Summary of the Conference Call for Shangmei Co., Ltd. Company Overview - Shangmei Co., Ltd. is a research-driven cosmetics brand management company with over 20 years of operational history. The company's vision is to become an influential global cosmetics company, focusing on a "single focus, multi-brand, globalization" strategy. [3][4] Financial Performance - In 2025, the company achieved a revenue of 9.178 billion (up 35.1%) and a net profit of 1.154 billion (up 43.7%). The gross margin increased to 76.43%, and the return on equity (ROE) reached 40.2%. [2][7] - The company maintained a revenue and profit growth guidance of 25% for 2026, despite facing a public relations crisis in early 2026. [18] Brand Performance - **Han Shu**: Revenue in 2025 reached 7.36 billion (up 31.6%). The brand aims to achieve sales of 10-20 billion by 2030. [2][9] - **New Page**: Experienced explosive growth of 134.2%, reaching 880 million in revenue. [2][9] - **Anmi You**: Revenue in 2025 was 198 million (up 62.7%), with expectations to grow to 3-5 billion in the coming years. [9][21] - **Red Elephant**: Sales decreased due to demographic changes and brand adjustments. [9] Market Strategy - The company is shifting its channel structure towards online sales, which accounted for 93.9% of total sales in 2025. [2][8] - The company plans to expand into Southeast Asia with a localized strategy, having built a factory in Indonesia and set to start sales in 2026. [2][6] Product Development and Innovation - R&D investment reached 225 million (up 24%), focusing on proprietary ingredients like KT-939 for skin whitening. [2][7] - The company has established an AI-driven factory in Shanghai, capable of producing 2 million bottles daily. [4] Brand Matrix and Future Goals - The company has structured its brands into three tiers to mitigate risks: - **First Tier**: Han Shu (10-20 billion target) - **Second Tier**: Brands like New Page and Anmi You (2-8 billion target) - **Third Tier**: Brands like Red Elephant and Codemint (0-2 billion target) [5] Challenges and Recovery - Following a public relations crisis, Han Shu's business has stabilized and returned to positive growth by March 2026. [11][18] - The company is focusing on a "Five Good Strategy" for 2026, emphasizing good branding, ingredients, products, pricing, and experiences. [11] Trends and Future Product Launches - The company observes trends towards high efficacy and emotional value in products, with plans to launch new brands like Hello Kitty and collaborations with medical professionals. [15][16] - The company aims to expand its product lines to cover a broader age range, targeting 0-18 years and beyond. [13][22] Conclusion - Shangmei Co., Ltd. is positioned for significant growth with a robust multi-brand strategy, strong financial performance, and a commitment to innovation and market expansion. The company is adapting to market challenges while maintaining a focus on long-term goals and brand development. [17][24]

Investment Rating - The report maintains a "Buy" rating for Anta (2020 HK) with a target price of HKD 108.70, indicating a potential upside of 43.5% from the current price of HKD 75.75 [1][2][7]. Core Insights - Anta's revenue for 2025 is projected to grow by 13.3% year-on-year to RMB 80.22 billion, with net profit expected to increase by 13.9% to RMB 13.59 billion, slightly exceeding previous expectations [6][7]. - The company's operational efficiency has shown resilience, with an operating profit margin improvement of 0.4 percentage points to 23.8% despite a slight decline in gross margin [6][7]. - Anta's long-term strategy of "single focus, multi-brand, globalization" remains unchanged, aiming to solidify brand assets and capture greater market share during the industry recovery cycle [6][7]. Financial Summary - Revenue projections for Anta are as follows: - 2024: RMB 70.83 billion - 2025: RMB 80.22 billion - 2026E: RMB 86.10 billion - 2027E: RMB 91.89 billion - 2028E: RMB 97.33 billion - Year-on-year growth rates are expected to be 13.6% for 2024, 13.3% for 2025, 7.3% for 2026, 6.7% for 2027, and 5.9% for 2028 [5][10]. - Net profit forecasts are as follows: - 2024: RMB 15.60 billion - 2025: RMB 13.59 billion - 2026E: RMB 13.93 billion - 2027E: RMB 14.90 billion - 2028E: RMB 16.05 billion [5][18]. Brand Performance - Anta brand revenue is expected to grow by 3.7% year-on-year, while FILA is projected to see a 6.9% increase, focusing on high-end sports fashion [6][7]. - Other brands under Anta have shown strong growth, with a 59.2% increase in revenue, highlighting the resilience of the multi-brand strategy [6][7].

Group 1 - The core viewpoint of the articles highlights Anta Sports' resilience and growth, achieving a revenue increase of 13.3% to RMB 80.219 billion for the year ending December 31, 2025, and a 13.9% rise in shareholder profit to RMB 13.588 billion, despite a complex macro environment and ongoing industry competition [1] - Anta Sports' market share in the Chinese sports goods market increased to 21.8% in 2025 from 20.8% in 2024, maintaining its leading position in the industry and ranking among the top three globally [1] - The company emphasizes a "single focus, multi-brand, globalization" strategy, responding to the shift in consumer behavior towards professional and scenario-based sports consumption, and building a robust brand matrix to ensure stable growth [2] Group 2 - The company believes that "buying well" determines the starting point, "managing well" determines efficiency, and "collaborating well" determines long-term value, focusing on a brand-centric governance model that allows brands to maintain uniqueness and creativity [3] - Anta Sports' unique "brand + retail" business model supports a transferable and replicable global operational management system, enhancing multi-brand collaborative management and global resource integration [3] - The company has established a shared platform that creates scale advantages and collaborative efficiency in supply chain, digitalization, finance, human resources, and risk management, distinguishing itself from traditional single-brand companies [3]

Group 1 - Investment Rating: Buy (Initiating Coverage) [1] - Core Viewpoint: The report analyzes the rapid rise of the Han Shu brand and how Shangmei Co., Ltd. is advancing towards a multi-brand strategy [7][8] - Revenue and Profit Growth: The company has achieved significant revenue and profit growth, with a projected revenue of 91.72 billion, 111.55 billion, and 134.07 billion yuan for 2025-2027, representing year-on-year growth of 35%, 22%, and 20% respectively [8] Group 2 - Market Data: As of March 23, 2026, the current price is HKD 58.40, with a total market capitalization of approximately 23.25 billion HKD [4] - Performance Relative to Hang Seng Index: Over the past 12 months, Shangmei Co., Ltd. has outperformed the Hang Seng Index with a 35% increase compared to the index's 2.9% increase [5] - Brand Matrix Formation: The company is forming a strong brand matrix with Han Shu as the leading brand, contributing significantly to revenue growth [20] Group 3 - Multi-Channel Strategy: The company has established a comprehensive multi-channel strategy, leveraging platforms like Douyin for marketing and sales [10][20] - Product Innovation: The introduction of new products like the Hong Man Yao series has driven brand upgrades and sales growth [38] - R&D Investment: The establishment of research centers and collaboration with scientists has enhanced product development and innovation capabilities [34]

Investment Rating - The investment rating for the company is "Buy" [1] Core Insights - The company plans to acquire a 29.06% stake in Puma for €1.506 billion (approximately RMB 12.28 billion), becoming Puma's largest shareholder [1] - Puma is currently undergoing a strategic adjustment phase, with expected long-term investment returns [4] - The acquisition price represents a 62% premium based on Puma's stock price as of January 26, 2026, indicating a strong long-term brand value despite short-term profitability challenges [4] - The company is focusing on a multi-brand strategy and global expansion, leveraging its experience to enhance Puma's profitability and support its own international business development [4] Financial Summary - The company's main business revenue is projected to grow from RMB 70.826 billion in 2024 to RMB 94.095 billion in 2027, with a compound annual growth rate (CAGR) of approximately 8.7% [2] - The net profit attributable to shareholders is expected to decrease from RMB 156.0 billion in 2024 to RMB 131.5 billion in 2025, before recovering to RMB 162.2 billion in 2027 [2] - The earnings per share (EPS) is forecasted to decline from RMB 5.52 in 2024 to RMB 4.66 in 2025, then gradually increase to RMB 5.74 by 2027 [2] - The price-to-earnings (PE) ratio is projected to be 16 in 2025, 15 in 2026, and 13 in 2027, reflecting a favorable valuation trend [2] Market Performance - The company's stock price has fluctuated between HKD 107.5 and HKD 65.6 over the past year, with a current price of HKD 85.3 [1] - The company's market capitalization stands at HKD 240.8 billion [1]

Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Insights - The company announced the acquisition of a 29.06% stake in PUMA SE for €1.5 billion, becoming the largest shareholder, which is expected to enhance its global competitiveness and support its "single focus, multi-brand, globalization" strategy [2] - The company anticipates steady growth in 2026, with projected net profits of 12.977 billion, 14.560 billion, and 15.822 billion yuan for 2025, 2026, and 2027 respectively, reflecting a slight downward adjustment from previous estimates [2] - The company remains optimistic about its core categories and channel reforms, with potential growth driven by the upcoming Paris Olympics and strong performance from its FILA brand [2] Financial Summary and Valuation Metrics - Revenue projections for the company are as follows: 62.356 billion yuan in 2023, 70.826 billion yuan in 2024, 78.234 billion yuan in 2025, 85.959 billion yuan in 2026, and 94.151 billion yuan in 2027, with year-over-year growth rates of 16.2%, 13.6%, 10.5%, 9.9%, and 9.5% respectively [5] - Net profit estimates are 10.236 billion yuan for 2023, 15.596 billion yuan for 2024, 12.977 billion yuan for 2025, 14.560 billion yuan for 2026, and 15.822 billion yuan for 2027, with a notable decline of 16.8% in 2025 [5] - The company's EPS (Earnings Per Share) is projected to be 3.6 yuan in 2023, 5.5 yuan in 2024, 4.6 yuan in 2025, 5.2 yuan in 2026, and 5.7 yuan in 2027, with corresponding P/E ratios of 19.0, 13.1, 15.7, 13.4, and 12.3 [5]

Core Viewpoint - Anta Sports has signed a share purchase agreement with the Pinault family (Artémis) to acquire 29.06% of PUMA's shares for approximately €1.506 billion (about ¥12.28 billion), fully funded by the company's cash reserves, positioning Anta as PUMA's largest shareholder and enhancing its global brand portfolio [1][2]. Group 1: Acquisition Details - The acquisition price is set at €35 per share, representing a premium of approximately 63% over PUMA's closing price of €21.5 on January 27 [2]. - The transaction is expected to receive antitrust and regulatory approvals, with a target completion date before December 31, 2026. If conditions are not met, Anta may need to pay €100 million to the seller as a commitment fee [1][2]. Group 2: Strategic Implications - This acquisition is a significant step in advancing Anta's "single focus, multi-brand, and globalization" strategy, leveraging PUMA's strong brand presence in professional and trendy sports sectors to complement Anta's existing brand portfolio [1][3]. - PUMA's historical strengths in soccer, running, and motorsports, particularly in emerging markets like Africa and India, align well with Anta's current brand positioning, enhancing overall market competitiveness [3]. Group 3: Financial Outlook - PUMA's projected revenues for FY2023/24 are €8.6 billion and €8.8 billion, reflecting year-on-year growth of 6.6% and 4.4%, respectively, while net profits are expected to decline by 13.7% and 7.6% in the same periods [2]. - The acquisition is anticipated to improve PUMA's operational performance in China, where its revenue contribution is currently low (approximately 7% for FY2024), with significant growth potential through Anta's established retail model [3]. - Anta maintains a profit forecast for 2025-2027, estimating net profits of ¥130.2 billion, ¥140.1 billion, and ¥155.0 billion, respectively, and sets a target price of HKD 109.21 based on a PE ratio of 20x for 2026 [3].

Core Viewpoint - Anta has acquired a 29% stake in PUMA for €1.5 billion, becoming the largest shareholder, which is a strategic move to enhance its "single focus, multi-brand, globalization" strategy [1][3] Investment Highlights - Anta's acquisition of PUMA was executed at €35 per share, totaling approximately €1.506 billion, funded entirely by its own resources without external financing [1] - The company maintains its profit forecast, expecting net profits of 13.11 billion, 14.12 billion, and 15.85 billion RMB for 2025-2027, with a target price of HKD 104.1 based on a PE of 20X for 2025 [1] PUMA's Current Situation - PUMA is currently facing short-term pressure, undergoing a clearance phase, with projected revenues of €8.82 billion in 2024, a 2.5% increase, and a net profit of €280 million, a 7.6% decrease [2] - The revenue CAGR from 2019 to 2024 is approximately 9.9%, while net profit CAGR is about 1.4% [2] - PUMA's revenue distribution is 40% from the Americas, 39% from EMEA, and 21% from Asia-Pacific, with Greater China contributing around €600 million, or 7% [2] Strategic Implications - The acquisition is seen as a strategic minority investment that complements Anta's multi-brand strategy and aims to enhance its global market position [2] - PUMA's management acknowledges significant challenges, including lagging brand popularity, lack of product breakthroughs, and over-reliance on low-end wholesale channels, leading to a forecasted low double-digit sales decline in 2025 [2] - Anta is expected to leverage its insights, channel network, and supply chain advantages to empower PUMA's operations in Greater China, particularly in e-commerce and retail efficiency [3]

Investment Rating - The report maintains a "Buy" rating for Anta Sports [2][7]. Core Views - Anta Sports announced the acquisition of a 29.06% stake in PUMA from the Pinault family’s investment company Artémis, with a total transaction value of approximately €1.5 billion (around RMB 12.28 billion), reflecting a valuation of about 15 times PUMA's 2024 net profit [7]. - The acquisition is a strategic move to enhance Anta's multi-brand global strategy and is expected to strengthen its global presence [7]. - Anta will fund the acquisition entirely with its own resources, ensuring that dividend payments will not be affected [7]. - Anta's established consumer insights and operational capabilities in China are anticipated to aid PUMA in recovering growth in the Chinese market, where PUMA's revenue currently represents only about 7% of its global sales [7]. - PUMA's global brand strength and resources are expected to complement Anta's existing multi-brand strategy, facilitating Anta's global expansion [7]. - The report projects Anta's net profit for FY2025 to be RMB 132.0 billion, with a growth rate of 11% when excluding one-time gains from Amer Sports [7]. Financial Data and Profit Forecast - Revenue projections for Anta Sports are as follows: - FY2023: RMB 623.6 billion - FY2024: RMB 708.3 billion - FY2025E: RMB 799.8 billion - FY2026E: RMB 896.5 billion - FY2027E: RMB 970.0 billion - The corresponding year-on-year growth rates are 16%, 14%, 13%, 12%, and 8% respectively [6][17]. - Net profit forecasts are: - FY2023: RMB 102.4 billion - FY2024: RMB 156.0 billion - FY2025E: RMB 132.0 billion - FY2026E: RMB 140.0 billion - FY2027E: RMB 157.4 billion - The projected earnings per share (EPS) are: - FY2023: RMB 3.61 - FY2024: RMB 5.41 - FY2025E: RMB 4.60 - FY2026E: RMB 4.87 - FY2027E: RMB 5.48 [6][17].

Investment Rating - The report maintains a "Buy" rating for the company [4] Core Insights - The acquisition of a 29.06% stake in Puma is a significant strategic move for the company, positioning it as the largest shareholder and enhancing its global market presence [8] - The company aims to leverage its multi-brand strategy and global reach to revitalize Puma's brand value, despite recent performance challenges [8] - Earnings forecasts indicate a projected EPS of 4.70, 5.12, and 5.79 CNY per share for 2025, 2026, and 2027 respectively, with a target PE of 18 times for 2026, leading to a fair value estimate of 102.91 HKD per share [8] Financial Summary - Main revenue is expected to grow from 62,356 million CNY in 2023 to 94,684 million CNY in 2027, with growth rates of 16.2%, 13.6%, 9.4%, 10.0%, and 11.1% respectively [2] - EBITDA is projected to increase from 19,708 million CNY in 2023 to 29,797 million CNY in 2027 [2] - Net profit attributable to shareholders is forecasted to rise from 10,236 million CNY in 2023 to 16,198 million CNY in 2027, with a notable growth rate of 34.9% in 2023 [2][8]