Group 1 - The report highlights the significant achievements in the recent China-US trade talks, with the US agreeing to suspend certain tariffs on Chinese goods, which may positively impact trade dynamics [7] - The macroeconomic policy emphasizes the importance of expanding domestic demand and improving living standards, as outlined in the "15th Five-Year Plan" [5][6] - The report notes a shift in export growth, with October exports showing a decline of 1.1% year-on-year, influenced by high base effects from the previous year [11][12] Group 2 - The report discusses the rebalancing between technology and cyclical sectors, suggesting that both will play significant roles in the market moving forward [17][20] - It identifies the satellite industry as a strategic investment opportunity, driven by large market potential, strong policy support, and technological advancements [23][24] - The report indicates that the REIT market is showing resilience, with the recent listing of the CITIC Construction Investment Shenyang International Software Park REIT, which is expected to attract investment due to its high dividend yield [65][66]

Investment Rating - The investment rating for the beauty and personal care industry is "Positive" (maintained) [3] Core Viewpoints - The beauty market in China showed steady performance in Q1-Q3 2025, with retail sales of cosmetics growing by 3.9% year-on-year, surpassing the overall retail sales growth of consumer goods at 3.3% [4][5] - The high-end segment is expected to outperform the mass market, with projected CAGR for high-end skincare and makeup at 9.6% and 10.8% respectively from 2023 to 2028, compared to 8.2% and 6.7% for the mass market [6] Summary by Sections Market Performance - In Q1-Q3 2025, the beauty market maintained stable demand, with monthly retail sales growth fluctuating, peaking at 8.6% in September [4][5] - The personal care segment performed well, with revenue reaching 52.3 billion yuan, a year-on-year increase of 33.7% [16] Segment Analysis - Cosmetics segment revenue was 299.9 billion yuan, with a slight increase of 0.02%, while net profit decreased by 2.5% [16] - The medical beauty segment saw revenue of 74.9 billion yuan, a decrease of 0.7%, but net profit increased by 14.5% [16] - The personal care segment's revenue growth was driven by product innovation and expansion, with notable performances from companies like RuBen and RYTHM [16] Brand Competition - The competitive landscape is stable, with domestic brands like Proya and Han Shu gaining market share, particularly in platforms like Tmall and Douyin [11][12] - The report highlights the increasing strength of domestic brands due to their brand power and local advantages [12]

Core Insights - The retail industry is experiencing a shift from value preservation to emotional value, with a focus on high-growth segments for investment opportunities [5][28] - The report maintains a positive outlook on the retail sector, emphasizing the importance of consumer insights and differentiated product offerings [5][28] Retail Market Overview - The retail index reported a slight increase of 0.31% during the week of November 3 to November 7, 2025, underperforming the Shanghai Composite Index, which rose by 1.08% [7][16] - Year-to-date, the retail index has increased by 4.20%, lagging behind the Shanghai Composite Index's 19.27% growth [16][20] Investment Strategy for 2026 - The investment strategy highlights four main themes: 1. **Gold and Jewelry**: Focus on high-end and fashionable gold segments, with recommendations for brands like Lao Pu Gold and Chao Hong Ji [5][48] 2. **Retail E-commerce**: Emphasize the transformation of offline retail to enhance service and experience, with key players like Yonghui Supermarket and Ai Ying Shi [5][48] 3. **Cosmetics**: Target domestic brands that capture emotional value and innovate on safety ingredients, recommending brands like Juzi Biological and Pechoin [5][49] 4. **Medical Aesthetics**: Focus on differentiated product manufacturers and expanding medical institutions, with recommendations for brands like Ai Mei Ke and Ke Di-B [5][49] Sector Performance - The jewelry sector is undergoing significant changes due to rising gold prices and a decline in traditional wedding markets, leading to the emergence of brands with strong consumer insights [5][29] - The cosmetics sector is seeing a rise in domestic brands leveraging cultural roots and emotional value to capture market share [5][41] Company-Specific Insights - **Chao Hong Ji**: Reported a revenue increase of 28.4% year-on-year for the first three quarters of 2025, with a notable performance in Q3 [54] - **Yonghui Supermarket**: Experienced a revenue decline of 22.2% year-on-year for the first three quarters of 2025, but is undergoing significant transformation [50] - **Juzi Biological**: Achieved a revenue growth of 21.7% year-on-year for the first half of 2025, focusing on collagen products [50]

Core Insights - The 2025 World Internet Conference held from November 6 to 9 focused on building a collaborative and inclusive digital future, with discussions on AI technology and the digital economy [1] - Jin Xing, founder and CEO of New Oxygen Group, highlighted the transformation of the medical beauty industry from a marketing-driven model to a user experience-centered delivery model, driven by AI and digitalization [1][3] Industry Overview - The Chinese medical beauty market is projected to reach 312 billion yuan in 2024, with a year-on-year growth of 14.8% [3] - The rise of diverse aesthetic values and the "self-appreciation economy" has made medical beauty a representative of new consumption [3] - However, uneven distribution of medical resources and high product prices have led to a trust crisis among consumers [3] Company Strategy - New Oxygen has implemented vertical integration and cost structure optimization since 2021, enhancing the safety, quality consistency, and inclusiveness of medical beauty services through digitalization and AI [3][4] - The company has established standardized fulfillment and dynamic quality control mechanisms to unify service quality across its stores [4][5] - New Oxygen has opened 41 stores in 10 major cities, becoming the largest chain in the light medical beauty sector in China [3] AI and Digitalization - New Oxygen has explored various AI applications in medical beauty, including intelligent skin detection and cross-regional store management, with five AI algorithms registered with the National Internet Information Office [7][8] - The company faces challenges in deep AI application due to high costs and the need for extensive multimodal data [8] - Jin Xing emphasized the importance of overcoming technical challenges to expand AI applications in the medical beauty sector [8] Pricing and Consumer Trust - The average customer price for light medical beauty in China is approximately 3,146 yuan, which is nearly equal to the average monthly disposable income [10] - High prices have contributed to the rise of "black medical beauty," creating potential medical risks [10] - New Oxygen aims to reduce marketing and supply chain costs from 60-80% to below 20% through vertical integration and digital operations, establishing a transparent pricing system [10] Regulatory Environment - Recent government policies are accelerating changes in the medical beauty pricing system, with efforts to streamline clinical trial approval processes [11] - The approval of various popular medical beauty products is expected to shift the market from a seller's market to a buyer's market, enhancing consumer trust [11] - New Oxygen is committed to maintaining transparency and quality in its services while expanding its store network [11]

Core Viewpoint - The company has shown strong growth in new orders for its energy source equipment, particularly in the Asia-Pacific region, leading to double-digit year-on-year revenue growth in the third quarter of 2025 [1][2]. Group 1: Energy Source Equipment - The demand for energy source equipment in the Asia-Pacific market is robust, with new orders in Q3 showing double-digit growth [1]. - The company's energy source equipment revenue faced challenges in the first half of the year due to high interest rates and weak consumer demand in North America, but there has been a noticeable recovery in Q3 [2]. - The flagship energy source device, Alma Harmony, has received a strong market response since its global launch in March 2025, contributing to increased order volumes [2]. Group 2: Injection Fillers - The injection filler business experienced a significant growth of 218% in the first half of the year, demonstrating strong product capability and effective channel management [3]. - The company plans to enhance the promotion of Profhilo in Thailand and expand the sales of Revanesse in the UK, German-speaking regions, Australia, and New Zealand [3]. - The long-acting botulinum toxin product, DaxibotulinumtoxinA (达希斐), is set to be launched in China following approval in September 2024, which is expected to inject new growth momentum into the injection filler business [3][4]. Group 3: Market Potential - The penetration rate of botulinum toxin in China is currently below the global average, indicating significant growth potential as consumer awareness increases [3]. - The market structure differences between China and other countries highlight the potential for increased usage of botulinum toxin in the Chinese market, which is currently underdeveloped compared to hyaluronic acid [3]. - The company’s DaxibotulinumtoxinA product has shown rapid revenue growth since its approval in the U.S., with a 32% increase in revenue for the first three quarters of 2024, primarily driven by repeat purchases [4]. Group 4: Financial Projections - The company expects revenue to reach $382 million, $442 million, and $510 million for the years 2025, 2026, and 2027, respectively, with net profits projected at $29 million, $36 million, and $45 million [4]. - The earnings per share (EPS) are forecasted to be $0.06, $0.08, and $0.10 for the same years, indicating a favorable growth trajectory [4].

Core Insights - The report by KPMG highlights that China's medical aesthetics industry has reached a market size of over 100 billion RMB and is experiencing the fastest growth globally, with potential to reach 1 trillion RMB by 2030 [1] Market Demand - In 2024, over 50% of the market demand for medical aesthetics will come from Generation Z (born 1997-2012), who view these services as a form of daily self-care rather than corrective treatments [1] - There is a rising demand from male consumers for light medical aesthetic procedures such as hyaluronic acid injections, botulinum toxin, microneedling, and intense pulsed light treatments [1] Market Growth - The market size for light medical aesthetics grew from 50.2 billion RMB in 2018 to 146 billion RMB in 2023, with the number of consumers increasing from 7.4 million to 23.5 million [1] - The shift towards non-surgical procedures is significant due to their lower risks, shorter recovery times, and easier accessibility [1] Geographic Trends - Medical aesthetic demand is shifting from traditional first-tier cities like Shanghai and Beijing to emerging first and second-tier cities such as Chengdu, Chongqing, and Hangzhou, which have lower living costs and considerable disposable income [1]

Group 1: Market Overview - The "beauty economy" in China has reached a scale of one trillion yuan, indicating significant consumer demand in the beauty and health sectors [1][6] - The aging population is driving the growth of the medical beauty industry, with a notable increase in demand for anti-aging and skin repair services among middle-aged and elderly consumers [6][8] Group 2: Industry Collaborations and Innovations - L'Oréal and Fudan University Huashan Hospital announced the establishment of a joint skin science laboratory to promote innovation in skin science through research and technology transfer [3] - L'Oréal released the first industry white paper on PDRN skincare applications, providing guidance for the development of skin science [4] Group 3: Consumer Trends and Product Development - The demand for beauty and health products among the elderly is comprehensive, prompting manufacturers to create practical and stylish products to meet the needs of the "new-age" consumers [7] - The introduction of smart hearing glasses by EssilorLuxottica aims to transform hearing aids into fashionable accessories, addressing aesthetic concerns for users [7] Group 4: Policy and Regulatory Environment - The National Medical Products Administration has streamlined approval processes, reducing clinical trial timelines, which fosters a more favorable environment for industry innovation [6] - The integration of healthcare and elderly care services is being promoted through collaborations, such as the partnership between Shanghai Kangyang Group and Ruijin Hospital [8]

Core Insights - The China medical beauty industry is rapidly rising, driven by a large market size, evolving technology, and increasing consumer demand, positioning it as a global focal point [3][4][9] - The industry is projected to reach a market size of 1 trillion RMB by 2030, with a significant shift in consumer demographics towards younger generations, particularly Generation Z [4][5][9] Market Overview - The medical beauty market in China has grown from 50.2 billion RMB in 2018 to 146 billion RMB in 2023, with the number of consumers increasing from 7.4 million to 23.5 million [5] - The demand for non-invasive procedures, such as botulinum toxin and hyaluronic acid fillers, is on the rise, particularly among younger consumers who view these treatments as part of their daily self-care routine [5][6] Consumer Demographics - Generation Z accounts for over 50% of the market demand for medical beauty services, contrasting with previous generations who viewed these services as corrective treatments [4][5] - There is a notable increase in male consumers seeking light medical beauty treatments, indicating a diversification of the consumer base [4] Growth Drivers - The growth of the medical beauty industry is supported by economic factors, with over 400 million middle-income individuals in urban areas and an aging population driving demand for anti-aging and skin repair services [6][7] - The industry is also benefiting from personalized service offerings and the adoption of advanced technologies, such as AI skin analysis tools [6] Geographic Trends - Demand for medical beauty services is expanding from traditional first-tier cities like Shanghai and Beijing to emerging second-tier cities such as Chengdu and Hangzhou, which offer lower living costs and substantial disposable income [7] Innovation and Challenges - Despite strong growth, the industry faces challenges such as safety compliance, talent shortages, and consumer retention [8] - Innovations in service models, including digital and remote consultations, are expected to drive future growth, alongside advancements in regenerative medicine [8] Future Outlook - The medical beauty industry in China is moving towards a more mature, regulated, and intelligent development phase, with opportunities for international collaboration and technology leadership [9] - The industry is anticipated to contribute to the "Healthy China 2030" strategy by enhancing domestic demand and injecting new growth momentum into the global beauty and health sector [9]

Core Insights - The report by KPMG highlights the rapid growth of China's medical aesthetics industry, with a market size of 3,115 billion yuan in 2023, projected to reach 13 trillion yuan by 2030 [1] - The industry is characterized by increasing consumer demand, particularly among younger demographics, and is reshaping the global medical aesthetics market [1] Group 1: Market Growth - China's medical aesthetics industry is one of the fastest-growing markets globally, driven by a large market size, evolving technologies, and rising consumer demand [1] - The middle-income group in urban areas has surpassed 400 million people, expected to reach 800 million in the next decade, contributing to the transformation of medical aesthetics from a luxury to an optional consumption [1] Group 2: Consumer Trends - There is a growing demand for non-invasive medical aesthetic services, particularly among emerging middle-aged and elderly consumers, which is becoming a significant supplement to industry growth [1] Group 3: Challenges and Innovations - Despite strong growth, the industry faces challenges such as safety compliance, talent shortages, and consumer outflow [2] - Innovations in medical aesthetics, including telemedicine and new business models, are shaping the future landscape of the industry [2] - Subscription-based beauty plans may emerge as a new business model, providing regular income for companies and enhancing customer loyalty [2] Group 4: Regional Expansion - With increasing demand for medical aesthetic services in Southeast Asia, Chinese medical aesthetic companies are expected to expand their operations into this market [2]

Core Viewpoint - Haohai Biological Technology has been actively repurchasing its shares, indicating a strategy to support its stock price amid declining performance metrics in the medical aesthetics sector [1][4]. Share Buyback Activity - The company spent HKD 805,700 to repurchase 29,600 shares on November 5, marking the third consecutive trading day of buybacks in November [1]. - In total, Haohai has conducted 23 share buybacks this year, with 11 in the first half and 12 in the second half [1]. - The share buybacks in the second half were divided into two phases: the first from September 15 to September 24, and the second from October 27 to November 5 [1]. Financial Performance - For Q3 2025, the company reported revenue of CNY 594 million, a year-on-year decline of 11.29%, and a net profit of CNY 93.58 million, down 11.39% [4]. - Year-to-date revenue for the first three quarters was CNY 1.899 billion, down 8.47%, with a net profit of CNY 305 million, a decrease of 10.63% [4]. - The decline in revenue is attributed to insufficient domestic consumer demand, intensified industry price competition, and tax rate adjustments [4]. Business Segment Performance - The medical aesthetics segment generated CNY 575 million, accounting for 44.35% of total revenue, with hyaluronic acid products contributing CNY 347 million, down 16.80% [5]. - The epidermal growth factor products saw revenue of CNY 92.38 million, reflecting a growth of 13.73% [5]. Market Position and Valuation - Haohai's current PE (TTM) ratio is 14.82, below the industry average of 20, indicating potential undervaluation [3]. - Despite the stock price decline, the company maintains a net asset value of HKD 26.93 per share, providing an arbitrage opportunity for investors [7]. - Since August 20, 2023, the proportion of shares held by Hong Kong Stock Connect investors has increased from 30.35% to 35.78% [7]. Strategic Focus on Botulinum Toxin - The company has invested USD 31 million in Eirion to develop various botulinum toxin products, aiming to capture a share of the growing market [9]. - The medical aesthetics injection market is dominated by hyaluronic acid and botulinum toxin, which together account for 65% of the market [10]. - The domestic penetration rate for botulinum toxin is significantly lower than in mature markets, suggesting substantial growth potential [12]. Future Outlook - Despite current performance challenges, the company's ongoing development in the botulinum toxin sector may provide a pathway for recovery [14]. - The collaboration with Eirion is expected to yield new products that could enhance market presence and profitability in the future [14].