagen Class III medical device products slowed down significantly quarter - on - quarter [38] - Hyaluronic acid: Aimeike's revenue growth rate from 24Q1 to 25Q3 was + 28.2%/+2.3%/+1.1%/ - 7%/ - 18%/ - 25%/ - 21% year - on - year, showing a quarterly decline since 24Q2 [38] - Collagen: Jinbo Biotech's revenue growth rate from 24Q1 to 25Q1 was + 76%/+100%/+92%/+73%/+63% year - on - year, and in 2Q25/3Q25, it was + 30%/+13% year - on - year. On October 23, the "Recombinant Type I α1 Subtype Collagen Freeze - Dried Fiber" Class III medical device certificate of Giant Biogene was approved by NMPA [38] - Leapmed Medical's medical aesthetics shipments were better than expected, with Q3 medical service and health management business revenue of 320 million yuan, a year - on - year increase of 28%, and the revenue of Sculptra and Hydrodermabrasion reaching 86.1367 million yuan [36] 3.2.2 Downstream - The new model of Xinoxygen Medical Clinics showed high - growth potential. The Q3 revenue guidance was 150 - 170 million yuan, a year - on - year increase of 231% - 275%, and a quarter - on - quarter increase of 4% - 18%. It plans to implement the "100 - City, 1000 - Store" plan in the long term [40] - Stores are expanding from first - tier cities to new first - tier and second - tier cities. As of November 6, it covered 42 stores in 10 cities. The promotion of self - owned brands was remarkable, and it cooperated with Xihong Miracle Sculptra 3.0, priced at 2999 yuan, which was officially launched on September 25 [43] 3.3 Investment Recommendations - Brands with upward potential and both growth and certainty: Recommend Maogeping (Oriental aesthetics, dual - wheel drive of makeup and skincare, and the second - curve of perfume is worth looking forward to) and Shangmei Co., Ltd. (with one cornerstone brand, five growth brands, and N seed businesses) [8][46] - Companies with new product pipelines and expected performance elasticity: Pay attention to Giant Biogene and Leapmed Medical [8][46] - Companies in strategic adjustment and expected to reach an inflection point: Recommend Shuiyang Co., Ltd. (the effect of high - end transformation is gradually emerging), and pay attention to Shanghai Jahwa, Betaine, and Freda [8][46]