Core Viewpoint - The Chinese beauty industry is transitioning from "manufacturing" to "intelligent manufacturing," driven by innovation and participation in international competition, as highlighted in the recent beauty innovation report by Yatsen Group [1][2][3]. Group 1: Global Research and Development Trends - The global beauty industry is forming a new paradigm of "global co-research and localized results" due to rising consumer demand and the emergence of new market R&D capabilities. China's cosmetics export value reached 23.472 billion yuan in the first 11 months of 2024, covering major markets such as the Americas, Europe, and Southeast Asia. The compound annual growth rate (CAGR) for emerging markets is expected to exceed 10% by the end of 2025 [1]. Group 2: Consumer Demand and Scientific Beauty - Consumer demand is shifting from basic cosmetics to scientifically validated personalized solutions. The technology skincare market is projected to exceed 420 billion yuan by 2025, with a CAGR of 18%. A survey indicates that 72% of consumers prioritize efficacy, while 65% focus on efficacy verification data. Anti-aging, whitening, and repair are the three major skincare hotspots, with color cosmetics trending towards "makeup and skincare integration" [2]. Group 3: Integration of Makeup and Skincare - The concept of "makeup and skincare integration" is rapidly gaining traction globally, leading to a deep fusion of color cosmetics and skincare. A report shows that 91% of consumers are concerned about active ingredients in base makeup, and 76% recognize the skincare benefits of foundation. From 2019 to 2023, sales of tinted moisturizers in the U.S. grew by 59%, with similar demand for functional color cosmetics in Southeast Asia and the Asia-Pacific region [2]. Group 4: AI Technology Reshaping the Beauty Industry - Artificial intelligence is becoming a fundamental driver for systematic upgrades in the beauty industry. A McKinsey report predicts that generative AI could create $90 to $100 billion in value for the global beauty sector by 2025. AI technology accelerates active ingredient screening and new molecular design in R&D, enhances efficiency in manufacturing through flexible production and smart quality inspection, and drives personalized customization and precise delivery for consumers [3].

Core Viewpoint - Leading cosmetic brands are transitioning from "strategic exploration" to "systematic attack" in the skincare sector, indicating a significant shift in their business strategies [2][4]. Group 1: Brand Strategies - Major brands like Mao Geping, Huaxizi, and Perfect Diary are leveraging their brand DNA and market insights to develop systematic strategies for entering the skincare market, focusing on high-end positioning, technological innovation, and concept extension [4]. - Mao Geping has established a comprehensive skincare line, achieving a revenue of 3.885 billion yuan in 2024, with skincare contributing 1.429 billion yuan, a year-on-year growth of 23.19%, accounting for 36.8% of total revenue [4]. - Perfect Diary is centered on "technological iteration," having launched its first generation of biomimetic membrane technology in 2023 and planning to upgrade to the third generation by 2025 [5][7]. Group 2: Product Development - Perfect Diary has expanded its product range to include a "biomimetic membrane" skincare series, integrating makeup and skincare, thus establishing a unique technical barrier [7]. - Huaxizi has developed a database of over 100 floral formulas, successfully extracting and preparing 50 types of floral ingredients, which supports its "flower-based skincare" concept [8][9]. - The "气色双生莲萃" series from Huaxizi includes various products such as creams and serums, combining Eastern plant extracts with modern skincare technology [8]. Group 3: Market Trends - The skincare market in China is significantly larger than the color cosmetics market, with skincare accounting for approximately 70% of the total cosmetics market, valued at over 700 billion yuan, compared to the color cosmetics market at around 88 billion yuan [16]. - Consumer demand is evolving, with over 60% of consumers expecting makeup products to also provide skincare benefits, indicating a trend towards "makeup and skincare integration" [16][17]. Group 4: Challenges and Competition - The transition of color cosmetic brands into skincare faces challenges, including establishing consumer trust and overcoming the perception of expertise in skincare [21][22]. - The skincare market is highly competitive, with international giants dominating the high-end segment, while domestic brands are rapidly emerging with a focus on quality-price ratio and efficacy [22][24]. - The complexity of skincare product formulation requires significant R&D investment and a robust quality control system, posing a challenge for brands traditionally focused on color cosmetics [22][24].

Core Insights - 毛戈平 is expanding its presence in high-end shopping malls, positioning itself alongside international luxury brands [1][2] - The brand has maintained a balanced sales structure between online and offline channels, with a focus on mid-to-high-end pricing [1][6] - 毛戈平's skincare segment is emerging as a significant growth driver, contributing 30-40% of total revenue, while color cosmetics still dominate sales [6][9] Expansion Strategy - 毛戈平 plans to open permanent stores in high-end locations like Beijing SKP and has already tested temporary stores in various cities [1][2] - The brand is upgrading existing retail spaces, such as expanding its counter in 武林银泰 from a few square meters to 40 square meters [1] - 毛戈平 currently operates 378 self-operated counters and 31 distributor counters across 120 cities in China [1] Market Positioning - 毛戈平 is recognized as one of the few Chinese brands entering the high-end beauty market traditionally dominated by international players [1][4] - The brand's self-operated stores enhance profit margins and allow for better market feedback and customer data collection [5] - 毛戈平's sales staff have a starting salary of 3,000 yuan, with a performance-based incentive structure that differs from many international brands [5] Product Development - The brand has launched over 100 new products in 2024 and plans to enter the high-end perfume market with the "闻道东方" series in April 2025 [8][9] - 毛戈平's skincare products have a gross margin of 87.2%, which is higher than that of its color cosmetics [6] - The brand aims to build its own production base, with a factory in Hangzhou expected to be operational by mid-2026 [11] Financial Performance - 毛戈平's stock price has shown significant growth since its IPO, reaching a peak of 130.6 HKD per share in June 2025, although it has recently adjusted to 98.3 HKD [11]

Core Viewpoint - The focus of the Chinese beauty market is shifting from brand marketing to research and development, indicating a revolution centered on scientific research and manufacturing [1][2]. Group 1: R&D Strategy and Investment - Yatsen E-commerce initiated a "second entrepreneurship" strategy in 2022, emphasizing long-term investment in R&D to build a global R&D system and become a "world-class beauty innovation pioneer" [2]. - Since 2020, Yatsen has invested over 580 million yuan in R&D, maintaining a R&D expense ratio above 3% for three consecutive years, positioning it among the leaders in the global beauty industry [3][6]. - The company has established a comprehensive R&D framework, referred to as the "1-3-4-6-20" global R&D strategy, which includes one world-class beauty factory, three self-built R&D centers, four research directions, six co-built laboratories, and over 20 research cooperation projects [5]. Group 2: R&D Achievements and Innovations - The Yatsen Global Innovation R&D Center, opened in May 2024, features over 300 high-end research instruments and has achieved national certification, marking it as one of the few accredited beauty R&D labs in China [6]. - Yatsen has made significant progress in developing new functional ingredients, such as the "Renewal Essence" component, which utilizes multi-strain fermentation technology for multiple benefits, and the "Lactobacillus infantis" extract, which shows superior skin barrier repair capabilities [6][8]. - The company has successfully commercialized products like the "Bionic Film" essence lipstick, which has sold over 4.5 million units and generated over 600 million yuan in GMV, becoming the top-selling lipstick globally for Chinese brands [10][13]. Group 3: Talent and Collaboration - Yatsen's R&D strategy is supported by a global talent matrix, with 48% of its R&D team holding advanced degrees, enhancing the company's ability to convert cutting-edge technology into market-ready products [16][17]. - The collaboration between Yatsen and international experts has led to significant recognition, including multiple papers presented at prestigious conferences, establishing the company as a leader in the beauty industry [17][19]. Group 4: Sustainability and Future Outlook - Yatsen is committed to sustainable practices, achieving an ESG A rating from MSCI for two consecutive years, and is the only Chinese beauty company to do so [20]. - The company integrates AI technology into its R&D processes, enhancing efficiency and reducing experimental iterations, exemplified by its development of an anti-aging serum using advanced predictive modeling [20][21]. - Yatsen aims to create a complete R&D ecosystem that encompasses basic research, application development, commercial transformation, and sustainable future initiatives, establishing a "Chinese paradigm" for R&D value realization [22][23].

Core Insights - Perfect Diary's new product, the "Bionic Film" essence foundation, utilizes the third-generation Biotec™ technology, which has garnered significant industry attention and aims to redefine the standards of foundation technology [1][3] - The brand has focused on "makeup-nourishing technology" for three years, leading to substantial technological advancements and a comprehensive innovation layout from raw material research to clinical validation [1][3] Industry Trends - The global color cosmetics market is undergoing a structural transformation towards "skincare integration," with Perfect Diary at the forefront of this trend through its continuous exploration and technological achievements in the "makeup-nourishing" field [2] - Three major trends have been identified in the market: traditional color cosmetics claiming better skincare benefits, multi-functional claims, and the emergence of new cross-category products [2] Product Innovation - The third-generation Biotec™ technology enables the new foundation to achieve 24-hour wear and oil control while enhancing barrier protection and wrinkle reduction [3] - Clinical tests conducted by authoritative institutions, such as Ruijin Hospital, showed significant improvements in skin barrier function (31.90%), skin hydration (26.02%), and a reduction in under-eye wrinkles (43.34%) after 14 days of use [3] Manufacturing Excellence - Perfect Diary's factory has achieved international certification for smart manufacturing, establishing itself as a benchmark in the global beauty manufacturing sector [4] - The factory, built in collaboration with a leading ODM company, features a high-standard cleanroom environment, with a purification standard of 100,000-level cleanliness, significantly higher than the industry average [6] Operational Efficiency - The factory employs intelligent and refined management practices to enhance efficiency and reduce costs, including automated filling and packaging systems [7] - A comprehensive quality control system ensures rigorous testing and monitoring throughout the production process, contributing to high-quality product output [7] Sustainability Practices - The factory incorporates sustainable practices, such as advanced water treatment systems that recycle wastewater for landscaping, aligning with global environmental trends [8] - The facility's location near a natural water source allows it to maintain high-quality production water standards, exceeding both Chinese and European pharmacopoeia requirements [8][9] Future Outlook - The collaboration between international experts and the brand's technological advancements signals a continued rise of domestic beauty brands, with Perfect Diary positioned as a leader in the global beauty market [10] - The innovative ecosystem established by the company, combining foundational research, clinical validation, and smart manufacturing, is expected to drive sustainable growth and attract further industry talent [10]