Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Views - The report highlights the competitive advantage of Qian Dama through its "community small store + daily clearance mechanism + warehouse and cold chain" model, which enhances supply stability and operational efficiency [3][24][35] - The report emphasizes the importance of emotional consumption themes and identifies high-quality companies in high-growth sectors, recommending specific companies across various segments [6][37] Summary by Sections Industry Overview - The retail and social service indices reported a decline of 1.47% and an increase of 1.53% respectively during the week of January 12-16, 2026 [5][13] - The internet e-commerce sector showed the highest growth, with a year-to-date increase of 11.18% [16][19] Company Highlights - Qian Dama has submitted its IPO application to the Hong Kong Stock Exchange, focusing on fresh food retail in the South China market, with a GMV of 9.8 billion yuan in 2024, significantly outperforming its competitors [24][25] - The company operates 2,983 stores, with 2,898 being franchise stores, contributing over 90% of its revenue [25][31] - The report recommends several companies based on their performance and market positioning, including: - Chaohongji, expected to achieve a net profit of 436-533 million yuan in 2025, driven by brand upgrades and channel expansion [39][43] - Meilitiantian Medical Health, projected to see a revenue increase of 28.2% in FY2025H1 [39] - Zhou Dafu, focusing on product structure optimization and store upgrades [39] Investment Themes - Investment Theme 1: Focus on high-end gold and fashion jewelry brands, recommending Chaohongji and Laopu Gold [6][37] - Investment Theme 2: Emphasize retail companies adapting to trends and AI-enabled cross-border e-commerce leaders, recommending Yonghui Supermarket and Aiyingshi [6][37] - Investment Theme 3: Highlight domestic beauty brands that meet emotional value and safety innovation, recommending Maogeping and Pola [6][37] - Investment Theme 4: Focus on differentiated medical beauty product manufacturers and leading medical beauty institutions, recommending Meilitiantian Medical Health and Aimeike [6][37]

Group 1 - The core viewpoint of the news is that Betaini has made significant progress in the upstream medical beauty industry chain with the approval of a new product, marking a breakthrough in the field [1] - The product, an injectable poly-L-lactic acid filler, is the first globally approved for use in the temporal region, and it is also the first approval in China for this specific application [1] - The product utilizes proprietary MEDBIOMA poly-L-lactic acid material and EvolaONE microsphere technology developed by Chengdu Yizhen, a subsidiary of Yizheng (Suzhou) Biotechnology Co., Ltd., in which Betaini holds a 15.73% stake [1] Group 2 - Analysts indicate that the approval of the core product of the invested enterprise signifies an important step for Betaini in building a skin health ecosystem through strategic investments and collaborations in the upstream biomaterials sector [2] - By strategically entering the upstream biomaterials field, Betaini is constructing a more layered and technically deep value chain for its long-term development in the skin health sector [2]

Core Insights - Betaini Group has made significant progress in the upstream medical beauty industry chain with the approval of a new product by its strategic investment, Yizheng (Suzhou) Biotechnology Co., Ltd, which holds 15.73% of its shares [1][4] - The approved product, an injectable poly-L-lactic acid filler, is the first of its kind globally to be approved for use in the temporal region, marking a milestone for the company and the industry in China [1][4] Group 1 - The product received a Class III medical device registration certificate from the National Medical Products Administration (NMPA), indicating its compliance with regulatory standards [1] - The filler utilizes proprietary MEDBIOMA® poly-L-lactic acid material and EvolaONE® microsphere technology developed by the company's core team [1][4] Group 2 - Chengdu Yizhen, founded by a team of scientists led by Dr. Zhang Xiaojin, focuses on the clinical transformation of absorbable biomaterials and has previously launched other Class III medical devices [4] - The approval of this core product signifies a strategic move by Betaini to enhance its value chain in skin health through investment and collaboration in the upstream biomaterials sector [4]

Market Overview - The cosmetics sector experienced a decline of 0.36% on January 15, with Shuiyang Co. leading the drop [1] - The Shanghai Composite Index closed at 4112.6, down 0.33%, while the Shenzhen Component Index closed at 14306.73, up 0.41% [1] Individual Stock Performance - Jinsheng New Material (300849) saw a significant increase of 13.17%, closing at 18.48 with a trading volume of 117,000 shares and a turnover of 209 million yuan [1] - Qingdao Kingway (002094) increased by 2.06%, closing at 8.42 with a trading volume of 1,113,500 shares [1] - Lafang Home (603630) rose by 1.76%, closing at 24.27 with a trading volume of 137,300 shares [1] - Other notable performances include Fulejia (301371) up 0.73%, Marubi Biological (603983) up 0.70%, and Betaini (300957) up 0.32% [1] Capital Flow Analysis - The cosmetics sector saw a net outflow of 11.86 million yuan from institutional investors and 53.27 million yuan from retail investors, while retail investors had a net inflow of 65.13 million yuan [2] - The capital flow for individual stocks indicates that Lafang Home had a net inflow of 77.73 million yuan from institutional investors, while Betaini had a net inflow of 14.81 million yuan [3] - Conversely, Shuiyang Co. experienced a net outflow of 5.39 million yuan from institutional investors [2][3]

Group 1 - The core viewpoint of the article highlights that Betaini is actively engaging in industrial investment and strategic layout through its subsidiary, Hainan Betaini Investment Co., Ltd [2] - The investment activities are closely aligned with the company's strategic direction focused on skin health ecology [2] - The investment scope includes over ten companies, such as Yuejiang (Guangzhou) Investment Co., Ltd. and Changsha Yujian Future Technology Co., Ltd [2]

Group 1 - The core viewpoint of the article is that Beitaini is actively engaging in investment activities that align with its strategic direction in skin health ecology [1] - Hainan Beitaini Investment Co., Ltd. is identified as a key platform for the company's industrial investment and layout [1] - The investment activities encompass over ten companies, including Yuejiang (Guangzhou) Investment Co., Ltd. and Changsha Yujian Future Technology Co., Ltd. [1]

Group 1 - The core viewpoint of the article is that Hainan Beitaini Investment Co., Ltd. is a significant platform for the company's industrial investment and strategic layout, focusing on skin health ecology [2] - The investment activities are closely aligned with the company's strategic direction in skin health, indicating a targeted approach to investment [2] - Hainan Beitaini has invested in over ten companies, including Yuejiang (Guangzhou) Investment Co., Ltd. and Changsha Yujian Future Technology Co., Ltd. [2]

Summary of China Cosmetics Sector Conference Call Industry Overview - The China cosmetics sector is expected to experience a reset for higher-quality growth in 2026, moving away from reliance on high-cost Key Opinion Leaders (KOLs) and focusing on popular core SKUs. This shift has led to a contraction in Net Profit Margin (NPM) due to deleveraging impacts, despite improvements in Return on Investment (ROI) [1][2]. Key Trends and Insights - **Consumer Acquisition Costs**: Monitoring new consumer acquisition costs will be critical, especially as channel migration benefits diminish and the ingredient cycle remains ambiguous. Anti-involution policies will also play a significant role [1]. - **Branding Strategy**: Branding is anticipated to be the most effective strategy for consumer engagement and new product launches in 2026. Companies with high repurchase rates and cost-efficient omni-channel strategies are better positioned for success [1][2]. - **Market Dynamics**: The cosmetics market is expected to grow at a normalized rate, with growth projected at less than 1x GDP growth. The market is forecasted to see a 2.1% increase in beauty spending in 2026, with a mix of onshore and offshore market performance [17][18]. Company-Specific Insights - **Mao Geping Cosmetics (MGP)**: Upgraded from Neutral to Buy with a target price increase from HK$89 to HK$105, reflecting a 27% upside. The company is noted for strong branding and a balanced channel presence, with a forecasted sales and net income CAGR of 23% and 22% from 2025 to 2027, respectively [2][9]. - **Giant Biogene**: Maintained as Buy, with a target price lowered from HK$71 to HK$46, indicating a 36% upside. The company is expected to recover with new skincare products and a focus on medical aesthetics, projecting sequential growth of -8%/+12%/+17% YoY for 1H26E/2H26E/2027E [2][9]. - **Shanghai Jahwa**: Target price reduced from RMB 31 to RMB 28, with a 22% upside. The company is on a turnaround trajectory with improving margins and cash flow [2][9]. - **Proya Cosmetics**: Remains Neutral as the company is expected to moderate organic growth while awaiting more execution on white space exploration [2][9]. - **Botanee Biotech**: Neutral rating with early signs of a potential turnaround but lacking clear growth drivers [2][9]. - **Bloomage Biotech**: Maintained as Sell due to downside risks in skincare and muted growth in medical aesthetics amid a mature product cycle [2][9]. Market Performance and Projections - **E-commerce Trends**: Tmall is expected to maintain strong growth momentum, supported by anti-involution measures. Douyin's performance has been softer than expected, with a significant decline in KOL channel performance [19][21]. - **Sales Growth Expectations**: The cosmetics sector is projected to see sustained GMV growth on Tmall, while Douyin is expected to experience a narrowing gap in growth rates compared to Tmall [20][21]. Conclusion - The China cosmetics sector is poised for a shift towards higher-quality growth in 2026, with branding and strategic channel management becoming increasingly important. Companies that adapt to these changes and focus on core products are likely to outperform in the evolving market landscape [1][2][19].

Core Insights - The announcement of Zhou Keyu as the skincare ambassador for Winona, a core brand of Betaini Group, reflects a strategic partnership aimed at enhancing professional value and brand image in the sensitive skin care market [1][3] Group 1: Brand and Market Positioning - Winona has been recognized as the top-selling brand in China's sensitive skin care market for five consecutive years (2020-2024), showcasing its strong market presence and professional credibility [4] - The collaboration between Winona and Zhou Keyu is rooted in a shared commitment to professional values, beauty, and health, indicating a long-term strategic vision for Betaini Group [3][4] Group 2: Strategic Development and Ecosystem - Betaini Group is transitioning from a single-brand operation to a multi-brand ecosystem, emphasizing sustainable growth and collaborative synergies among its brands [7][9] - Winona is evolving from a focus on sensitivity repair to a broader range of solutions addressing various sensitive skin needs, which supports the group's ecological expansion and enhances its market offerings [6][9] Group 3: Research and Innovation - Betaini Group's commitment to research and innovation is evident in its high R&D expenditure and the successful registration of new plant-based ingredients, which strengthens its competitive edge in the market [10][13] - The company has established a comprehensive research framework that integrates clinical insights and technological advancements, ensuring the continuous development of unique products [10] Group 4: Sustainability and Social Responsibility - Betaini Group integrates sustainability into its core operations, with initiatives such as ecological restoration in raw material sourcing and a product lifecycle responsibility program [13][15] - The company's long-standing commitment to social responsibility is exemplified by the "We Smile Sunshine Program," which provides skin health services in underserved areas, reinforcing its brand value and market trust [13][15] Group 5: Future Outlook - The strategic focus on building a tightly integrated ecosystem that fosters both internal collaboration and external partnerships is crucial for the long-term viability of Betaini Group [15] - The company's approach to leveraging its professional brand advantages and research capabilities positions it well for sustained growth in the evolving beauty industry [15]

Group 1 - The core point of the article is that Tianjin Sequoia Juye Equity Investment Partnership plans to reduce its stake in Yunnan Betaini Biotechnology Group Co., Ltd. by up to 2.8% within a specified timeframe [1] - As of the announcement date, Tianjin Sequoia holds approximately 32.27 million shares, representing 7.66% of the total shares of the company, which is approximately 421 million shares [1] - The planned reduction will occur through centralized bidding and block trading methods, with a maximum of about 11.8 million shares to be sold between February 3, 2026, and May 2, 2026 [1] Group 2 - The article also highlights advancements in agricultural technology, specifically the emergence of "plant factories" in China, which can produce rice with a yield 120 times greater than traditional fields [1] - The production cycle for rice has been reduced from 120 days to 60 days, eliminating the need for pesticides due to the absence of pests [1]