Summary of Conference Call Records Industry Overview - The conference call discusses the outlook for the beauty and e-commerce sectors in China, particularly focusing on the upcoming Double Eleven shopping festival in 2025. The overall market sentiment is optimistic, with expectations of accelerated growth across various platforms, especially Taobao and Tmall, which are projected to achieve a growth rate of around 20% during the event [1][3]. Key Companies and Their Performance 1. **Taobao and Tmall** - Taobao and Tmall are expected to see marginal acceleration in growth, benefiting from personnel adjustments, local life integration, instant retail, and the influence of the 88 VIP membership program [1][3]. 2. **Douyin** - Douyin is anticipated to achieve approximately 40% growth, with other platforms also expected to maintain double-digit growth rates [1][3]. 3. **Proya (珀莱雅)** - Proya is currently in a personnel adjustment phase, with GMV growth expectations for Double Eleven projected to be in the single to low double digits. The company plans to launch more new products in 2026 and aims for a listing on the Hong Kong Stock Exchange [1][9]. 4. **Mao Geping (毛戈平)** - Mao Geping is expected to maintain a strong sales performance, with online sales growth projected between 40% to 50% during Double Eleven. The brand has seen significant collaboration with Li Jiaqi, particularly on key products [1][7][8]. 5. **Perfect Diary (完美股份)** - Perfect Diary had a strong online performance in the first half of the year but experienced a slight slowdown in Q3. The brand is expected to achieve over 30% growth during Double Eleven [1][11]. 6. **Shanghai Jahwa (上海家化)** - Shanghai Jahwa has shown accelerated online sales in Q3, with expectations for significant growth during Double Eleven, driven by brands like Bai Cao Ji and Yu Ze [1][10]. 7. **Yixian E-commerce (易鲜电商)** - Yixian's high-end brands, such as Kalanli and Darfu, have seen GMV double in Q2, indicating a strong recovery and potential for further growth [1][12]. 8. **Luyuchen (陆雨辰)** - Luyuchen is expected to see a significant increase in revenue, estimated to double in Q3, benefiting from rapid growth in its Jade Station home and optimized operations on Douyin [1][13]. 9. **Iffidan (伊菲丹)** - Iffidan is focusing on multi-channel operations and product launches, with plans to open 50 offline stores in China over three years [2][16][17]. 10. **Jinbo Biotech (锦波生物)** - Jinbo is strengthening its position in the medical beauty sector with new product approvals and collaborations, aiming for significant market penetration [1][19]. 11. **Meili Tianyuan Group (美丽田园集团)** - The group has made a strategic acquisition of Siyuanli, enhancing its market share and member base significantly [1][21]. 12. **Shangmei Group (上美股份)** - Shangmei is expanding its product range and has achieved significant growth through innovative marketing strategies on Douyin [1][22]. Market Trends and Consumer Behavior - Domestic beauty brands are gaining market share due to better consumer insights and faster product iterations compared to foreign luxury brands, which are struggling with slower product development [2][15]. - The price stability of foreign brands contrasts with the aggressive pricing strategies of domestic brands, indicating a shift in market dynamics [1][4]. Investment Strategies - The new consumption sector is highlighted as a key investment area, with traditional growth stocks also being considered due to their strong fundamentals and lower valuations expected in 2026 [1][6]. Conclusion - The upcoming Double Eleven shopping festival is expected to be a significant growth driver for the beauty and e-commerce sectors, with various companies poised to capitalize on the trends and consumer behavior shifts observed in the market. The overall sentiment is positive, with a focus on innovation, collaboration, and strategic positioning to enhance market share and profitability.

Group 1 - The cosmetics sector experienced a significant increase of 3.35% on October 15, with Shuiyang Co., Ltd. leading the gains [1] - The Shanghai Composite Index closed at 3912.21, up 1.22%, while the Shenzhen Component Index closed at 13118.75, up 1.73% [1] - Major stocks in the cosmetics sector showed notable price increases, with Shuiyang Co., Ltd. rising by 8.45% to a closing price of 25.03 [1] Group 2 - The net inflow of main funds in the cosmetics sector was 219 million yuan, while retail investors saw a net outflow of 222 million yuan [1] - Shanghai Jahwa's main fund net inflow was 85.02 million yuan, with a retail net outflow of 66.90 million yuan [2] - Shuiyang Co., Ltd. had a main fund net inflow of 46.76 million yuan, but a retail net outflow of 69.20 million yuan [2]

Market Overview - The Shanghai Composite Index increased by 0.44% as of 10:29 AM, with a trading volume of 599.19 million shares and a transaction value of 938.95 billion yuan, representing a decrease of 24.91% compared to the previous trading day [1]. Industry Performance - The top-performing industries included: - Beauty and Personal Care: Increased by 2.03% with a transaction value of 32.92 billion yuan, up 64.11% from the previous day, led by Shanghai Jahwa with a rise of 10.00% [1]. - Building Materials: Increased by 1.52% with a transaction value of 69.93 billion yuan, down 4.57% from the previous day, led by Yaopi Glass with a rise of 9.98% [1]. - Retail: Increased by 1.50% with a transaction value of 127.32 billion yuan, up 14.76% from the previous day, led by Ruoyu Chen with a rise of 7.41% [1]. - The worst-performing industries included: - Defense and Military: Decreased by 0.74% with a transaction value of 257.37 billion yuan, down 34.83% from the previous day, led by Beifang Changlong with a drop of 10.63% [2]. - Oil and Petrochemicals: Decreased by 0.68% with a transaction value of 45.06 billion yuan, down 14.25% from the previous day, led by Yueyang Xingchang with a drop of 5.04% [2]. - Public Utilities: Decreased by 0.21% with a transaction value of 211.38 billion yuan, down 13.46% from the previous day, led by Hongtong Gas with a drop of 6.23% [2].

Core Viewpoint - The A500 index and A500 ETF have shown positive performance, with significant gains in individual stocks and overall market sentiment despite short-term volatility and external uncertainties [1][4][5]. Group 1: A500 Index Performance - As of October 15, 2025, the A500 index increased by 0.41%, with notable individual stock performances including Shanghai Jahwa up by 9.29% and Tongwei Co. up by 7.57% [1]. - The A500 ETF managed by Harvest has seen a cumulative increase of 16.45% over the past three months as of October 14, 2025 [1]. Group 2: A500 ETF Details - The A500 ETF has a trading turnover of 4.73% and a transaction volume of 559 million yuan, with its latest scale reaching 11.773 billion yuan [4]. - Over the past week, the A500 ETF's shares increased by 18.3 million, indicating significant growth [4]. - The ETF has experienced continuous net inflows over the last three days, totaling 21.7 million yuan, with a peak single-day inflow of 9.184 million yuan [4]. Group 3: Market Sentiment and Outlook - Despite short-term negative factors affecting the market, there is a clear expectation of improved corporate earnings and supportive policy signals, which are likely to sustain market momentum [4]. - According to Guosen Securities, the A-share market remains optimistic due to policy support, with a focus on traditional value sectors such as real estate, brokerage, and consumer goods in the fourth quarter [5]. Group 4: Top Weighted Stocks in A500 Index - As of September 30, 2025, the top ten weighted stocks in the A500 index include CATL, Kweichow Moutai, and Ping An Insurance, collectively accounting for 19% of the index [5].

Group 1 - The beauty and personal care sector is experiencing significant growth, with Shanghai Jahwa reaching its daily limit increase [1] - Shuiyang Co., Ltd. has seen an increase of over 8% in its stock price [1] - Other companies such as Kesi Co., Jiaheng Jiahua, Jinbo Biotechnology, and Babi Co. are also witnessing stock price increases [1]

Core Insights - The cosmetics sector experienced a slight increase of 0.31% on October 14, with Shanghai Jahwa leading the gains [1] - The Shanghai Composite Index closed at 3865.23, down 0.62%, while the Shenzhen Component Index closed at 12895.11, down 2.54% [1] Company Performance - Shanghai Jahwa (600315) closed at 26.59, up 5.10%, with a trading volume of 102,700 shares and a transaction value of 270 million yuan [1] - Lafang (603630) closed at 24.65, up 4.05%, with a trading volume of 90,200 shares and a transaction value of 221 million yuan [1] - Qingdao Kingway (002094) closed at 7.97, up 1.92%, with a trading volume of 413,400 shares and a transaction value of 329 million yuan [1] - Other notable performers include Bawei (920123) at 17.83 (+1.54%) and Jinsong New Materials (300849) at 13.53 (+0.97%) [1] Fund Flow Analysis - The cosmetics sector saw a net outflow of 13.28 million yuan from institutional investors, while retail investors experienced a net outflow of 46.69 million yuan [2] - Conversely, speculative funds recorded a net inflow of 59.98 million yuan [2] Individual Stock Fund Flow - Shanghai Jahwa had a net inflow of 29.86 million yuan from institutional investors, while retail investors saw a net outflow of 24.90 million yuan [3] - Lafang recorded a net inflow of 21.89 million yuan from institutional investors, with retail investors experiencing a net outflow of 21.61 million yuan [3] - Qingdao Kingway had a net inflow of 16.80 million yuan from institutional investors, while retail investors saw a net outflow of 18.67 million yuan [3]

Core Insights - The report from CICC indicates that the consumption data for the National Day and Mid-Autumn Festival holidays in 2025 shows strong performance, driven by longer holiday periods and a high level of domestic and outbound travel [1] Group 1: Consumption Trends - Overall consumption data reflects a youthful and experience-oriented trend, with notable performance in discretionary categories such as home appliances and outdoor sports [1] - The average daily flow of cross-regional personnel in mainland China from October 1 to 8 increased by 6.2% year-on-year, indicating a robust travel environment [1] - The average spending per trip during the holiday increased by 14.6% year-on-year, attributed to the ongoing recovery of outbound tourism and a rise in long-distance and segmented travel within the country [1] Group 2: Retail Performance - The Ministry of Commerce's monitoring of 78 key business districts showed a year-on-year increase in foot traffic and sales of 4.2% and 4% respectively during the first three days of the holiday [1] - Data from the National Immigration Administration revealed that the average daily number of inbound and outbound travelers exceeded 2 million, marking a 15% year-on-year increase [1] Group 3: Investment Recommendations - CICC recommends focusing on sectors benefiting from self-indulgent consumption trends, such as trendy toys and e-cigarettes, highlighting companies like Pop Mart (09992), Blucor (00325), and Smoore International (06969) [1] - The report also suggests investing in domestic brands in the beauty and personal care sectors, recommending companies like Mao Geping (01318), Giant Bio (02367), and Shanghai Jahwa (600315) [1] - Attention is drawn to retail sectors that may benefit from supportive domestic policies and seasonal catalysts [1]

Investment Rating - The report gives a "Buy" rating for the cosmetics and medical beauty industry, particularly highlighting the potential of specific companies like Water Sheep Co., Ltd. [13] Core Insights - The cosmetics and medical beauty sector has underperformed the market recently, with the Shenwan Beauty Care Index rising by 1.3% from September 29 to October 10, 2025, which is lower than the overall market performance [3][4] - The upcoming Tmall Double 11 event is expected to boost sales, with domestic brands actively participating with competitive discounts [8] - Water Sheep Co., Ltd. is identified as a leading technology-driven beauty company, with stable revenue projections and improving profit margins [9][10] Summary by Sections Industry Performance - The cosmetics and medical beauty sector has shown weaker performance compared to the market, with the Shenwan Cosmetics Index increasing by 1.2%, lagging behind the Shenwan A Index by 0.4 percentage points [3][4] - The top-performing stocks in the sector include Jiaheng Home Care (+35.0%), Yiyi Co., Ltd. (+18.6%), and Yanjing Co., Ltd. (+15.6%) [5] Upcoming Events - Tmall's Double 11 sales event is set to begin on October 15, 2025, with major domestic brands like Proya and Maogeping expected to participate actively [8] Company Focus: Water Sheep Co., Ltd. - Water Sheep Co., Ltd. has a dual business model of proprietary and CP agency brands, with projected revenues stabilizing between 4 to 5 billion yuan from 2021 to 2024 [9] - The company is expected to achieve net profits of 258 million, 331 million, and 398 million yuan for the years 2025, 2026, and 2027, respectively, reflecting significant growth [10][13] Market Trends - The overall retail sales of cosmetics in August 2025 grew by 5.1%, indicating a recovery in consumer demand [17] - The domestic market is seeing a shift in market share, with local brands gaining ground against international competitors [25] E-commerce Insights - Data shows that domestic brands are performing well on platforms like Douyin and Tmall, with significant growth in GMV for brands like Proya and Maogeping [14][15] Company Developments - Proya has filed for an IPO in Hong Kong, with stable revenue growth and a strong online presence [19] - The report highlights the strategic moves of various companies, including partnerships and new product launches, to enhance their market positions [24][23]

Core Viewpoint - The domestic cosmetics industry is experiencing a significant transformation, focusing on the innovation of plant-based ingredients and the development of proprietary technologies for extracting and utilizing these ingredients effectively [1][4][14]. Group 1: Technological Advancements - Since 2022, the domestic cosmetics industry has gradually mastered the full-process technology of "active substance labeling, impurity separation, and purity control" [10]. - Companies like Yunnan's Betaini have successfully extracted beneficial components from plants, such as the Qingci fruit, which has shown efficacy in skin barrier repair and anti-aging [2][11]. - The use of AI technology has accelerated the identification and extraction of effective plant components, allowing for higher purity and better efficacy in products [12]. Group 2: Market Trends - There is a growing trend among domestic cosmetics companies to utilize plant-based ingredients as a key differentiator in product offerings, with many brands showcasing their latest research and development at industry conferences [3][6]. - The number of new plant-based raw materials registered has increased significantly, from 3 in 2022 to 42 in 2024, indicating a shift towards plant-based ingredients dominating the market [7]. - The market for domestic cosmetics is expanding, with local brands capturing over 55.2% of the market share, surpassing foreign brands [15]. Group 3: Investment and Capital Market - Several companies focusing on plant-based ingredients have initiated IPO processes, reflecting increased investor interest in the sector [14]. - Notable investments have been made in companies with capabilities in plant raw material research, indicating a strong market confidence in the potential of domestic plant-based cosmetics [14]. Group 4: Future Outlook - The domestic cosmetics industry is expected to continue its shift towards using local plant resources, with predictions that domestic raw materials will account for over 80% of the market share in the future [15]. - As the industry matures, the purity, stability, and efficacy of domestic raw materials are approaching or even surpassing international standards, enhancing brand confidence in local sourcing [15].

Core Insights - The Chinese cosmetics industry is increasingly focusing on plant-based ingredients as a key differentiator and competitive advantage in product development [2][3][9] - The number of new plant-based raw materials registered has surged, indicating a significant shift towards natural ingredients in the cosmetics sector [4][5][11] Group 1: Industry Trends - The trend of utilizing local plant ingredients is becoming a common strategy among domestic cosmetics companies, with many brands showcasing their innovative plant-based products at industry events [2][3] - The number of plant-based raw materials registered with the National Medical Products Administration has increased from 3 in 2022 to 42 in 2024, surpassing chemical raw materials [4] - The market for domestic cosmetics is growing, with local brands capturing over 55.2% of the market share, indicating a shift in consumer preference towards homegrown products [11] Group 2: Technological Advancements - Advances in technology have enabled the extraction and identification of active components from plants, allowing for more targeted and effective product formulations [6][7] - Companies like谷雨 have successfully utilized AI technology to enhance the purity and efficacy of their plant-based ingredients, leading to breakthroughs in product development [8] - The development of proprietary extraction techniques has allowed companies to produce high-purity plant extracts at scale, significantly reducing costs and increasing market competitiveness [7][10] Group 3: Market Dynamics - The increasing interest in plant-based ingredients has led to a rise in IPO applications from companies specializing in these materials, reflecting investor confidence in the sector [10] - The push for domestic raw material sourcing is reshaping the supply chain dynamics, with companies advocating for the use of local ingredients to reduce reliance on imports [10][11] - The cosmetics industry is at a critical turning point, with local plant resources becoming a vital demand for future product development [2][4]