Investment Rating - The report maintains a "Positive" outlook on the cosmetics and medical beauty industry [2]. Core Insights - The cosmetics and medical beauty sector underperformed the market during the week of June 27 to July 4, 2025, with the Shenwan Beauty Care Index declining by 0.6% and the Shenwan Cosmetics Index down by 1.5% [3][4]. - Domestic brands such as Maogeping and others showed significant growth, with some achieving over 50% growth in June, which is expected to positively impact Q2 performance [3][9]. - The report highlights a strong performance from leading domestic brands during the 618 shopping festival, with a notable increase in sales momentum post-event [9][10]. Summary by Sections Industry Performance - The Shenwan Beauty Care Index decreased by 0.6%, while the Shenwan Cosmetics Index fell by 1.5%, indicating weaker performance compared to the Shenwan A Index [4]. - The personal care products index saw a slight increase of 0.7%, but still lagged behind the Shenwan A Index by 0.4% [4]. Key Company Performance - Expected performance for major companies in Q2 includes: - Upbeauty: Revenue and net profit expected to grow by 16% and 25% respectively [11]. - Marubi: Anticipated revenue and net profit growth of 22% and 28% [11]. - Proya: Projected revenue and net profit growth of 10% and 15% [11]. - Maogeping: Expected revenue and net profit growth of 38% and 35% [11]. - Ruifeng: Anticipated growth of 70% and 75% in revenue and net profit respectively [11]. - Juzhibio: Expected growth of 25% and 20% in revenue and net profit [11]. Market Trends - The report notes a robust recovery in consumer demand, with a 4.1% year-on-year increase in retail sales for cosmetics in the first five months of 2025 [20]. - The domestic market is seeing a shift with local brands gaining market share, as evidenced by the performance of brands like Proya and Maogeping during major shopping events [34]. Investment Recommendations - Recommended stocks include: - Upbeauty, Proya, and Marubi for their comprehensive brand matrices and growth potential [15]. - Maogeping and Juzhibio for their strong positioning in niche markets [15]. - Attention is advised for Shanghai Jahwa, Betaini, and Huaxi Biological for potential growth [15]. E-commerce Insights - Data from Douyin indicates significant growth for domestic brands, with Han Shu achieving a GMV of 7.2 billion yuan, reflecting a 53% year-on-year increase [16]. - The overall GMV for domestic brands in June reached over 50% growth, indicating a strong market presence [9][16].