Investment Rating - The report maintains a "Positive" outlook on the cosmetics and medical beauty industry, indicating potential growth opportunities in the sector [2]. Core Insights - The domestic brands showcased strong performance on Douyin, with Feicui achieving a GMV of nearly 500 million, marking a new high for the year [6][12]. - The cosmetics and medical beauty sector performed in line with the market, with the Shenwan Beauty Care Index rising by 1.6% from May 30 to June 6, 2025 [6][7]. - International cosmetic companies are experiencing a decline or slowdown in growth, with L'Oréal's Q1 2025 revenue growth at 4.4%, and Estée Lauder facing a significant drop in revenue and operating profit [13][15][16]. Summary by Sections Industry Performance - The Shenwan Beauty Care Index increased by 1.6%, while the Shenwan Cosmetics Index rose by 0.7%, slightly underperforming the Shenwan A Index [6][7]. - Domestic brands like Marubi and Yilian have shown over 50% growth in skincare, while color cosmetics brands like Caitang and Maogeping achieved over 70% growth [12]. Key Developments - Leping Medical's "童颜针" (Youthful Needle) received approval, marking a competitive entry into the domestic market for facial fillers [26]. - Furuida's synthetic royal jelly acid (10-HDA) has achieved industrialization, providing a high-purity ingredient for anti-aging products [27]. Investment Recommendations - Recommended stocks include: 1. Upstream companies with strong R&D capabilities and profitability, such as Aimeike [17]. 2. Brands benefiting from Douyin traffic, like Marubi [17]. 3. Companies with strong product innovation and cost-effectiveness, such as Runben and Furuida [17]. - Suggested to pay attention to Shanghai Jahwa, Betaini, Huaxi Biological, and Water Sheep [17]. Market Trends - The cosmetics market in China is projected to grow, with a retail sales increase of 7.2% in April 2025, indicating a recovery in consumer demand [23][25]. - The market share of domestic brands in the skincare segment has improved significantly, with domestic brands occupying five out of the top ten positions in market share [36][37].

Investment Rating - The report maintains an "Overweight" rating for the cosmetics and medical beauty sector, with specific recommendations for various companies based on their market positions and growth potential [5][12][17]. Core Insights - The cosmetics and medical beauty sector has shown weaker performance compared to the market, with the Shenwan Beauty Care Index rising by 1.7% from April 30 to May 9, 2025, which is lower than the Shenwan A Index by 0.6 percentage points [5][6]. - The "Jumeili Conference" held in Shanghai highlighted the industry's development direction amidst a challenging environment, emphasizing the importance of technology-driven beauty, refined operations, and AI assistance [5][12]. - Domestic brands are gaining traction, while international brands are also experiencing growth, with Estee Lauder reporting a return to positive growth in key brands in China during Q1 2025 [5][12][28]. Summary by Sections Industry Performance - The cosmetics and medical beauty sector's performance has been below market expectations, with the Shenwan Cosmetics Index increasing by 2.8%, outperforming the Shenwan A Index by 0.5 percentage points [5][6]. - The report notes a competitive landscape where domestic brands are aggressively entering the market, prompting international brands to rebound [5][12]. Company Analysis - Shanghai Jahwa's Q1 2025 results showed a revenue of 1.704 billion yuan, down 10.59% year-on-year, with a net profit of 217 million yuan, down 15.25% [5][13]. - Estee Lauder's Q3 2025 results indicated a net sales figure of 3.55 billion USD (approximately 25.8 billion yuan), a 10% decline year-on-year, but with a notable increase in gross margin [5][28]. - The report highlights the employee stock ownership plan at Shanghai Jahwa, aimed at binding key personnel and setting profit recovery targets for 2025 [5][17]. Market Trends - The report indicates that the retail sales of cosmetics in Q1 2025 reached 114.9 billion yuan, with a year-on-year growth of 3.2% [22][26]. - The domestic skincare market is projected to continue growing, with local brands capturing a significant market share, reflecting a shift in consumer preferences towards domestic products [36][38]. E-commerce Insights - The report provides data on the performance of domestic brands on e-commerce platforms, with notable growth in GMV for brands like Proya and Marubi [20][19]. - The overall e-commerce landscape for cosmetics is evolving, with brands leveraging social media platforms to enhance visibility and sales [5][12].

Investment Rating - The report maintains a "Buy" rating for the cosmetics and medical beauty industry, highlighting the potential for domestic brands to gain market share and improve competitive dynamics [4]. Core Insights - The domestic beauty market is expected to see an optimization in competitive dynamics, driven by a rise in domestic consumption and a retreat of international brands due to increasing geopolitical uncertainties [9][10]. - The cosmetics and medical beauty sector outperformed the market during the period from April 3 to April 11, 2025, with the Shenwan Beauty Care Index declining by 2.5%, which is better than the Shenwan A Index's decline of 1.9 percentage points [5][6]. Summary by Sections Industry Performance - The cosmetics and medical beauty sector showed resilience, with key indices performing better than the overall market, indicating a positive trend for domestic brands [5][6]. - The report notes that the retail sales growth for cosmetics in January and February 2025 was 4.4%, outperforming the overall retail sales growth of 4.0% [23]. Market Trends - According to Euromonitor data, the market for domestic skincare and makeup brands is on the rise, with significant improvements in market share for brands like Proya and Natural Hall, which have entered the top ten in market share [9][35]. - The report anticipates that domestic brands will continue to benefit from the trend of rising domestic consumption, especially as international brands face challenges [10][35]. Company Performance Forecasts - For Q1 2025, several companies are expected to report positive growth: - Up Beauty Co. is projected to see a revenue and net profit increase of 10% year-on-year [11]. - Marubi is expected to achieve a revenue increase of 40% and a net profit increase of 35% [11]. - Proya is forecasted to have a revenue increase of 8% and a net profit increase of 10% [11]. - The report highlights that companies like Giant Biological and Mao Geping are also expected to see significant growth, with revenue and net profit both projected to increase by 40% and 25% respectively [11]. Investment Recommendations - The report recommends focusing on companies with strong brand matrices and high growth potential, such as Up Beauty Co., Proya, and Marubi, which are well-positioned to leverage the e-commerce boom [14]. - It also suggests keeping an eye on companies like Shanghai Jahwa and Betaini, which are expected to perform well in the upcoming quarters [14]. Industry Dynamics - The report discusses the entry of four prominent researchers into Proya, indicating a strong focus on technological innovation and talent development within the company [26]. - The competitive landscape in the medical beauty sector is evolving, with new products and innovations expected to drive growth and market share for companies like Jinbo Biological and Huaxi Biological [29][30].

Group 1: Macro and Strategy Insights - The manufacturing PMI recorded a slight increase to 50.5% in March, with production and new orders indices rising marginally [8] - The report emphasizes the importance of pricing long-term positive factors during market adjustments, suggesting that the market is transitioning to a more pragmatic stance [9] - The bond market is expected to perform well due to the unexpected tariffs, with a shift towards a steeper yield curve anticipated [16] Group 2: Financial and Real Estate Sector - The banking sector is expected to maintain stable performance with better-than-expected interest margins, focusing on high-dividend stocks [19] - The real estate sector is under pressure but is expected to show signs of bottoming out, with the importance of stabilizing the sector increasing amid trade tensions [23] - Construction investment is anticipated to recover, driven by improvements in manufacturing PMI and external shocks [25] Group 3: Materials and Energy Sector - Oil prices have declined due to OPEC's production increase and tariff impacts, but shale oil costs provide strong support for prices [26] - The chemical sector is responding to U.S. tariffs with a focus on self-sufficiency, highlighting the importance of domestic production trends [31] - The coal market is expected to stabilize as demand increases with the arrival of the peak season, supported by fiscal policies [36] Group 4: Consumer and Healthcare Sector - The pharmaceutical industry remains optimistic despite potential tariff impacts, particularly in the innovative drug supply chain [24] - The agricultural sector is under scrutiny due to unexpected tariff policies, with a focus on investment opportunities in various sub-sectors [11] Group 5: Technology and AI Sector - The AI industry is experiencing significant breakthroughs, with a focus on domestic computing power and the emergence of physical AI as a new frontier [4] - The report highlights the potential for AI applications in low-digital penetration sectors such as finance, education, and healthcare [4]

Investment Rating - The report maintains a "Buy" rating for the company based on its growth potential and market positioning [16]. Core Insights - The report highlights the increasing government support for fertility policies, which is expected to boost the maternal and infant sector, leading to a rise in related consumption [12][11]. - The company is positioned to benefit from the growing demand for health and wellness products, particularly in the context of traditional Chinese medicine and modern health trends [16][14]. - The report emphasizes the importance of stable housing prices in driving consumer spending, linking real estate stability to overall economic recovery [15][12]. Summary by Sections Fertility and Maternal-Infant Sector - The government has introduced various policies to encourage childbirth, including financial subsidies and improved childcare services, which are expected to positively impact the maternal and infant market [12][11]. - Local governments are also implementing supportive measures, such as direct financial incentives for families with multiple children [12]. Real Estate and Consumer Spending - The report discusses the correlation between housing prices and consumer spending, noting that a stable real estate market is crucial for economic recovery [15]. - Recent government actions aim to stabilize housing prices and support consumer demand, indicating a proactive approach to economic management [15][12]. Company Performance and Market Position - The company has a diversified product portfolio that includes traditional health products and modern wellness items, positioning it well to capture market growth [16][14]. - The report forecasts significant revenue growth for the company, driven by the increasing demand for its health-related products and the expansion of its market reach [16].