Investment Rating - The report maintains a rating of "Add" for the company [6] Core Viewpoints - The company has strategically acquired 100% of Shanghai Siyuanli Industrial Co., Ltd. for 1.25 billion RMB, further solidifying its position as a leader in the high-end beauty sector [1] - Following the acquisition, the company will hold the top three brands in China's beauty industry, enhancing its competitive advantage, especially in first-tier cities [5] - The acquisition is expected to significantly boost performance, with approximately 60,000 active members from Siyuanli being integrated into the company's membership system, leading to a 44% year-on-year increase in active members [5] - The company has a strong track record in merger integration, which has previously improved profitability, and this trend is expected to continue post-acquisition [5] - Recent business activities have shown robust growth, with a notable increase in revenue and customer traffic during the company's anniversary celebration [5] Financial Projections - The company forecasts net profits of 330 million, 370 million, and 420 million RMB for 2025, 2026, and 2027, representing year-on-year growth rates of 43%, 14%, and 11% respectively [6] - Revenue projections for 2025, 2026, and 2027 are set at 2.991 billion, 3.290 billion, and 3.555 billion RMB, with growth rates of 16.29%, 10.00%, and 8.06% respectively [7]

Core Viewpoint - The company is expected to achieve a revenue of no less than 1.45 billion yuan in 25H1, representing a year-on-year increase of 27%, and an adjusted net profit of no less than 175 million yuan, reflecting a year-on-year growth of 33% [1] Group 1: Performance and Growth - The company maintains strong performance growth despite a complex industry backdrop, showcasing resilience as a market leader [1] - The core business segments, beauty and health, show stable internal growth and external market share expansion, with a year-on-year increase in internal customer flow of 10% in 25H1 [1] - The health management segment is experiencing robust growth driven by functional medicine and women's health services [1] Group 2: Business Model and Strategy - The company employs a "Double Beauty + Double Health" model, providing customers with both emotional and functional value throughout their lifecycle, indicating significant potential for customer base expansion and value enhancement [1] - The board attributes performance improvement to the refinement of the "Double Beauty + Double Health" business model, which has increased the proportion of high-margin business revenue, thereby optimizing the revenue structure and improving gross margin levels [1] Group 3: Shareholder Value and Market Confidence - The company has executed a share buyback, purchasing 60,500 shares for a total transaction amount of 1.762 million HKD, with an average transaction price of approximately 29.12 HKD, reflecting management's confidence in the company's long-term development [1] - The share buyback is expected to enhance the company's market value and shareholder return capabilities [1] Group 4: Profit Forecast and Valuation - The company's net profit forecasts for 25-27 are adjusted to 320 million, 369 million, and 420 million yuan respectively, with a compound annual growth rate (CAGR) of 22% [2] - The target price for the company is set at 37.36 HKD, based on a 25x price-to-earnings ratio for 25, reflecting its status as a leading brand in beauty and health [2]