Investment Rating - The report does not explicitly provide an investment rating for the beauty industry Core Insights - The beauty industry is experiencing a significant shift with domestic brands gaining market share, while international brands like L'Oréal are facing challenges [4][6][10] - The medical beauty sector is expanding, with companies like Juzhi Biotech and Naturals launching innovative products, indicating a trend towards cross-industry collaboration [4][6] - The soap market is evolving with a focus on high-end products and natural ingredients, appealing to environmentally conscious consumers [6] - PDRN technology is transitioning from niche medical applications to mainstream skincare, enhancing product efficacy and market accessibility [6][10] - Hong Kong is emerging as a testing ground for domestic beauty brands aiming for global expansion, leveraging its mature market and tourism recovery [6][10] - The competitive landscape is intensifying, with domestic brands dominating the top rankings and new entrants disrupting traditional market dynamics [4][6][10] Industry Environment - L'Oréal has dropped out of the top 10 rankings in the Douyin beauty market, with domestic brands like Han Shu and Proya leading the charge [4] - The medical beauty market is projected to reach 370 billion by 2025, attracting investments from beauty companies [4] - The soap market is witnessing a shift towards premium products, with handmade soaps gaining traction among consumers [6] - PDRN technology is being adopted in mainstream skincare, with various brands innovating in formulations and applications [6] - Domestic beauty brands are increasingly focusing on international markets, with Hong Kong serving as a strategic entry point [6] Top Brand News - The domestic fragrance brand "Song Dynasty Fragrance" is rapidly expanding, with a unique dual strategy for online and offline sales [12] - Influencer Zhu Guagua has regained prominence in the Douyin beauty market, significantly impacting brand sales through effective marketing strategies [12] - Hermès is exploring the skincare segment, with plans to launch products post-2028, indicating a strategic move to enhance its beauty portfolio [12] - Yatsen Group has released China's first beauty innovation white paper, showcasing advancements in research and sustainable development [12] - Juyi Group has acquired the Italian brand Foltène to strengthen its position in the hair care market, reflecting a trend of consolidation among domestic beauty companies [12]

Core Viewpoint - Yatsen Holding Limited, a leading beauty group based in China, is set to release its unaudited financial results for the third quarter of 2025 on November 17, 2025, before the U.S. market opens [1]. Group 1: Financial Results Announcement - The financial results will be discussed in a conference call scheduled for November 17, 2025, at 7:30 A.M. U.S. Eastern Standard Time [2]. - The conference call will be accessible via multiple dialing options for U.S., international, and mainland China listeners [2]. - A live and archived webcast of the conference call will be available on the company's investor relations website [2]. Group 2: Company Overview - Yatsen Holding Limited was founded in 2016 and has launched and acquired several color cosmetics and skincare brands, including Perfect Diary, Little Ondine, Pink Bear, Galénic, DR.WU, and Eve Lom [4]. - Perfect Diary is highlighted as one of the leading color cosmetics brands in China based on retail sales value [4]. - The company engages with customers through both online and offline channels, maintaining a strong presence across major e-commerce, social, and content platforms in China [4].

Core Insights - The launch of the "Yatsen Group Beauty Innovation White Paper" marks a significant milestone for China's beauty technology, positioning it among the global leaders in research and development [1][3][5] Group 1: White Paper Overview - The white paper is the first of its kind in China, systematically outlining Yatsen Group's achievements in global research layout, technological innovation, efficacy verification, and sustainable development [3][5] - It serves as a window to showcase the company's R&D strategy, technological achievements, and future directions, reflecting the potential for world-class beauty innovation to emerge from China [5][12] Group 2: Industry Context - The Chinese cosmetics industry is currently in a critical phase of innovation-driven development, with the white paper providing valuable insights and foresight into future trends [7][9] - The release of the white paper is seen as a vital contribution to the ongoing transformation of the Chinese cosmetics industry, injecting new wisdom and vitality [7][9] Group 3: Research and Development Achievements - Yatsen Group has established a comprehensive "end-to-end" innovation system, integrating research, formulation development, efficacy validation, and manufacturing [18][20] - The company has invested over 600 million yuan in R&D since its NYSE listing in 2020, maintaining a R&D expense ratio exceeding 3% for three consecutive years, placing it among the top tier in the global beauty industry [17][20] Group 4: Product Innovations - The launch of the DR.WU PDRN Water Light Essence showcases the application of advanced technologies, including AI molecular docking and a patented delivery system, enhancing the efficacy of active ingredients [14][16] - The white paper highlights multiple innovative achievements, including the introduction of the Biotec™ technology, which integrates Nobel Prize-winning science into beauty products [16][18] Group 5: Financial Performance - Yatsen Group reported a revenue of 1.09 billion yuan for Q2 2025, a year-on-year increase of 36.8%, with a gross profit margin of 78.3% [21] - The skincare segment has shown remarkable growth, contributing 53.5% to total revenue, indicating the effectiveness of the company's R&D-driven growth strategy [21]

Core Viewpoint - Yatsen Group has officially launched the "Yatsen Group Beauty Innovation White Paper," marking a significant milestone in China's beauty technology innovation and positioning it among the global R&D leaders [2][4][5]. Group 1: White Paper Overview - The white paper is structured around "innovation" and consists of six major sections, detailing the group's global research layout, technological innovations, efficacy verification, and sustainable development [5]. - It serves as a summary of Yatsen Group's R&D achievements over the past few years and aims to showcase its research strategy, technological outcomes, and future directions to the industry and society [7][13]. Group 2: Industry Insights - The white paper reflects the current critical phase of innovation-driven development in China's cosmetics industry, providing insights into cutting-edge beauty technology and future trends [9]. - It is seen as a vital resource for fostering collaboration and innovation within the industry, especially during a period of transformation and upgrading [9]. Group 3: R&D Achievements - Yatsen Group's R&D investments and system construction have reached international standards, with a focus on translating research into consumer products, particularly in the field of acne treatment [11]. - The launch of the DR.WU PDRN Water Light Essence, which utilizes advanced technology to deliver medical-grade effects at home, exemplifies the company's commitment to innovation [15]. Group 4: Innovation Ecosystem - The company has established an efficient innovation ecosystem by integrating industry, academia, medicine, and basic research, supported by AI technology [17]. - Yatsen Group's open lab model promotes rapid translation of research outcomes into market-ready products, collaborating with various prestigious institutions [17][18]. Group 5: Financial Performance - Since its listing on the NYSE in 2020, Yatsen Group has consistently prioritized R&D, with cumulative R&D expenses exceeding 600 million yuan, maintaining a R&D expense ratio above 3% for three consecutive years [19][22]. - The company reported a revenue of 1.09 billion yuan for Q2 2025, a year-on-year increase of 36.8%, with a gross profit margin of 78.3% and skincare business revenue growth of 78.7% [22][23].

Core Insights - Yatsen Group has officially released the "Yatsen Group Beauty Innovation White Paper," emphasizing "innovation" as the main theme [1] Group 1: Research and Development - The white paper is divided into six major sections, systematically outlining the group's global research and development layout [1] - It presents a comprehensive view of Yatsen Group's strategic depth in Chinese beauty research and its international breadth [1] Group 2: Technological Innovation - The report details the company's achievements in technological innovation, efficacy verification, and sustainable development [1] - It highlights the systematic results of the group's efforts in these areas [1]

Core Viewpoint - Chinese beauty brand Perfect Diary is not only chasing trends but is also leading them, reshaping the global beauty landscape through technology-driven innovation and cultural resonance [5]. Group 1: Technological Advancements - Perfect Diary has made significant breakthroughs in the "makeup-nourishing technology" field, with the third-generation bionic membrane technology (Biotec™) being a core driver of the brand's growth [7]. - The third-generation technology integrates five Nobel Prize-related technologies and has resulted in seven core patents, showcasing a systematic research iteration framework [7]. - The "Bionic Membrane Essence Lipstick," utilizing this technology, has sold over 6 million units globally, generating over 800 million RMB in sales, making it the top-selling lipstick brand in China [10]. Group 2: Global Recognition and Cultural Integration - Perfect Diary showcased its third-generation technology at the International Federation of Societies of Cosmetic Chemists (IFSCC) in September 2025, marking a shift from one-way technology releases to two-way academic dialogue [8]. - The brand participated in the "Paris Partners" program, gaining international recognition for its bionic membrane technology and makeup aesthetics [14]. - A collaboration with the animated IP "Nezha: Birth of the Demon Child" resulted in a beauty series that embodies the spirit of innovation and cultural identity [18][19]. Group 3: Consumer-Centric Innovations - The launch of the "Bionic Membrane™" star set, which includes a bionic membrane essence lipstick, foundation, and cream, aims to provide consumers with a comprehensive makeup-nourishing solution [21]. - An immersive exhibition titled "Change Scene Without Changing Makeup" was held to demonstrate the practical effects of the star set in daily life, showcasing the modernized expression of Eastern beauty aesthetics [23]. - Perfect Diary has established itself as a trendsetter by releasing the first "makeup-nourishing" research report in 2024 and collaborating with "ELLE" to publish insights on global beauty trends in 2025 [23]. Group 4: Industry Impact and Future Outlook - The brand's approach combines technological strength, cultural resonance, and standardized systems to build industry authority, reflecting the broader narrative of Chinese beauty brands moving towards globalization [24]. - The transformation from "Made in China" to "Created by China" signifies a pivotal moment for Chinese beauty brands, gaining global visibility and respect [24].

Market Performance - The three major U.S. stock indices collectively rose, with the Dow Jones up 0.6%, S&P 500 up 1%, and Nasdaq up 1.32% [1] - The Philadelphia Semiconductor Index surged over 3%, with notable gains from companies like Supermicro (up over 8%) and Kioxia (up over 6%) [2] Technology Sector Highlights - Apple officially launched its M5 chip, which utilizes a third-generation 3nm process, achieving over four times the peak performance in AI computing compared to the previous M4 chip [2] - The M5 chip is now integrated into the new 14-inch MacBook Pro, iPad Pro, and Apple Vision Pro, with pre-orders already open [2] Chinese Stocks Performance - The Nasdaq Golden Dragon China Index rose over 2%, with significant increases from New Oriental and WeRide, both up over 7% [3] - Major Chinese tech stocks like Alibaba, JD.com, and Baidu also saw gains of over 2% [3] Commodity Market - Spot gold prices exceeded $4,210 per ounce, marking a new historical high with a year-to-date increase of over 60% [5] - Spot silver prices broke through $53 per ounce, also reaching a new historical high [5] Cryptocurrency Market - Bitcoin rose to $113,451.1, with a 24-hour increase of 1.35%, while Ethereum reached $4,202.2, up 5.18% in the same period [6]

Market Overview - The three major U.S. stock indices collectively rose, with the Dow Jones up 0.6%, the S&P 500 up 1%, and the Nasdaq up 1.32% [1] - The Philadelphia Semiconductor Index surged over 3%, with notable gains from companies like Supermicro Semiconductor (up over 8%) and Kioxia Semiconductor (up over 6%) [3] Technology Sector - Apple officially launched its M5 chip, utilizing third-generation 3nm technology, which boasts over four times the peak performance in AI computing compared to the previous M4 chip [3] - The M5 chip is now integrated into the new 14-inch MacBook Pro, iPad Pro, and Apple Vision Pro, with pre-orders already open [3] Chinese Stocks - The Nasdaq China Golden Dragon Index rose over 2%, with significant increases in stocks such as New Oriental and WeRide, both up over 7% [3][4] - Major Chinese tech stocks like Alibaba, JD.com, and Baidu also saw gains of over 2% [3] Commodities - Spot gold prices exceeded $4,210 per ounce, marking a historical high with a year-to-date increase of over 60% [5] - Spot silver prices also reached a new high, surpassing $53 per ounce [5] Federal Reserve Insights - Federal Reserve Chair Jerome Powell indicated a strong likelihood of a rate cut later in October, citing concerns over the labor market cooling [5][6] - Powell's remarks suggest that the Fed is adopting a cautious approach to avoid unnecessary harm to employment while managing inflation risks [7] Economic Data Impact - The ongoing U.S. government shutdown has delayed the release of key economic data, including September's non-farm payroll and inflation figures, which may complicate the economic outlook [6][7] - Market sentiment is influenced by concerns over employment, economic growth, and the potential impact of new tariffs from the Trump administration [7]

Core Insights - Yatsen E-commerce has officially released its 2024 Environmental, Social, and Governance (ESG) report, marking the fourth consecutive year of proactive ESG disclosure [1] Group 1: Carbon Emissions and Management - In 2024, Yatsen E-commerce completed carbon accounting for Scope 1, 2, and 3, with a total carbon emission of 1,773.46 tons of CO2 equivalent, representing a year-on-year decrease of 61.7% [1] - The company’s core manufacturing facility, Yatsen Biotechnology (Guangzhou), has implemented green practices, including the launch of a distributed photovoltaic power generation project with an installed capacity of 2,324.34 kWp, generating an annual electricity output of 205.25 million kWh, equivalent to an annual CO2 reduction of 1,785.68 tons [1] Group 2: Energy Efficiency Initiatives - The Guangzhou factory has introduced a smart energy management system (EMS) to monitor and control energy consumption in real-time, achieving a total electricity saving of 146,000 kWh in 2024 [1]

Core Insights - The 35th IFSCC International Congress on Cosmetic Science, known as the "Nobel Prize of the cosmetics industry," opened in Cannes, France, focusing on the theme "the Future is science" and gathering top global research forces to discuss breakthroughs and future trends in cosmetic science [1][15] - Yatsen Group, representing Chinese beauty brands for the fourth consecutive year, achieved a historic high by having 11 high-quality research papers accepted, more than doubling last year's submissions, showcasing its leadership in the domestic beauty industry [1][3][15] Research Breakthroughs - The IFSCC Congress received 1,167 submissions, with 730 papers presented as posters, highlighting the competitive nature of the event. Notably, submissions from China saw both quantity and quality improvements, with poster numbers leading globally, reflecting the rise of Chinese research capabilities and international influence [3] - Yatsen Group's 11 accepted papers cover a comprehensive range of research from molecular mechanisms to clinical translation, demonstrating a closed-loop research capability from foundational studies to clinical validation [3][4] Brand Innovations - Yatsen Group's brands, including Perfect Diary, DR.WU, Galénic, EVE LOM, and 瑞科护, showcased cutting-edge research in four core areas: biotechnology, scientific skincare, emotional skincare, and skin data expertise [2][6] - Perfect Diary introduced the third-generation Biotec bionic film technology, utilizing five Nobel Prize-related technologies, and presented a study on the efficacy and safety of its bionic film essence lipstick for Chinese women's sensitive lips [6][8] - DR.WU highlighted its research on the effectiveness of its almond acid essence for acne management, demonstrating significant results in preventing acne recurrence within four weeks [8][9] Scientific Contributions - Galénic presented research on the new mechanisms of vitamin C in skin biology and its applications in anti-aging products, while EVE LOM introduced innovative emotional skincare technologies that integrate AI and neuroscience to enhance emotional well-being [9][10] - Yatsen Group's collaboration with 瑞金医院 led to the development of a new skincare product that significantly improves skin oxygen levels, demonstrating the practical application of their research [9] Global Recognition - Yatsen Group released its first "Yatsen Group Beauty Innovation White Paper," receiving high praise from international experts, marking a significant step in showcasing Chinese beauty innovation on a global stage [11][12] - The group was awarded the "Honorary Gold Medal Strategic Partner" title at the IFSCC Congress, reflecting its commitment to systematic research and innovation in the beauty industry [12][13] Future Aspirations - Yatsen Group aims to continue its development as a "world-class beauty innovation pioneer," having invested over 600 million yuan in R&D since 2020, maintaining a research expense ratio above 3% for three consecutive years [13][14] - The group is set to host the 2032 IFSCC Congress in Shanghai, further solidifying its role in the global beauty industry and fostering international collaboration [14][15]