Investment Rating - The report does not explicitly provide an investment rating for the beauty industry Core Insights - The beauty industry is experiencing a significant transformation driven by cultural marketing, technological advancements, and evolving consumer preferences [3][5][6] - The Chinese beauty market is projected to exceed 1.1 trillion yuan by 2025, with a notable increase in domestic brands gaining market share [6][8] - The rise of independent fragrance brands is reshaping the market, with a 46.3% sales growth in the independent segment compared to traditional brands [6][8] Industry Trends - Young consumers are increasingly drawn to modern bathhouses, which have evolved into comprehensive entertainment venues, leading to a surge in spending [3] - The beauty sector is witnessing a cultural marketing trend centered around the "horse" element, with brands leveraging emotional connections and innovative ingredients [5] - The competitive landscape is marked by a significant number of brand eliminations, with nearly 27,000 brands expected to be phased out in 2025 [6] - The independent fragrance market is growing rapidly, with independent brands capturing 29% of the market share, significantly outpacing traditional brands [6] - The beauty industry is shifting from a focus on growth to a more rational development phase, emphasizing quality and brand recognition [6][8] Top Brand News - Off&Relax has launched a new hair care line specifically designed for Asian hair, utilizing a unique "dual-axis core" repair system [10] - HBN, a domestic efficacy skincare brand, is preparing for an IPO, aiming to become the first "true efficacy skincare brand" in China [11] - LVMH is investing in high-end fragrance brands, indicating a strategic focus on innovation within the luxury segment [12] - The sensitive skin market is projected to grow significantly, with brands like Pianzihuang leveraging traditional Chinese ingredients to cater to local consumer needs [13] - The ODM leader, Norsbel, is focusing on high-quality development and digital transformation to support domestic brands in the beauty industry [14]

Core Viewpoint - HBN, a rising skincare brand in China, is preparing for an IPO on the Hong Kong Stock Exchange, aiming to capitalize on the growing trend of domestic consumer brands going public [1][2]. Company Overview - HBN, founded in 2019, focuses on effective skincare products, particularly promoting the "Morning C, Evening A" concept, which emphasizes using vitamin C in the morning and retinol at night [2][4]. - The brand has quickly gained popularity, becoming one of the youngest brands in the top ten domestic skincare market, achieving significant sales growth within a short period [1][4]. Financial Performance - HBN's revenue reached approximately 19.48 billion RMB in 2023, with projections of 20.8 billion RMB in 2024 and 15.14 billion RMB for the first three quarters of 2025 [8]. - The net profit for the same periods was 38.8 million RMB, 129 million RMB, and 145 million RMB, indicating a substantial increase in net profit margin from 1.9% to 9.6% [8]. - The brand's average repurchase rates on platforms like Tmall and Douyin are around 35.4% and 44.0%, respectively, with over 4.6 million cumulative repurchase users [8]. Product and Market Position - HBN's product lines include anti-aging and daily skincare products, with prices ranging from 129 RMB to 689 RMB [6]. - The brand is ranked fourth among domestic mid-to-high-end skincare brands and is the largest domestic brand in the improvement skincare segment [8]. Business Structure and Risks - HBN's revenue is heavily reliant on a few key products, which accounted for nearly 40% of sales, raising concerns about business sustainability [9]. - The company has a high concentration of online sales, with online revenue accounting for over 95% in recent years, indicating limited diversification in sales channels [9][10]. Investment and Shareholding - Prior to the IPO, HBN's founders held a combined 76.19% voting power, with significant external investment from Meitu, which holds 23.81% of the shares [5]. - The company recently declared a cash dividend of 100 million RMB, with a portion already paid out, benefiting the founders significantly [5]. Industry Context - The trend of consumer brands going public in Hong Kong is accelerating, with numerous companies filing for IPOs, indicating a competitive environment for HBN [12][13]. - The Hong Kong Stock Exchange is experiencing a surge in IPO applications, with over 350 companies in the queue, highlighting the urgency for HBN to finalize its listing [16].

Core Viewpoint - HBN, a rising skincare brand in China, is preparing for an IPO on the Hong Kong Stock Exchange, aiming to capitalize on the current trend of domestic consumer brands going public [4][5]. Company Overview - HBN's parent company, Shenzhen Hujia Technology (Group) Co., Ltd., has submitted its IPO application, with Morgan Stanley and CICC as joint sponsors [4]. - Founded by a couple from Guangdong, HBN has quickly gained popularity in the skincare market, particularly with its "Morning C, Evening A" skincare philosophy [5][7]. - The brand has achieved significant revenue growth, entering the 2 billion to 4 billion RMB revenue tier within four years of its establishment [7][12]. Financial Performance - HBN's revenue for the first three quarters of 2023, 2024, and 2025 was 1.948 billion, 2.082 billion, and 1.373 billion RMB respectively, with net profits of 38.8 million, 129 million, and 145 million RMB, showing a net profit margin increase from 1.9% to 9.6% [12][14]. - The brand's product lines include both improvement-type and maintenance-type skincare products, with the former accounting for approximately 80% of revenue [12][13]. Market Position - HBN ranks fourth among domestic mid-to-high-end skincare brands in China, and it is the largest domestic brand in the improvement-type skincare market [12]. - The brand's average repurchase rates on platforms like Tmall and Douyin are approximately 35.4% and 44.0%, respectively, indicating strong customer loyalty [12]. Business Structure and Risks - HBN's revenue is heavily reliant on a few key products, which accounted for nearly 40% of sales, raising concerns about business vulnerability [13]. - The company's sales channels are predominantly online, with online revenue accounting for over 95% in recent years, while offline revenue remains below 1 billion RMB [13][14]. - Marketing expenses are high, with over 50% of revenue spent on marketing, while R&D investment has decreased, leading to questions about the sustainability of its competitive edge [14][15]. Industry Context - The current IPO climate in Hong Kong is competitive, with many consumer brands rushing to list, reflecting a broader trend of domestic companies seeking capital through public offerings [16][18]. - The Hong Kong Stock Exchange has over 350 companies in the IPO pipeline, indicating a robust interest in market entry despite regulatory challenges [18].

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Insights - The report highlights the emergence of HBN, a leading domestic skincare brand, which has submitted its prospectus to the Hong Kong Stock Exchange, indicating strong growth potential in the efficacy skincare market [3][24] - The report emphasizes the importance of emotional consumption themes and recommends high-quality companies in high-growth sectors, including gold and jewelry, offline retail, cosmetics, and medical aesthetics [6][49] Summary by Sections Retail and Social Services Market Review - For the week of January 26 to January 30, the retail and social services indices closed at 2435.34 points and 9283.84 points, respectively, with declines of 4.18% and 3.45% [5][14] - The jewelry sector showed the highest growth, with a weekly increase of 7.07% and a year-to-date increase of 19.39% [15][18] Industry Dynamics: HBN and Efficacy Skincare - HBN, established in 2019, is the largest domestic skincare brand in the efficacy segment, focusing on visible results and innovative product strategies [24][25] - The brand's core products, including the "A Retinol" series, have achieved significant sales milestones, with a strong emphasis on scientific validation and consumer trust [29][33] Investment Recommendations - Investment focus areas include: - Gold and jewelry brands with differentiated product offerings, recommending companies like Laopuhuang and Chaohongji [6][49] - Offline retail companies adapting to market changes, with recommendations for Yonghui Supermarket and Aiyingshi [6][49] - Domestic cosmetics brands that emphasize emotional value and safety, recommending brands like Maogeping and Proya [6][50] - Medical aesthetics firms with unique product lines, recommending Meilitiantian Medical Health and Aimeike [6][51]

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Insights - The report highlights the emergence of HBN, a leading domestic skincare brand, which has submitted its prospectus to the Hong Kong Stock Exchange, indicating strong growth potential in the efficacy skincare market [3][24] - The report emphasizes the importance of emotional consumption themes and suggests focusing on high-quality companies in high-growth sectors [6][49] Summary by Sections Industry Performance Overview - The commercial retail and social services indices reported declines of 4.18% and 3.45% respectively during the week of January 26 to January 30, 2026, ranking 26th and 23rd among 31 primary industries [5][14] - The jewelry sector showed the highest growth, with a weekly increase of 7.07% and a year-to-date increase of 19.39% [15][18] Key Industry Developments - HBN, established in 2019, is recognized as the largest domestic skincare brand in the efficacy skincare segment, with a market share of 0.8% in the Chinese improvement skincare market as of 2024 [24][25] - HBN's revenue for the first three quarters of 2025 reached 1.51 billion yuan, a year-on-year increase of 10.2%, with high-efficacy skincare products accounting for 78.6% of total revenue [29] Investment Recommendations - Investment Theme 1: Focus on high-end gold and fashion jewelry brands, recommending companies like Laopuhuangjin and Chaohongji [6][49] - Investment Theme 2: Highlighting retail companies that adapt to emotional value and intelligent trends, with recommendations for Yonghui Supermarket and Aiyingshi [6][49] - Investment Theme 3: Emphasizing beauty and personal care brands that innovate with emotional value and safe ingredients, recommending brands like Maogeping and Pola [6][50] - Investment Theme 4: Targeting differentiated medical beauty product manufacturers and leading medical beauty institutions, recommending companies like Aimeike and Meilitiantian [6][51]

Core Viewpoint - The skincare brand Zhenyan Bio, which is preparing for an IPO on the Beijing Stock Exchange, has not kept pace with industry expansion despite its early entry into the market. The company has struggled to transition from a hospital-backed brand to a mainstream consumer brand, resulting in a significant gap in market presence and financial performance compared to leading competitors [1][9]. Financial Performance - Zhenyan Bio's revenue is projected to grow from 486 million yuan to 597 million yuan from 2023 to 2024, representing a year-on-year increase of approximately 22.8%. However, its net profit is expected to grow by only 7%, reaching 73 million yuan [2]. - In contrast, leading companies like Winona and Juzibio have already surpassed the 1 billion yuan revenue mark, indicating a structural gap in financial scale [2]. Market Share - Zhenyan Bio's market share in the skin barrier repair medical dressing market has remained below 4% from 2021 to 2023, failing to capitalize on the market's increasing fragmentation and heightened competition [2]. - While competitors like Juzibio and Fuyoujia have seen their market shares decline, Zhenyan Bio has not gained any significant market share during this period [2]. Channel Strategy - The company's sales system still reflects characteristics of an "in-hospital brand," with a high reliance on offline channels, including hospitals and OTC pharmacies, which accounted for 58.91% of total revenue in the past year [7]. - Zhenyan Bio has begun to adjust its channel structure, with the proportion of revenue from distribution decreasing to 44.88% as it shifts towards online direct sales and consignment [7]. Brand Positioning - Zhenyan Bio has launched sub-brands like "Zhenxiaoyan" for infant skincare and "Defilin" for bioactive compounds, but these attempts are still in the early stages and lack significant market presence [8]. - The company has not established a clear differentiation in product functionality, pricing, and brand positioning compared to competitors, limiting its ability to gain market traction [4][8]. Future Outlook - The company's challenges stem from its failure to upgrade its business model at critical stages, missing opportunities for channel transformation and brand amplification [9]. - The decision to pursue an IPO is seen as a strategy to secure time and resources for future transformation, although the window for catching up with competitors is narrowing [9].

Core Viewpoint - Filorga, a French skincare brand, will close its Tmall flagship store on January 31, 2026, due to a strategic adjustment, indicating a planned channel shift rather than a sudden decision [1][3]. Group 1: Market Context - Filorga's decision is part of a broader trend where foreign brands are withdrawing or scaling back in the Chinese beauty market, with over 20 foreign brands exiting or significantly reducing their presence in 2025 [3][12]. - The Chinese beauty market is still important but is perceived as less profitable, prompting multinational companies to reassess their operational strategies [4][15]. Group 2: Brand Performance - Despite having over 3 million followers on Tmall, Filorga's closure does not indicate poor sales performance; rather, it reflects a shift in market dynamics where effective growth is becoming more challenging [3][12]. - Filorga has successfully transitioned from a niche professional brand to a more mainstream consumer brand, leveraging its strong product offerings [5][18]. Group 3: Operational Challenges - The skincare market in China has evolved, with efficacy claims becoming a baseline expectation, leading to increased costs for foreign brands in terms of education, content creation, and marketing [6][15]. - The complexity of operating on platforms like Tmall has increased, requiring brands to invest more in content, live streaming, and customer retention, which raises operational costs [8][9]. Group 4: Strategic Shift - Filorga's closure of its Tmall store is a strategic move to prioritize efficiency, as maintaining a presence on complex platforms demands significant local investment [8][11]. - The brand's decision reflects a broader trend among foreign brands to focus on selective deepening in markets where they can maintain profitability, rather than spreading resources too thinly [17][21]. Group 5: Future Outlook - The closure does not signify a loss of demand for efficacy skincare but rather a recalibration of strategies in a maturing market where profitability and sustainable growth are prioritized [18][19]. - The Chinese market is transitioning from a "must-participate growth battlefield" to a "mature market requiring careful calculation of input and output" for foreign beauty brands [21].

Investment Rating - The report indicates a positive outlook for the cosmetics raw materials industry, highlighting the stable growth of the downstream cosmetics sector and the leading positions of companies like Weiqi Technology and Jiakai Biological [1]. Core Insights - The cosmetics raw materials industry in China is projected to grow from CNY 1,147.80 billion in 2019 to CNY 1,603.90 billion by 2024, with a compound annual growth rate (CAGR) of 6.9% [2][12]. - The peptide active ingredients market is expected to grow from CNY 11.2 billion in 2019 to CNY 21.7 billion by 2024, achieving a CAGR of 14.1% [2][16]. - The plant extract raw materials market is anticipated to increase from CNY 204.5 billion in 2019 to CNY 270.2 billion by 2024, with a CAGR of 6.5% [2][20]. - Weiqi Technology holds a 6.6% market share in the peptide raw materials sector, ranking first in China [2][25]. - Jiakai Biological has established a leading position in the plant extract efficacy raw materials field, with significant revenue growth [2][33]. Summary by Sections 1. Growth of the Cosmetics Raw Materials Industry - The cosmetics raw materials market in China is expected to reach CNY 1,604 billion by 2024, driven by the stable growth of the cosmetics industry [2][5]. - The global cosmetics market is projected to reach USD 550.3 billion in 2024, with China being the largest market [5][8]. 2. Performance of Weiqi Technology and Jiakai Biological - Weiqi Technology's revenue for the first half of 2025 is CNY 132 million, a year-on-year increase of 34.6%, with a net profit of CNY 40.2 million, up 68.76% [2][30]. - Jiakai Biological's revenue for the first three quarters of 2025 is CNY 195 million, reflecting a year-on-year growth of 7.91%, with a net profit of CNY 47.3 million, up 16.91% [2][37]. 3. Market Trends and Valuation - The median price-to-earnings (P/E) ratio for the North Exchange consumer service sector increased to 50.1X, indicating a slight upward trend [2][50]. - The total market capitalization of consumer service companies on the North Exchange rose from CNY 1,096.29 billion to CNY 1,152.85 billion [2][43]. 4. Competitive Landscape - The cosmetics raw materials industry is characterized by a low concentration, with many small-scale companies primarily serving domestic mid-to-low-end markets [2][12]. - The demand for active ingredients, particularly peptides, is growing rapidly, driven by consumer preferences for effective skincare products [2][15].

Core Insights - The SIA2025 Scientific Skincare Innovation Alliance Annual Conference was held in Shanghai, attracting over a thousand participants from the skin health industry, including leaders and experts from various sectors [1] - The "SIA100 Scientific Product and Technology Achievement Collection" results were announced, showcasing significant improvements in the scale and quality of selected products compared to the previous year [1] - The brand hfp (HomeFacialPro) received recognition for its two products, the AHA Pore Purifying Essence and the Dual-Phase Moisturizing Oil Cream, highlighting its strength in efficacy skincare [1] Company Overview - hfp, established in 2014, focuses on ingredient-driven skincare solutions tailored for young consumers, promoting ingredient education in the domestic skincare market [2] - The company operates a large R&D center, hfp lab, which has invested over 100 million in resources, collaborating with various research institutions to advance the understanding of new ingredients [2] - hfp lab features 13 functional laboratories and meets international CNAS certification standards, ensuring that every product's efficacy is measurable and perceivable [2] Product Innovations - The AHA Pore Purifying Essence targets oily skin issues, utilizing a three-generation AHA formula to effectively clear pores and improve skin conditions like blackheads and acne [3] - The product incorporates innovative ingredients such as bifida ferment and centella asiatica extract, ensuring a gentle yet effective experience for users [3] - The Dual-Phase Moisturizing Oil Cream combines nourishing oils and a repairing cream to address dry and sensitive skin, featuring a blend of nine plant oils and a five-dimensional moisturizing combination [3] Market Position - The AHA Pore Purifying Essence has sold over 4 million bottles, maintaining the top sales position in the national AHA skincare e-commerce market for three consecutive years, reflecting its strong market presence [3] - hfp continues to adapt to changing consumer needs by launching products like the "Dual-Phase Bubble Cream" to provide targeted solutions for seasonal skincare challenges [3][4] Future Directions - The recognition of hfp's products underscores the brand's commitment to its philosophy of "Letting Ingredients Touch the Skin" and its ongoing exploration of ingredient boundaries [4] - The company aims to further promote ingredient education in the domestic skincare market, embedding this concept into more consumers' minds [4]

Core Viewpoint - The news indicates that Shenzhen Hujia Technology (Group) Co., Ltd., the parent company of the emerging domestic beauty brand HBN, is preparing for an IPO, which has attracted significant attention in the investment and cosmetics industries. The company has completed its shareholding reform, but there is no clear IPO plan yet [1][4]. Company Overview - HBN was founded by Yao Zhenan, who has a background in art design and experience in market operations and user insights. The brand focuses on the high-tech field of retinol anti-aging skincare [5][10]. - HBN's product lines include anti-aging, brightening, and other skincare categories, with a total sales exceeding 7 billion yuan by April 2025. The brand has gained significant traction on platforms like Tmall and Douyin [10][11]. Market Position and Strategy - HBN has established itself as a representative of domestic retinol skincare, leveraging scientific communication strategies to build a professional image and capture consumer attention [7][10]. - The brand has expanded its product offerings beyond retinol to include sunscreen and other effective skincare products, demonstrating a proactive approach to market demands [11][13]. IPO Preparation and Industry Trends - The company's shareholding reform is seen as a preparatory step for an IPO, aimed at optimizing its equity structure and governance system, which could enhance its attractiveness to potential investors [13][14]. - The trend of domestic beauty brands pursuing shareholding reforms or IPOs reflects a shift from rapid growth to more refined operations within the industry, indicating a response to regulatory requirements and the need for capital in a tightening financing environment [14].