Summary of Perfect Diary's Conference Call Company Overview - **Company**: Perfect Diary (完美生物) - **Industry**: Beauty and Skincare Key Financial Performance - **Revenue**: In the first half of 2025, Perfect Diary achieved revenue of 6 billion CNY, a year-on-year increase of 5.21% [2] - **Net Profit**: The net profit attributable to shareholders was 1.86 billion CNY, up 5.21% year-on-year, while the net profit after deducting non-operating losses was 1.77 billion CNY, a growth of 6.64% [3] - **Gross Margin**: The gross margin stood at 74.6%, remaining stable compared to the previous year [3] - **Online vs. Offline Sales**: Online sales accounted for 88.87% of total revenue, growing 37.85% year-on-year, while offline sales declined by 7.07% [2][3] Brand Performance - **Perfect Brand**: Generated 12.5 billion CNY in revenue, a 34.36% increase, representing 70.72% of total revenue [4] - **PL Brand**: Achieved 5.16 billion CNY in revenue, up 23.87%, accounting for 29.22% of total revenue [4] - **Product Highlights**: Eye care products grew by 76.18%, skincare products by 20%, and cleansing products by 11.46% [5] Research and Development - **R&D Investment**: R&D expenses reached 40.69 million CNY, a 13.53% increase [6] - **Patents**: The company has applied for 619 patents, with 365 granted, of which 70% are invention patents [6] - **Innovation Projects**: Three new research projects were initiated, including collagen-based hydrogel development [6] Marketing and Sales Strategies - **Sales Growth**: Sales increased by 150% year-on-year, with marketing expenses decreasing by 14% [10] - **Brand Exposure**: Significant brand exposure achieved through celebrity endorsements and themed marketing campaigns, resulting in a 37% increase in search index on Douyin [11] - **Self-broadcasting Growth**: Self-broadcasting business saw explosive growth, with Q1 and Q2 increasing by 60% and 100% respectively [12] Future Outlook - **Revenue Target**: The company aims for total revenue of 21 billion CNY in 2025, a 50% increase [4] - **Profit Margin Goal**: The target profit margin for the year is set at 12% [4] - **Brand Development**: Plans to continue enhancing brand differentiation and synergy between Perfect and PL brands [9] Market Positioning - **PL Brand Transition**: PL brand has transitioned from a trendy makeup brand to a professional base makeup brand, with a growth target of 30% for the year [15][23] - **Product Series**: The main product series include the collagen series (40-50% of sales), 6D peptide series (30-35%), and anti-aging series (15-20%) [24] Challenges and Strategies - **Market Competition**: The beauty industry is facing intense competition, necessitating a focus on both profit margins and scale [21] - **Investment in Brand Building**: The company emphasizes the importance of brand building alongside immediate sales, planning to maintain brand budgets despite economic challenges [29] Conclusion - **Long-term Vision**: Perfect Diary is committed to long-term growth through innovation, brand development, and a balanced approach to profitability and scale [34]

Group 1 - The stock price of Yatsen Holding (YSG) increased by 3.13% on August 25, reaching $10.56 per share, with a total market capitalization of $991 million [1] - As of June 30, 2025, Yatsen's total revenue is projected to be 1.92 billion RMB, representing a year-on-year growth of 22.48% [1] - The company's net profit attributable to shareholders for the fiscal year 2025 is expected to be -22.97 million RMB, showing a significant year-on-year increase of 88.68% [1] Group 2 - Yatsen Holding Limited is a Cayman Islands-registered holding company that operates primarily through its domestic subsidiary, Guangzhou Yatsen E-commerce Co., Ltd. [2] - Founded in 2016, Yatsen is a leading player in the Chinese beauty market, aiming to create an exciting journey of beauty exploration for consumers in China and worldwide [2] - The company owns several high-growth cosmetic and skincare brands, including Perfect Diary, Little Ondine, Abbys Choice, Galenic, DR.WU, EVE LOM, Pink Bear, and EANTiM, and engages customers through both online and offline channels across major e-commerce, social, and content platforms in China [2]

Core Viewpoint - Estée Lauder reported a significant decline in net sales and a substantial loss for fiscal year 2025, indicating ongoing challenges despite strategic adjustments. The management believes the results align with expectations and reflect the effectiveness of their transformation efforts, particularly in the Chinese market [1][4][6]. Financial Performance - For fiscal year 2025, Estée Lauder's net sales were $14.326 billion, down 8% year-over-year, with a net loss of $1.133 billion, a 390% decline from a profit of $390 million the previous year [3][4]. - Key business segments experienced revenue declines: skincare and scalp care down 12% and 10% respectively, while makeup sales fell by 6%. The operating profit for makeup, fragrance, and scalp care turned negative, with skincare profit down 22% [3][4]. Market Dynamics - The decline in performance is attributed to the underperformance of core brands Estée Lauder and La Mer, which have negatively impacted overall results [3][4]. - The brand's increasing mainstream appeal and lack of innovation have led to diminished competitiveness, with local Chinese beauty brands capturing market share [5][10]. Strategic Focus - Estée Lauder is placing significant emphasis on the Chinese market, forecasting a return to mid-single-digit growth in fiscal year 2026, reflecting initial signs of stabilization [8]. - The company has initiated a major transformation strategy called "Beauty Reimagined," aiming to enhance consumer focus and regain market leadership [6][8]. Innovation and R&D - The company acknowledges a lack of product innovation as a critical issue, planning to hire a new head of R&D to increase the proportion of sales from innovative products to over 25% by fiscal year 2026 [9][10]. - Estée Lauder's R&D spending has been lower than competitors, maintaining a ratio of 1.5%-2%, compared to 3% for L'Oréal and Shiseido, which has contributed to slower product launches [9][10].

Core Viewpoint - The collaboration between Huaxizi and JD Beauty has led to significant growth for Huaxizi, showcasing a successful model for beauty brands to achieve sustainable growth through strategic partnerships and operational upgrades [4][10][17] Group 1: Huaxizi's Growth and Performance - Huaxizi's transaction volume on JD Beauty saw a year-on-year increase of over 60% during the periods of May 20 and June 18, with new customer numbers doubling and daily sales exceeding 300 million [4] - The brand achieved a double-digit year-on-year increase in repurchase rates in the first half of the year, indicating a shift towards high-quality, long-term business rather than just short-term spikes [5] - By the end of 2024, Huaxizi completed foundational work in e-commerce operations on JD Beauty, setting the stage for future growth [9] Group 2: Strategic Collaboration and Operational Upgrades - After a period of reflection, Huaxizi focused on refining its e-commerce fundamentals, reducing reliance on social media exposure, and emphasizing product and store operations [7] - The partnership initiated a "Tenfold Growth Plan" in May 2024, although initial sales performance did not meet expectations, leading to a collaborative review of strategies [7][8] - Through systematic testing of promotional mechanisms and product combinations, Huaxizi's sales performance improved significantly, with new customer numbers increasing by 22 times during the launch of a new product [8] Group 3: Market Positioning and Consumer Insights - The collaboration revealed Huaxizi's potential in the gifting market, with a notable increase in sales from gift scenarios, reaching 40% of total sales during specific campaigns [12] - The introduction of a "Star Promotion" strategy targeting younger female consumers was implemented, resulting in a significant increase in sales and customer engagement [13] - The partnership emphasized the importance of maintaining product quality and innovation, with Huaxizi investing in R&D to enhance its product offerings [15][16] Group 4: Industry Insights and Future Directions - The case of Huaxizi and JD Beauty illustrates a shift in the beauty industry towards sustainable growth models that prioritize product quality and operational efficiency over mere traffic acquisition [10][17] - The collaboration serves as a blueprint for other beauty brands seeking to navigate market uncertainties by building operational capabilities and leveraging platforms that provide systematic support [17]

Core Viewpoint - The luxury goods industry is facing challenges, prompting brands to explore new business avenues such as cosmetics, with Louis Vuitton (LV) entering the beauty market later than its competitors [1][6]. Group 1: LV's Entry into the Beauty Market - LV announced its entry into the beauty sector on August 20, launching a new makeup line in China, which includes a variety of products except eyeshadow [1][3]. - The new makeup line took four years to prepare and features products like 8 palettes of four-color eyeshadows, 10 transparent lip balms, and 55 shades of LV Rouge lipsticks [3][4]. - The first global perfume and beauty boutique was opened in Nanjing, with the Shanghai Hang Lung Plaza being the only offline store for LV beauty products in Shanghai [3][4]. Group 2: Competitive Landscape - LV is the last among top luxury brands to enter the beauty market, with Chanel and Dior having established their beauty lines decades ago [6]. - Chanel's beauty segment accounted for about one-third of its total sales, while Dior has been in the beauty business for nearly 80 years [6]. - Other luxury brands like Gucci and Burberry are also launching beauty products, recognizing the rapid growth and immediate revenue potential of the cosmetics market [8]. Group 3: Market Performance and Trends - The beauty segment has shown resilience amid overall stagnation in luxury goods sales, becoming a bright spot for brands like LVMH, which reported stable revenue in its perfume and cosmetics division [8]. - LVMH's perfume and cosmetics revenue reached €4.082 billion in the first half of the year, a slight decline of 1% year-over-year, indicating a need for independent operational systems to enhance growth [8]. - Despite the potential, the beauty segment's contribution remains limited, with Hermes reporting a 4.1% decline in its beauty and fragrance revenue to €248 million, representing only 3.1% of its total revenue [8].

Core Insights - The article discusses the transformative impact of the Global Engagement Optimization (GEO) framework on brand-user interactions, shifting from traditional marketing to a co-creation model that enhances long-term brand growth [1] Group 1: Brand Connection Challenges - The traditional marketing funnel is becoming ineffective, with consumers exposed to over 5000 ads daily but retaining only 1.2% in memory [1] - The fragmentation of information channels and the shift from linear decision-making to a networked structure of experience, trust, and repurchase are highlighted [1] - A survey indicates that 83% of Gen Z consumers will permanently abandon a brand after a negative experience, while only 17% are willing to give a second chance [1] Group 2: GEO Framework for Connection Reconstruction - The GEO model reconstructs connections through three dimensions: Global touchpoint layout, Emotional value embedding, and Open ecosystem operation [2] - The elevation of touchpoints includes integrating physical and digital experiences, exemplified by a smart home brand that increased repurchase rates by 240% through predictive service reminders [2] - The narrative revolution emphasizes the need for brands to engage in liquid storytelling, as seen in a new energy vehicle brand that shortened product development cycles by 30% and achieved a pre-sale conversion rate 3.6 times the industry average [2] - Companies utilizing the GEO model have a user data utilization rate of 78%, significantly above the industry average [2] Group 3: Technological Innovations Driving GEO Implementation - AIGC is reshaping content production, with 42% of brands expected to use AI-generated personalized content by 2025, leading to a 17-minute increase in user interaction time per month [3] - Blockchain technology is enhancing trust mechanisms, with a system that reduces counterfeit complaints by 92% through product lifecycle traceability [3] - The metaverse is creating immersive experiences, as demonstrated by a fast-moving consumer goods brand that received product ideas from 137 countries within three months [3] Group 4: Value Measurement System for Long-term Connections - The GEO model necessitates new evaluation dimensions, including Relationship Temperature Index (RTI), which shows that a 1-point increase in RTI can boost user lifetime value by 23% [4] - Co-creation Value Pool (CVP) measures the commercial value generated from user participation in product improvements, with a digital brand generating an additional 120 million yuan annually from user-developed plugins [4] - Ecosystem Health Index (EHI) monitors the collaborative state among users, partners, and the social environment, with leading companies beginning to publish sustainability reports [4] Group 5: Future Challenges in GEO Strategy Implementation - Brands must be cautious of data ethics boundaries, as excessive personalization can lead to negative user experiences, exemplified by a social platform that saw a 15% drop in daily active users due to precise recommendations [6] - The fairness of value distribution is a new challenge, focusing on how to share benefits through token economies when users contribute data and ideas [7] - Organizational capabilities need restructuring, with traditional marketing departments evolving into user growth centers, as seen in a multinational company appointing a Chief Experience Officer [8]

Core Viewpoint - The company demonstrated accelerated growth in Q2 2025, with revenue reaching 2.5 billion, a year-over-year increase of 9.02%, and net profit attributable to shareholders at 123 million, up 16.54% year-over-year [1] Financial Performance - In Q2 2025, the company achieved revenue of 1.414 billion, reflecting a year-over-year growth of 12.16%, and net profit of 81 million, which is a 23.76% increase year-over-year [1] - The company's gross margin and net margin for Q2 2025 were 65.27% and 5.77%, respectively, showing improvements of 3.67 and 0.48 percentage points year-over-year [2] Business Segments - The self-owned brand segment generated revenue of 1.039 billion in H1 2025, accounting for 41.55% of total revenue, with a gross margin of 76.83%, up 5.7 percentage points year-over-year [1] - The company is focusing on high-end brands such as Ifidan, Perheqiao, and Revive, with Revive contributing significantly to revenue growth after its acquisition [1] - The agency operation business is returning to normal development, focusing on leading brands like Dabao and Mistick, which has stabilized overall profit margins [2] Product Categories - In H1 2025, the water, milk, and cream category generated revenue of 1.997 billion, a year-over-year increase of 11.70%, while the mask category achieved revenue of 423 million, up 17.96% year-over-year [2] Sales Channels - The company primarily utilizes online e-commerce channels, with revenue from Taobao platforms at 595 million, a year-over-year increase of 3.63%, and from Douyin platforms at 998 million, up 16.11% year-over-year [2] Cost Structure - In Q2 2025, the sales, management, and R&D expense ratios were 48.47%, 4.80%, and 1.62%, respectively, reflecting increases of 1.20, 0.90, and 0.52 percentage points year-over-year [2]

Core Viewpoint - Marubi Biological achieved a revenue growth of 30.83% year-on-year, contrasting with a mere 5.21% increase in net profit, indicating a structural adjustment in the beauty industry where the company is prioritizing online direct sales over profitability [2][7]. Revenue Performance - In the first half of the year, Marubi Biological reported a revenue of 1.769 billion yuan, up from 1.352 billion yuan in the same period last year, marking a significant acceleration in growth [2][4]. - The overall cosmetics retail sales in China grew by only 2.9%, significantly lower than the 5% increase in total retail sales, highlighting Marubi's outperformance in a sluggish market [2]. Brand Strategy - The main brand Marubi continues to strengthen its position in eye care, while the new makeup brand Lianhuo focuses on foundation products, contributing to a diversified product matrix [4]. - Marubi's core products, such as the peptide eye cream and collagen essence, have driven substantial revenue, with the new collagen mask achieving top sales on Tmall [4]. Channel Performance - Online sales accounted for 89% of total revenue, growing by 37.9%, while offline sales declined by 7.1%, indicating a strong shift towards online channels [6]. - Tmall serves as the primary online platform for Marubi, with top products accounting for 73% of sales, and membership transactions increasing by 28% [6]. Profitability Challenges - The company's net profit for the first half was 186 million yuan, a modest increase of 5.21%, with a significant drop in net profit in the second quarter [7][8]. - Sales expenses surged to 1 billion yuan, with a sales expense ratio of 56.53%, far exceeding competitors, driven by high marketing costs [8][10]. Marketing and Cost Structure - Advertising expenses reached 905 million yuan, a 42.97% increase from the previous year, contributing to the disparity between revenue growth and profit [10][12]. - The overall gross margin slightly decreased to 74.6%, with a more pronounced decline in the second quarter, indicating pressure on profit margins due to pricing strategies and cost structures [10][12]. Industry Context - The trend of "spending to gain volume" is prevalent in the beauty industry, where companies must continuously invest in marketing to avoid revenue stagnation [12].

Group 1: Industry Dynamics - Valentino appointed Riccardo Bellini as the new CEO, effective September, to replace Jacopo Venturini [3] - Guess announced a privatization deal valued at approximately $1.4 billion with Authentic Brands Group, marking a strategic shift for the company [4] - L'Oréal decided to shut down its recently acquired makeup brand Healus, retaining only the skincare brand Dr.G, indicating a strategic business adjustment [5] Group 2: Company Performance - Coty reported a 4% decline in net revenue for the fiscal year 2025, with a net loss of $381 million, attributed to goodwill impairment [8][9] - Estée Lauder's net sales for fiscal year 2025 fell by 8% to $14.326 billion, with significant operating losses due to various factors including goodwill impairment [10][11] - Li Ning's revenue grew by 3.3% to 14.817 billion RMB, with a net profit of 1.737 billion RMB, reflecting a stable financial performance [2] Group 3: Notable Growth - Pop Mart's revenue surged by 204.4% to 13.88 billion RMB, with net profit increasing by 396.5%, driven by the success of the Labubu product line [6] - Perfect Moment's revenue increased by 51% to $1.5 million in Q1 2025, although the company still reported a net loss [12] - Pandora's Q2 revenue grew by 8%, reaching 7.075 billion DKK, despite plans to close up to 100 stores in China [12] Group 4: Market Challenges - Estée Lauder's stock fell by 9% in pre-market trading after reporting lower-than-expected profits, highlighting ongoing market pressures [10] - Coty anticipates a revenue decline of 6% to 8% in Q1 2026, indicating continued challenges in stabilizing growth [9] - The frequent personnel changes among major brands reflect common strategies to navigate a challenging market environment [4]

Economic Growth and Development - Tibet is leading the nation in economic growth with GDP growth rates of 9.5% and 6.3% for 2023 and 2024 respectively, and a 7.2% growth rate in the first half of 2023, surpassing the national average by 1.9 percentage points [1][3] - The region aims for a GDP growth of over 7% by 2025, with aspirations to reach 8% [1] Policy Support and Capital Market Development - The "Galsang Flower Action" plan was introduced to promote enterprise listings, marking a significant step in Tibet's capital market development [5] - Since 2016, the China Securities Regulatory Commission has implemented favorable IPO policies for Tibetan enterprises, allowing for immediate review and approval [6] - In 2024, 22 listed companies in Tibet contributed 24.83 billion yuan in taxes, accounting for 14% of the region's tax revenue [6] Financial Sector Growth - Tibet has the lowest loan interest rates in the country, with an average of 1.46% as of the second quarter of 2023, benefiting small and medium enterprises [7] - The financial sector is projected to achieve a value-added of 266.82 billion yuan in 2024, with a year-on-year growth of 15.9% [10] Resource Utilization and Industry Development - Tibet's unique ecological resources are being leveraged for industrial investment, particularly in clean energy and mineral resources [12][15] - The Yarlung Tsangpo River hydropower project, with an investment of approximately 1.2 trillion yuan, aims to generate 60 million kilowatts of installed capacity [12] Tourism and Cultural Integration - The tourism sector is capitalizing on Tibet's unique ecological environment, with new product launches aimed at enhancing visitor experiences [13] - The region is promoting a blend of tourism with health and wellness, as well as cultural experiences to cater to diverse consumer needs [13] Industry Case Studies - Ganlu Tibetan Medicine Co., a leading Tibetan medicine enterprise, is actively pursuing international markets and aims for a revenue of over 300 million yuan this year [9][10] - Natural堂 has established a research center in Tibet, utilizing local resources for cosmetic products, demonstrating the potential for value addition through local resource utilization [14]