Core Insights - Liren Lizhuang has initiated the incubation of its own brand to address the short-term inability of existing partner brands to meet the new demands of specific consumer segments [2] Company Strategy - The company is responding to market challenges by developing its own brand to fill gaps left by current partner brands [2]

Core Insights - The company reported strong financial performance for the first three quarters of 2025, with total revenue reaching 2.138 billion yuan, a year-on-year increase of 85.30%, and a net profit attributable to shareholders of 105 million yuan, up 81.57% [1] Revenue Breakdown - The self-owned brand revenue experienced explosive growth, becoming the core growth engine, with Q3 2025 self-owned brand revenue at 451 million yuan, a year-on-year increase of 344.5%, accounting for 55.1% of total revenue [2] - The brand "Zhanjia" generated 227 million yuan in revenue for Q3 2025, a year-on-year increase of 118.9%, with cumulative revenue for the first nine months reaching 680 million yuan, up 148.6% [2] - The brand "Feicui" also saw significant growth, with Q3 revenue of 203 million yuan, a quarter-on-quarter increase of 98.8%, and cumulative revenue of 362 million yuan for the first nine months [2] - The newly launched brand "Niu6 Yiyue Beid" achieved revenue of 12.126 million yuan by September, with a threefold increase in GMV in August and September [2] - The brand management business generated 204 million yuan in Q3 2025, a year-on-year increase of 114.1%, while the agency operation business achieved approximately 164 million yuan in revenue, showing stable development [2] Profitability and Cost Structure - Overall profitability improved, with a gross margin of 61.02% in Q3 2025, an increase of 12.42 percentage points year-on-year, primarily due to the higher gross margin from self-owned brand business [3] - The expense ratios for sales, management, and R&D in Q3 2025 were 54.52%, 3.37%, and 0.80%, respectively, with sales expense ratio increasing year-on-year due to revenue recognition timing issues [3] Investment Outlook - The company, as a leader in agency operations, has validated its multi-brand incubation capability, with self-owned brand business entering a harvest phase, indicating strong future growth potential [3] - Revenue projections for 2025-2027 are 3.483 billion, 5.334 billion, and 7.476 billion yuan, with year-on-year growth rates of 97.3%, 53.1%, and 40.2%, respectively [3] - Net profit forecasts for the same period are 179 million, 348 million, and 520 million yuan, with year-on-year growth rates of 69.7%, 93.9%, and 49.4% [3] - The current price-to-earnings ratios for 2025, 2026, and 2027 are projected at 73.4X, 37.8X, and 25.3X, respectively, maintaining a "buy" rating [3]

Investment Rating - The report initiates coverage with a "Buy" rating for the company [2]. Core Viewpoints - The company is a leading global digital management firm for consumer brands, transitioning from e-commerce agency services to self-owned brand incubation, which is experiencing rapid growth [1][13]. - The dual-driven strategy of "agency services + self-owned brands" is leading to an increasing proportion of revenue from self-owned brands [1][15]. - The e-commerce agency industry has seen a compound annual growth rate (CAGR) of 64% from 2011 to 2018, but growth has slowed to a CAGR of 14% from 2018 to 2023, with the market size reaching 1.78 trillion yuan in 2023 [1][31]. - The company has successfully launched self-owned brands "LYCOCELLE" and "FineNutri," with significant sales growth expected in the coming years [2][15]. Summary by Sections Company Overview - The company started as an e-commerce agency in 2011 and has evolved into a digital management firm for consumer brands, focusing on brand positioning, store operations, integrated marketing, data mining, and supply chain management [13][14]. - The self-owned brand "LYCOCELLE" focuses on premium clothing care products, while "FineNutri" targets women's anti-aging needs with a focus on specific ingredients [2][13]. Business Analysis - The revenue distribution among agency services, brand management, and self-owned brands is shifting, with self-owned brands increasing from 13.22% in 2022 to an expected 28.37% in 2024 [15]. - The brand management market is projected to grow significantly, with the company transitioning from traditional agency services to brand management [1][31]. Financial Projections - Revenue is projected to grow from 1.37 billion yuan in 2023 to 4.50 billion yuan in 2027, with corresponding net profits increasing from 54 million yuan to 338 million yuan [2][4]. - The company expects a revenue growth rate of 52.3% in 2025, followed by 34.8% in 2026 and 24.1% in 2027 [2][4]. Market Position - The company ranks fifth among the top ten e-commerce operators in China, indicating a strong market position [1]. - The brand management market is expected to reach over 580 billion yuan by 2028, with a CAGR of 7.53% from 2023 to 2028 [1][31].

Group 1 - The core viewpoint of the article highlights the rapid growth and upcoming IPO plans of the brand "Zhanjia," which specializes in fragrance laundry detergents and has gained popularity through celebrity marketing and concept promotion [2][4] - The parent company, Ruoyuchen, is planning to list on the Hong Kong Stock Exchange to enhance its capital strength, competitiveness, and international brand image [2][4] Group 2 - Ruoyuchen, established in 2011, has evolved from a single e-commerce operation model to a leading third-party e-commerce service provider in China, expanding into various categories including beauty and health products [4][5] - The company experienced a compound annual growth rate (CAGR) of 50.49% in revenue from 2015 to 2019, but faced declining growth rates in revenue and net profit since 2016, prompting a shift towards brand management and self-owned brand incubation [4][5] Group 3 - In 2024, Ruoyuchen reported revenue of 1.766 billion yuan, a year-on-year increase of 29.26%, with net profit rising 94.58% to 106 million yuan [5] - The revenue contribution from the third-party operation business decreased to approximately 764 million yuan, accounting for 43.25% of total revenue, down from 68.98% in 2022 [5] - Conversely, the brand management business generated around 500 million yuan in revenue, a year-on-year increase of 212.24%, raising its contribution to 28.38% [5][6] Group 4 - The self-owned brand "Zhanjia" achieved revenue of 484 million yuan, increasing its share from 18.65% to 27.42% [6] - Zhanjia's strategic product, fragrance laundry detergent, quickly gained traction, achieving over 100 million yuan in sales within months of launch, and ranked first in Tmall's new brand sales during the "Double Eleven" shopping festival [8][10] Group 5 - Despite high sales, Zhanjia has faced criticism regarding product quality and effectiveness, with consumers expressing dissatisfaction over design flaws and fragrance longevity [9] - The company has emphasized its commitment to quality by partnering with top manufacturers and sourcing high-quality raw materials globally [9]

Core Insights - Hema's self-owned brand strategy is a key competitive advantage, with plans to incubate 100 new brands in 2021 to enhance product differentiation and support multi-channel operations [1][2] Group 1: Brand Incubation Strategy - Hema has launched the "Hema X Accelerator" to facilitate the incubation of new brands by integrating resources for investment, product development, supply chain support, and marketing [1][2] - The focus for 2021 includes collaboration with KA brands, internet celebrity brands, catering brands, and time-honored brands to quickly develop unique products for young consumers [1][2] Group 2: Product Quality and Market Positioning - All new products will undergo a "trial period" to ensure quality through a strict selection process, aiming to meet consumer needs [2] - The establishment of the Hema X Accelerator is intended to enhance Hema's own brand capabilities and create a competitive edge over traditional retail and other membership stores [2] Group 3: Market Competition and Differentiation - The core of Hema X membership stores will be its self-owned products, which are expected to account for approximately 50% of the offerings [2] - The creation of a brand incubation platform is seen as essential for maintaining product differentiation in a highly competitive market, reducing the likelihood of price wars [2][3]