Core Viewpoint - The domestic beauty brand leader Proya has experienced a significant decline in quarterly performance, with a sharp drop in both revenue and net profit, indicating potential challenges ahead for the company [2][5]. Financial Performance - Proya's Q3 revenue was 1.736 billion yuan, a year-on-year decrease of 11.63%, while net profit fell to 227 million yuan, down 23.64%, marking the largest quarterly decline in recent years [3][5]. - The basic earnings per share for Q3 was 0.57 yuan, reflecting a 24% decrease, which is greater than the declines in revenue and net profit [6]. - For the first three quarters, total revenue reached 7.098 billion yuan, a slight increase of 1.89%, and net profit was 1.026 billion yuan, up 2.65%, indicating a significant slowdown in growth compared to the previous year [6]. Brand Performance - Proya's main brand showed signs of stagnation, with a revenue of 3.979 billion yuan in the first half of the year, a slight decline of 0.08%, marking the first negative growth in five years [8]. - The main brand accounted for 74.27% of total revenue, and its growth stagnation has directly impacted overall performance [8]. Marketing and R&D Expenditure - High marketing expenses have been a key factor affecting profits, with sales expenses in the first half of 2025 reaching 2.659 billion yuan, resulting in a sales expense ratio of 49.59% [9]. - The marketing strategy heavily relies on online channels, which has led to increased customer acquisition and sales costs due to diminishing internet traffic benefits and intensified competition [9]. - In contrast, R&D investment remains low, with only 95 million yuan spent in the first half of 2025, resulting in an R&D expense ratio of just 1.77%, significantly lower than marketing expenses [9][10]. Future Plans - Proya is actively pursuing a listing in Hong Kong, having submitted an application to the Hong Kong Stock Exchange, with plans to issue H-shares not exceeding 15% of the total share capital post-issuance [12][14]. - The funds raised will be allocated towards R&D and product innovation, brand building, supply chain enhancement, and global expansion, among other strategic investments [14][15].