Core Viewpoint - Cathay Securities initiates coverage on Lin Qingxuan (02657) with a "Buy" rating, highlighting the company's long-standing focus on oil-based skincare and its potential for sustained rapid growth driven by Douyin and product expansion [1] Group 1: Company Overview - Lin Qingxuan, founded in 2003, initially focused on natural skincare products like handmade soaps and aloe vera gel, and launched its flagship product, camellia oil essence, in 2014, establishing itself as a pioneer in oil-based skincare [1] - The company has a stable and experienced management team, and has recently accelerated its online transformation, with significant growth in revenue and net profit in the first half of 2025, achieving 10.5 million and 1.8 million RMB respectively, representing year-on-year increases of 98% and 110% [1] Group 2: Market Position and Growth Potential - The oil-based skincare segment is experiencing high demand, with the market size projected to reach 5.3 billion RMB in 2024, reflecting a year-on-year growth of 43% and a CAGR of 42% from 2019 to 2024 [2] - Lin Qingxuan has maintained a leading position in the facial essence oil category, holding a 12.4% market share in 2024, significantly ahead of other brands [2] Group 3: Sales and Distribution Channels - The company's flagship product, the camellia oil essence, has seen rapid growth, with revenue from this category increasing by 176% year-on-year in the first half of 2025, accounting for 46% of total revenue [3] - Online sales have surged, with Douyin driving a 137% year-on-year increase in online revenue, which now constitutes 65% of total sales; the company also has over 554 physical stores, indicating substantial room for further expansion [3]