Core Viewpoint - The article highlights the competitive landscape of the Chinese cosmetics market, focusing on the success of local brand Proya, which is preparing for an IPO in Hong Kong while facing challenges from both international and domestic competitors [1][23]. Company Overview - Proya, established in 2006 and listed on the Shanghai Stock Exchange in 2017, is headquartered in Hangzhou and has a market capitalization of approximately 29.2 billion RMB [5][9]. - The company has a diverse product range covering skincare, makeup, and personal care, with its main brand contributing over 70% of its revenue [11][23]. Market Trends - In 2024, local cosmetic brands are projected to hold a market share of 49.9% in China, an increase from previous years but still lower than South Korea and Japan [1]. - The per capita spending on cosmetics in China is around 664 RMB, significantly lower than that in developed Asian countries, indicating potential growth as income levels rise [1][21]. Financial Performance - Proya's revenue has shown a growth trend, with figures of approximately 6.39 billion RMB in 2022, 8.90 billion RMB in 2023, and projected 10.78 billion RMB in 2024 [19][20]. - The gross profit margin has remained around 70%, but the company reported a decline in third-quarter performance for 2025, with revenue dropping by 11.63% year-on-year [19][20]. Sales Channels - Over 70% of Proya's revenue comes from online direct sales, with a significant reliance on platforms like Tmall and JD.com [16][17]. - The company has experienced a compound annual growth rate of 44% in online sales from 2019 to 2024, surpassing leading foreign skincare brands [8]. Competitive Landscape - Proya is the only domestic brand among the top five cosmetics brands in China, holding a market share of 1.3% [23]. - The company faces intense competition from international giants like L'Oréal and Shiseido, as well as domestic brands such as Shanghai Jahwa and Huaxi Biological [23]. Future Outlook - The Chinese cosmetics market is expected to grow at a compound annual growth rate of 6.6% from 2024 to 2029, driven by increasing consumer demand for skincare and makeup products [21][23]. - Proya's upcoming IPO aims to raise funds for research and development, brand building, and digital transformation, reflecting its ambition for expansion [9][23].

Investment Rating - The report maintains an "Outperform" rating for the retail sector [3][58]. Core Insights - The retail industry is experiencing a low-level recovery with significant differentiation among individual stocks. The overall growth rate for the industry has shown a slight decline in the third quarter, with retail sales in the first nine months of 2025 reaching 365,877 billion yuan, a year-on-year increase of 4.5% [1][13]. - The beauty and personal care sector is facing pressure on profitability due to changes in e-commerce platform rules and a lack of innovative products. The gold and jewelry sector is performing well, driven by stable sales of fixed-price products. The cross-border e-commerce sector is showing positive growth, while offline retail continues to face challenges [2][34][42]. Summary by Sections Overall Industry Performance - The retail sector's growth has been relatively stable, with a year-on-year increase of 4.5% in retail sales for the first nine months of 2025. The growth rate has declined in the second half of the year due to a decrease in consumer purchasing power and the tapering of stimulus policies [1][13]. Beauty and Personal Care - The beauty sector's sales reached 328.82 billion yuan in the first three quarters of 2025, growing by 3.9% year-on-year. However, profitability has been under pressure due to weak product launches and changes in promotional strategies [22][28]. Gold and Jewelry - The gold and jewelry sector saw a significant year-on-year growth of 11.5% in retail sales, totaling 276.81 billion yuan in the first three quarters of 2025. The sector benefits from a low base from the previous year and rising gold prices, although profitability has faced challenges [34][41]. Cross-Border E-commerce - Cross-border e-commerce has shown a stable growth trajectory, with a total import and export value of approximately 2.06 trillion yuan in the first three quarters of 2025, reflecting a year-on-year increase of 6.4%. The sector's revenue grew by 15.15% in Q3 2025, driven by strong operational resilience among leading companies [42][48]. Offline Retail - The offline retail sector remains under pressure, with a year-on-year increase of only 3.5% in retail sales for the first three quarters of 2025. The overall revenue for the offline retail sector declined by 15.9% in Q3 2025, indicating ongoing challenges in the market [50][54].

Investment Rating - The report suggests a positive investment outlook for the beauty and personal care sector, recommending a "buy" rating for high-growth companies with strong brand power and innovative product offerings [2][3]. Core Insights - The beauty and personal care sector is experiencing a slow recovery, with significant differentiation among sub-sectors. Personal care products and innovative channels continue to perform strongly, while the cosmetics sector shows signs of slowing growth due to domestic brand competition [1][2][3]. - For 2026, the overall beauty and personal care market is expected to remain stable, but further differentiation among companies is anticipated. The report emphasizes the importance of selecting high-growth targets with product and channel innovations [2][3]. Summary by Sections Overall Market Performance - In the first three quarters of 2025, the beauty and personal care sector saw revenues and net profits increase by 2.7% and 4.9% respectively, with personal care outperforming cosmetics and medical aesthetics [12][31]. - The cosmetics sector experienced a slight decline in revenue, with a 0.4% decrease year-on-year, while net profit fell by 2.3% [31][33]. Personal Care Sector - The personal care segment achieved revenues of 52 billion yuan and net profits of 5 billion yuan, reflecting a year-on-year increase of 33.7% and 5.7% respectively. The third quarter alone saw a revenue increase of 41.1% [12][16]. - Companies like Ruoyuchen reported impressive growth, with a 123% increase in revenue and a 73% increase in net profit in the third quarter [12][28]. Cosmetics Sector - The cosmetics sector's revenue for the first three quarters was 308 billion yuan, with a net profit of 30 billion yuan, showing a decline of 0.4% and 2.3% respectively. The third quarter saw a revenue drop of 0.5% but a significant profit increase of 50.8% [12][31]. - The report highlights the importance of individual company strategies and product life cycles in determining performance within the cosmetics sector [13][48]. Medical Aesthetics Sector - The medical aesthetics segment reported revenues of 75 billion yuan and net profits of 27 billion yuan, with a slight revenue decline of 0.7% but a profit increase of 14.5% year-on-year [12][52]. - The third quarter saw a revenue increase of 1.8% and a remarkable profit growth of 96.6%, although underlying performance was affected by increased competition and integration challenges [52][56]. Investment Recommendations - The report recommends focusing on high-growth companies with strong brand power, such as Ruoyuchen, Shangmei, and Maogeping, as well as companies with stable fundamentals and potential for marginal improvement like Dengkang Oral and Shanghai Jahwa [2][3]. - It also suggests monitoring companies that are expected to reach a turning point, such as Runben and Jinjian Biological, which may present investment opportunities [2][3].

Core Viewpoint - The beauty and personal care sector is experiencing significant differentiation, with personal care products and channel innovations continuing to perform strongly, while the domestic cosmetics market is seeing a slowdown in growth. The medical aesthetics sector is facing intensified competition, leading to a deceleration in growth [1][2]. Group 1: Industry Performance - In the first three quarters of 2025, revenue and net profit attributable to shareholders increased by 2.7% and 4.9% respectively, with personal care outperforming cosmetics and medical aesthetics [3]. - The personal care segment achieved revenue and net profit of 5.2 billion and 0.5 billion respectively, with year-on-year growth of 33.7% and 5.7%. In Q3 alone, revenue and net profit reached 1.8 billion and 0.17 billion, showing year-on-year growth of 41.1% and 3.3% [3]. - The cosmetics segment reported revenue and net profit of 30.8 billion and 3 billion respectively, with year-on-year changes of -0.4% and -2.3%. In Q3, revenue and net profit were 8.9 billion and 0.75 billion, with year-on-year changes of -0.5% and +50.8% [3]. - The medical aesthetics segment generated revenue and net profit of 7.5 billion and 2.7 billion respectively, with year-on-year changes of -0.7% and +14.5%. In Q3, revenue and net profit were 2.5 billion and 1.2 billion, with year-on-year changes of +1.8% and +96.6% [3]. Group 2: Investment Recommendations - The overall consumer market is in a slow recovery phase, with the beauty and personal care sector benefiting from product innovations and the rise of domestic brands, indicating strong growth potential. It is anticipated that the beauty and personal care sector will maintain stability in 2026, but differentiation will further intensify [2]. - The recommendation is to selectively invest in high-growth targets that exhibit product and channel changes, while also monitoring marginal improvement opportunities [2]. Group 3: Market Trends - The market share of the beauty and personal care sector is expected to increase due to the long-term logic of domestic brand growth, with high-growth targets continuing to attract incremental capital [4]. - The third quarter saw a decrease in market share to 7.29%, down 5.3 percentage points, influenced by factors such as intensified competition and reduced efficiency in traffic conversion [4][5].

Core Insights - The performance of listed companies in the domestic pet industry shows significant divergence amid intensifying competition and rising costs, with the rise of self-owned brands and global production layout driving growth [1] - The overall industry remains in a growth phase, particularly benefiting from domestic consumption upgrades and the "national brand substitution" trend, with leading companies maintaining double-digit growth [1] Revenue Performance - Leading companies such as Guibao Pet and Zhongchong Co. reported revenues of 4.737 billion and 3.86 billion respectively in the first three quarters of this year, reflecting year-on-year growth of 29.03% and 21.05% [1] - Yuanfei Pet achieved a revenue of 1.281 billion, marking a significant year-on-year growth of 37.66% [1] - In contrast, Petty Co. and Yiyi Co. faced revenue pressures, with Petty Co. experiencing a year-on-year decline of 17.68% due to reduced overseas orders and domestic agency business adjustments, while Yiyi Co. saw a slight decline of 0.72% but managed to improve profits through cost control and product structure optimization [1] Strategic Focus on Domestic Market - Companies are emphasizing the enhancement of the domestic market as a core strategic highlight and future growth engine, increasing marketing investments, enriching brand matrices, and deepening channel construction to capture domestic consumer mindshare [2] - Yiyi Co. plans to acquire the "Gao Ye Jia" cat food and cat litter brand to quickly gain mature domestic brand operation capabilities and market share [2] - Petty Co. intends to continue investing in its domestic self-owned brand business, particularly in staple food products, and plans to introduce high-end staple food products from its New Zealand factory to the Chinese market [2] Global Production Layout - Leading pet companies are accelerating their global production layout, particularly shifting capacity to Southeast Asia to build a more resilient and efficient global supply chain [3] - Yuanfei Pet has established a dual-core production capacity structure of "domestic + Southeast Asia," with its Cambodia factory nearing full production and the Bangladesh base under construction [3] - Petty Co. plans to expand its Southeast Asia factory capacity, expecting to increase pet snack production by approximately 5,000 tons over the next two years [3] - The current global production layout is driven more by considerations of supply chain security, cost optimization, and resource integration rather than merely proximity to customers or obtaining custom orders [3]

New Consumption - In September 2025, the GMV of the beauty category on Douyin increased by 19.7% year-on-year, while it decreased by 10.4% month-on-month [2][6] - The total GMV of the top 20 beauty brands on Douyin reached over 3 billion yuan, with a year-on-year growth of 38.59%. Han Shu maintained the top position with a GMV exceeding 500 million yuan, and 40% of brands saw their GMV double [7][8] - Domestic brands showed strong performance in self-operated channels, with 60% of the top 20 beauty brands having a higher GMV contribution from self-operated sales than from influencer promotions [7][8] - The price distribution in the skincare category is relatively balanced, while the makeup and perfume categories heavily rely on affordable products. The price segment under 150 yuan accounted for 49.54% of the market [8] Real Estate - The real estate sector saw a decline of 0.8% this week, with new home transactions in 42 key cities totaling 980,000 square meters, a 51% decrease week-on-week [10][12] - The Ministry of Housing and Urban-Rural Development is focusing on urban renewal and governance, with new regulations introduced in cities like Shenzhen and Chengdu to promote the construction of "good houses" [13][15] - The government is also increasing housing provident fund loan limits in cities like Nanjing and Shaoxing to support homebuyers [13][14] North Exchange - The research on solid-state lithium batteries has made significant progress, with new technologies enhancing the stability of metal lithium anodes [16][17] - The energy storage sector is rapidly developing, with a total of 1,663 energy storage stations in operation as of June 2025, totaling 75.79 GW/175.12 GWh [16][17] - The North Exchange has identified 24 companies in the energy storage industry, spanning upstream material production to downstream system operation [17][18] Pharmaceuticals - The pharmaceutical index rose by 0.36% this week, with expectations for innovative drugs to continue rapid growth and export businesses to perform well [28][29] - The market anticipates catalysts such as ESMO and BD meetings in October, which may stabilize and rebound the innovative drug sector [29][30] - Recommended stocks include innovative drug companies like Xinlitai, Hotgen Biotech, and China Biologic Products, as well as export-oriented firms like WuXi AppTec and Jiuzhou Pharmaceutical [29][34] Company Analysis - Mixue Group plans to invest 286 million yuan to acquire 51% of Fulu Family, expanding its brand matrix into the fresh beer market [36][37] - Fulu Family offers fresh beer products priced between 6 to 10 yuan per 500 ml, focusing on high-quality and affordable offerings [37][38] - The acquisition is expected to leverage Mixue's existing supply chain advantages to enhance its brand presence in the fresh beer sector [38]

Core Insights - Douyin's beauty category GMV increased by 19.7% year-on-year in September 2025, but saw a quarter-on-quarter decline of 10.4% [1] - Domestic brands showed strong performance in self-operated sales, with 60% of the top 20 beauty brands having a higher GMV contribution from self-operated channels than from influencers [2] - The trend of domestic brands replacing foreign ones continues, suggesting a focus on domestic brands that are expanding their market presence and brand influence [1] Group 1: Market Performance - The total GMV of the top 20 beauty brands on Douyin reached over 3 billion yuan in September, marking a year-on-year growth of 38.59% [1] - Han Shu maintained the top position with a GMV exceeding 500 million yuan, with 40% of brands experiencing over 100% growth [1] - Seven new brands entered the top 20 list, accounting for 35%, including Meishi, Shiseido, and Afu, with significant ranking improvements [1] Group 2: Price Distribution - The price distribution in the beauty and skincare category is relatively balanced, with products priced under 150 yuan holding the largest market share at 49.54% [3] - The GMV contribution from products priced under 300 yuan increased by 2.54 percentage points, while the share of products priced over 1,000 yuan decreased by 1.09 percentage points [3] - In the color cosmetics and fragrance category, 74% of GMV comes from products priced under 150 yuan, indicating a concentration in lower price ranges [3] Group 3: Investment Recommendations - Recommended stocks include: 1. Mao Ge Ping (01318), a leading domestic high-end beauty brand with strong product and channel expansion [4] 2. Proya (603605), known for its mature organizational structure and industry-leading marketing capabilities [4] 3. Marubi Biological (603983), which continues to release strong single product potential [4] 4. Shangmei Co. (02145), benefiting from the trend of affordable consumption with multi-category and multi-channel development [4] 5. Runben Co. (603193), a quality domestic brand in the mosquito repellent and baby products sector with significant growth potential [4]

Investment Rating - The investment rating for the beauty care industry is "Positive" (maintained) [4] Core Insights - In September 2025, the GMV (Gross Merchandise Value) of the beauty category on Douyin increased by 19.7% year-on-year, although it saw a month-on-month decline of 10.4% [4] - The top 20 beauty brands on Douyin achieved a total GMV exceeding 3 billion yuan, with a year-on-year growth of 38.59%. Notably, the brand Han Shu maintained its leading position with over 500 million yuan in GMV, and 40% of brands in the top 20 experienced more than double growth [4] - Domestic brands showed strong performance, with 60% of the top 20 brands having a higher GMV contribution from self-operated channels than from influencer promotions. Brands like Han Shu and Bai Que Ling had over 70% of their GMV from self-operated channels, indicating a competitive advantage for domestic brands in self-operated channels [4] Summary by Sections Market Performance - The beauty and skincare product price distribution is relatively balanced, while the color cosmetics and fragrance categories heavily rely on affordable products. The price segment under 150 yuan accounted for 49.54% of the market share in September, marking it as the main price segment [4] - Products priced under 150 yuan made up 36.23% of the skincare category, while products priced over 1,000 yuan contributed over 10% to GMV. In contrast, 74% of the GMV in the color cosmetics and fragrance category came from products priced under 150 yuan, indicating a more concentrated price distribution [4] Investment Recommendations - The report suggests focusing on domestic brands that are continuously enhancing their market scale and brand influence through mainstream channels. Recommended stocks include: 1. Mao Ge Ping, a leading high-end domestic beauty brand with strong product and channel expansion capabilities 2. Po Lai Ya, known for its mature organizational structure and industry-leading marketing and management capabilities 3. Wan Mei Biological, which is experiencing accelerated brand growth through its flagship products 4. Shang Mei Co., benefiting from the trend of affordable consumption with multi-category and multi-channel development [4]

Summary of the Medical Aesthetics and Cosmetics Industry Conference Call Industry Overview - The medical aesthetics industry in China has a significantly lower penetration rate compared to the US and South Korea, indicating substantial growth potential. The current penetration rate is approximately 2 per 1,000 people, while the US and South Korea have rates of 5‰ and 8‰ respectively, suggesting a large market opportunity for growth [2][3][4] - The consumer repurchase rate for medical aesthetics is high, with stable demand for light medical aesthetics services, which provides a solid foundation for industry development [2][3] Market Dynamics - The medical aesthetics industry is divided into two main segments: medical aesthetics and cosmetics. The medical aesthetics segment remains robust post-pandemic, with a focus on product and material development [3][4] - The upstream raw material sector has high gross margins, with companies like Aimeike achieving margins of 85%-90%. The typical markup at the consumer level is over three times the factory price, ensuring profitability for institutions and sales personnel [2][4] Capital Market Trends - Capital markets are increasingly focused on upstream manufacturers, particularly the transition from hyaluronic acid to active materials such as recombinant collagen and PDRN. This shift is driven by rising consumer demand for facial treatments [7] - The market for light medical aesthetics accounts for approximately 70% in leading hospitals, with new medical aesthetics primarily divided into photonic and injection categories [8] Product Market Size - The market size for hyaluronic acid and botulinum toxin at the factory level is estimated to be between 50 to 100 billion yuan. The markup for mature products typically ranges from 2 to 3 times, with high-end products potentially reaching 3 to 4 times [9] - The regenerative materials market has seen rapid growth, with several companies achieving sales exceeding 1 billion yuan since 2021. However, these materials are not fully replacing hyaluronic acid but rather expanding the market [10][11] Material Development and Trends - The development of regenerative materials is significant, with a focus on micro-spheres that stimulate natural repair and collagen regeneration. These materials are expected to enhance treatment effectiveness and safety in soft tissue filling and skin management [15][16] - The future of the medical aesthetics industry is expected to shift towards active micro-spheres and humanized collagen, with a focus on extracellular matrix and various collagen types [15] Cosmetics Industry Overview - The cosmetics industry has seen a clear trend towards domestic brand replacement, with domestic brands now accounting for over 50% of the market. Brands are leveraging e-commerce and live streaming to enhance growth, with increased R&D investments focusing on efficacy and ingredient-driven strategies [2][21] - The market has shifted from high-end luxury products to a broader consumer base, with skincare products maintaining steady growth despite the pandemic [21][22] Sales Dynamics - The sales of domestic cosmetics exhibit seasonal variations, with the first half of the year accounting for about 40% of total sales and the second half for 60%. Major shopping events like 618 and Double Eleven significantly impact annual sales [24] R&D Investment Differences - There is a notable difference in R&D investment between the medical aesthetics and cosmetics industries. The medical aesthetics sector focuses on material iteration, while the cosmetics industry emphasizes brand building and marketing to enhance consumer loyalty [25] Future Outlook - The future of domestic cosmetics companies appears optimistic, with expectations of revenue growth driven by channel changes and ingredient innovations. Companies like Perfect Diary and Proya are projected to reach revenue levels of 20 to 30 billion yuan in the next 3 to 5 years [30]

New Consumption - In August 2025, the GMV of the beauty category on Douyin exceeded 20 billion yuan, with a year-on-year growth of 19.56% and a month-on-month growth of 21.46% [2][7] - Domestic brands performed well, with Han Shu leading the market with a GMV exceeding 700 million yuan, and the Han Shu Hongman Waist Ring Six Peptide Set being the only product to exceed 100 million yuan in sales [7][8] - The trend in Douyin beauty consumption is shifting from "trial consumption" to "stable repurchase," indicating a more rational consumer behavior focusing on product practicality [8] Robotics Industry - The human-shaped robot market is expected to grow significantly, with the market size projected to reach approximately 27.6 billion yuan in 2024 and 750 billion yuan by 2029 [9][10] - Key components for human-shaped robots include actuators, sensors, and transmission systems, with the planetary roller screw expected to account for 19% of the total cost by 2030 [9][10] - Domestic companies are gradually breaking into the high-end bearing market, which is currently dominated by eight global enterprises, with a current localization rate of less than 20% [10][11] Food and Beverage Industry - National beer companies showed stable revenue and profit performance in the first half of 2025, with cost reductions contributing to gross profit growth [15][16] - The dairy sector is expected to see a reversal in fundamentals as raw milk prices stabilize and beef prices rise, which could enhance profitability for dairy companies [16] - The snack food sector is experiencing a divergence in performance, with emerging channels like bulk snacks and membership supermarkets maintaining high momentum, while traditional channels face challenges [17] Logistics Industry - Zhonggu Logistics reported a revenue of 5.338 billion yuan in the first half of 2025, a decrease of 6.99% year-on-year, but net profit increased by 41.59% to 1.072 billion yuan [19][20] - The company is optimizing its capacity deployment in response to domestic demand recovery and external trade needs, which supports profit growth [20][21] - The company plans to distribute 9.03 billion yuan in dividends, reflecting its strong profit attributes [21] Public Utilities and Environmental Protection - Datang New Energy achieved a revenue of 6.845 billion yuan in the first half of 2025, with a year-on-year growth of 3.26%, while net profit decreased by 4.37% [22][23] - The company’s capital expenditure significantly decreased, indicating a focus on optimizing financial structure [26][27] - The wind power sector is expected to outperform solar power in terms of output and operational cycles, with a favorable market environment anticipated for wind power operators [27]