Financial Data and Key Metrics Changes - Total net revenues for Q2 2025 increased by 36.8% year over year to RMB1.09 billion from the prior year period [14] - Gross profit for Q2 2025 increased by 39.5% to RMB850.4 million, with gross margin rising to 78.3% from 76.7% [15] - Net loss for Q2 2025 was RMB19.5 million, significantly reduced from RMB85.5 million in the prior year, resulting in a net loss margin of 1.8% compared to 10.8% [19] - Non-GAAP net income for Q2 2025 was RMB11.8 million, a turnaround from a non-GAAP net loss of RMB74.9 million in the prior year [19] Business Line Data and Key Metrics Changes - Revenues from skincare brands increased by 78.7% year over year, driven by an 88.1% growth in the combined revenue from major skincare brands [6][14] - Color cosmetics brands achieved a year-over-year growth of 8%, with the Perfect Diary brand returning to a growth trajectory [7] - Operating loss margin improved to 5.1% from 17% in the prior year, indicating better operational efficiency [18] Market Data and Key Metrics Changes - China's beauty industry saw a modest growth of 2.6% year over year, lagging behind the 5.4% growth in total retail sales of consumer goods [5] - During the key promotion period in May and June, beauty sales rose by 4.4% in May but declined by 2.2% in June [5] Company Strategy and Development Direction - The company is focused on an R&D-driven strategy aimed at becoming a world-class pioneer in beauty innovation [6] - Continued expansion of the international innovation network and collaboration with global R&D talents is a priority [6] - The company aims to balance growth and profitability, particularly in the skincare segment, which is showing stronger growth momentum [24] Management's Comments on Operating Environment and Future Outlook - Management acknowledges increasing competition, especially from international brands, but remains confident in their R&D capabilities to drive future growth [25] - The company expects total net revenues for 2025 to be between RMB778.6 million and RMB880.1 million, representing a year-over-year increase of approximately 15% to 30% [20] Other Important Information - The company has launched several new products, including the Bio Lip Essence Lipstick and the BioPhase Essence Foundation, which have contributed to brand growth [10] - The company is committed to social responsibility initiatives, including programs that provide professional makeup training for low-income women [11] Q&A Session Summary Question: Profitability expectations for skincare and color cosmetics - Management believes they can achieve both growth and profitability, especially as high-end skincare brands are growing faster than color cosmetics [23] Question: Views on industry competition in Q3 and Q4 - Competition is expected to intensify, particularly from international brands, but the company is confident in its R&D-driven growth strategy [25] Question: Key drivers behind skincare brands' growth - Growth is attributed to continued investment in R&D and a strong pipeline of new product innovations [30] Question: Outlook for skincare business and profitability improvement efforts - The company expects continued growth in skincare brands and plans to optimize channel and product mix while streamlining operating expenses [32][35]