Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of over 15% within the next six months [5]. Core Insights - The company achieved a revenue of 9.178 billion yuan in 2025, representing a year-on-year growth of 35.12%, with a net profit attributable to shareholders of 1.103 billion yuan, up 41.14% year-on-year [1]. - The company's main brand, Han Shu, continues to show strong growth, contributing 7.36 billion yuan in revenue, a 31.6% increase year-on-year, and accounting for 80.2% of total revenue [1]. - The online sales channel has seen rapid growth, with revenue reaching 8.618 billion yuan, a 40.1% increase year-on-year, while offline sales have declined by 14.3% [2]. - The gross profit margin for 2025 was 76.43%, an increase of 1.21 percentage points year-on-year, indicating stable profitability [3]. Financial Summary - The company forecasts revenues of 11.438 billion yuan, 13.795 billion yuan, and 16.274 billion yuan for 2026, 2027, and 2028, respectively, with net profits projected at 1.391 billion yuan, 1.699 billion yuan, and 2.063 billion yuan [4]. - The earnings per share (EPS) are expected to rise from 2.77 yuan in 2026 to 5.18 yuan in 2028, reflecting a strong growth trajectory [4]. - The price-to-earnings (P/E) ratio is projected to decrease from 14.23 in 2026 to 9.60 in 2028, suggesting an attractive valuation as earnings grow [4].

Investment Rating - The report assigns a rating of "Accumulate" for the company [5]. Core Insights - The company is expected to achieve revenue and net profit growth of 35% and 44% year-on-year in 2025, respectively, with accelerated growth in the second half of the year [1]. - The brands Han Shu and Yi Ye are projected to have revenue growth of 32% and 134% year-on-year, respectively, indicating a strong outlook for the company's multi-category and multi-brand expansion [1]. - The report highlights the significant recovery of the Han Shu brand, with sales on Douyin increasing by 37% year-on-year, and the introduction of new mid-to-high-end brands is expected to enhance the product matrix [9]. Financial Summary - Total revenue is projected to reach 9,178 million RMB in 2025, reflecting a year-on-year increase of 35.1% [3]. - Gross profit is expected to be 7,015 million RMB in 2025, with a gross margin of 76.4%, up 1.2 percentage points year-on-year [9]. - The net profit attributable to the parent company is forecasted at 1,103 million RMB for 2025, representing a 41.1% increase year-on-year [3]. - The company anticipates a sales expense ratio of 58.4% and a management expense ratio of 3.5% for 2025, with a net profit margin of 12.6%, up 0.8 percentage points year-on-year [9]. Brand Performance - Revenue from the Han Shu brand is expected to reach 736 million RMB in 2025, growing by 32% year-on-year, while Yi Ye is projected to achieve 88 million RMB, with a remarkable growth of 134% [9]. - The report notes that the Yi Ye brand's top product, Anxin Cream, has seen a sales increase of 96% year-on-year, maintaining its position as the category leader [9]. - The company is expanding its brand matrix with the introduction of new products, including a mid-to-high-end anti-hair loss hair care brand and a skincare brand developed in collaboration with Shanghai Ninth People's Hospital [9].

Investment Rating - The report assigns a rating of "Accumulate" for the company [5]. Core Insights - The company is expected to achieve revenue and net profit growth of 35% and 44% year-on-year in 2025, respectively, with accelerated growth in the second half of the year [1]. - The brands Han Shu and Yi Ye are projected to have revenue growth of 32% and 134% year-on-year, respectively, indicating a strong multi-category and multi-brand expansion strategy [1]. - The report highlights the company's robust performance in the second half of 2025, with revenue, net profit, and attributable net profit expected to reach 5.07 billion, 598 million, and 579 million RMB, respectively, reflecting year-on-year growth of 54%, 53%, and 52% [9]. Financial Summary - The total revenue for 2024 is projected at 6,793 million RMB, increasing to 9,178 million RMB in 2025, representing a growth rate of 35.1% [3]. - Gross profit is expected to rise from 5,109 million RMB in 2024 to 7,015 million RMB in 2025, with a gross margin of 76.4%, an increase of 1.2 percentage points year-on-year [9]. - The attributable net profit is forecasted to grow from 781 million RMB in 2024 to 1,103 million RMB in 2025, reflecting a year-on-year increase of 41.1% [3]. - The report anticipates a PE ratio of 15.63 for 2024, increasing to 23.13 in 2025, before declining to 10.93 by 2028 [3]. Brand Performance - The Han Shu brand is expected to achieve a revenue of 736 million RMB in 2025, with a year-on-year growth of 32%, while Yi Ye is projected to reach 88 million RMB, with a remarkable growth of 134% [9]. - The report notes that Han Shu's sales on Douyin are expected to grow by 37% year-on-year, with significant growth also seen on platforms like Kuaishou and Pinduoduo [9]. - Yi Ye's flagship product, Anxin Cream, is projected to maintain its position as the top seller with a year-on-year sales increase of 96% [9].

Investment Rating - The investment rating for the company is "Buy" [2][17]. Core Insights - The company is expected to achieve a revenue growth of 34%-35% year-on-year and a net profit growth of 42%-44% in 2025, driven by the expansion of multiple product categories and the growth of the Han Shu brand [3][10]. - The company forecasts a revenue of 9.16 billion RMB and a net profit of 1.1 billion RMB for 2025, with significant growth in the second half of the year [10][11]. - The Han Shu brand is projected to grow by over 30%, with strong performance in key channels like Douyin, while the Yi Ye brand is expected to see revenue more than double in 2025 [10][11]. Financial Summary - Total revenue is projected to increase from 6.79 billion RMB in 2024 to 9.16 billion RMB in 2025, reflecting a growth rate of 34.9% [5][11]. - The net profit is expected to rise from 781 million RMB in 2024 to 1.1 billion RMB in 2025, indicating a growth of 40.8% [5][11]. - The gross profit margin is anticipated to improve, with a net profit margin of 12.5%-12.6% for 2025, up by 0.7-0.8 percentage points year-on-year [10][11]. Market Data - The current stock price is 60.40 HKD, with a market capitalization of 24.046 billion HKD [2][7]. - The stock has traded within a range of 36.55 to 102.40 HKD over the past 52 weeks [7].

Industry Overview - The beauty industry is showing signs of recovery, with a reported 8.8% year-on-year growth in retail sales of cosmetics for December 2025 according to the National Bureau of Statistics [1] - In January 2026, Douyin's beauty GMV increased by over 20% year-on-year, indicating improved daily sales and self-broadcasting efforts by brands [1] Company Insights - According to a report by Guotai Junan, the main brand of Shangmei Co., Han Shu, continues to expand its product categories, while sub-brands Yiye and Anminyou are experiencing significant growth in single products, suggesting a strong multi-brand strategy that could drive future growth [2] Stock Performance - Over the past week (February 5 to February 11, 2026), Shangmei Co.'s stock price has experienced a downward trend, with a decline of 2.61%. The stock reached a high of 67.95 HKD and a low of 62.10 HKD, with a trading volume of approximately 334 million HKD. Technical indicators show that MACD is in negative territory and KDJ is weak, indicating pressure on the stock price [3]

Core Viewpoint - The beauty industry is expected to maintain steady growth in 2026, driven by product innovation and the rise of domestic brands, with Douyin's beauty GMV projected to grow over 20% year-on-year in January 2026, reflecting a marginal improvement during the off-season due to brand efforts in daily sales and self-broadcasting, alongside the impact of the Spring Festival timing [1][2]. Group 1: Strong Product and Brand Momentum - Companies with strong product and brand momentum are expected to achieve high growth through new product launches and category expansions, such as Ruoyuchen, which is focusing on high-end household cleaning and health products [3]. - Beijiaojie is maintaining stable performance in oral care and is expected to benefit from the trend of AKK ingredients in its probiotic raw material business [3]. - Maogeping is positioned as a high-end brand with ongoing expansion in offline counters and online sales, anticipating rapid growth across multiple product lines [3]. - Linqingxuan is benefiting from the trend of oil-based skincare, with its flagship essence oil performing well and new products showing promise [3]. - Shangmei Co. is expanding its main brand Han Shu and sub-brands, with strong growth expected from key products [3]. Group 2: Leading Brands with Strong Asset Value - Beitanie has been actively adjusting its channel and inventory mechanisms since 2025, leading to product structure upgrades and profit recovery, with strong GMV growth in January 2026 [4]. - Proya is expected to have a clear new product strategy in 2026, launching several key products and expanding its sub-brands to drive steady growth [4]. Investment Recommendations - Companies with strong fundamentals and high growth potential recommended for increased holdings include Ruoyuchen, Beijiaojie, Maogeping, Linqingxuan, and Shangmei Co. [5]. - Companies showing signs of bottom improvement include Beitanie, Proya, Dengkang Oral, Shanghai Jahwa, and Runben Co. [5].

Industry Overview - The Chinese beauty industry is transitioning from "incremental expansion" to "stock game," indicating a shift towards a mature market with a projected market size of 465.3 billion yuan by 2025, reflecting a 5.1% year-on-year growth [1] - Domestic brands are gaining market share by accurately understanding local consumer needs and demonstrating agile operational responses, evolving from market participants to market leaders [1] - The competition has shifted from traffic acquisition to a systematic comparison of brand strength, product technology, and sustainable innovation capabilities, leading to a concentration of resources among top companies with established multi-brand matrices and platform operations [1] Company Performance - The company has successfully transformed from a "single-core drive" to a "platform group," with its main brand, Han Shu, contributing 3.344 billion yuan in revenue in the first half of 2025, shifting growth from reliance on Douyin to expanding into men's skincare and high-end hair care [2] - The company has validated its brand incubation capabilities, with the "Yi Ye" brand representing a second growth curve, achieving a 146.5% year-on-year revenue increase to 397 million yuan in the same period [2] - Emerging brands like An Min You and Ji Fang are also showing strong growth, contributing to the company's long-term multi-brand matrix [2] Long-term Strategy - The company has outlined a clear blueprint to achieve 30 billion yuan in sales by 2030, driven by three core strategies: the implementation of research results, expansion of brand categories, and deepening global layout [3] - The company plans to enhance its product efficacy through the expansion of technology matrices like X-peptide and leverage global expert resources [3] - The company aims to establish local manufacturing and operations in Southeast Asia while applying AI in production and marketing to improve operational efficiency, supporting the long-term revenue target [3] - Expected EPS for the company from 2025 to 2027 is projected to be 2.73, 3.41, and 4.04 yuan respectively, maintaining a "buy" rating [3]

Investment Rating - The report maintains a "Buy" rating for the company, indicating a projected investment return that exceeds the market benchmark by over 20% in the next 6-12 months [6]. Core Insights - The Chinese beauty industry is transitioning from "incremental expansion" to "stock game," with the market expected to reach a scale of 465.3 billion yuan by 2025, reflecting a 5.1% year-on-year growth, marking the maturity of the market [1][6]. - Domestic brands are gaining market share due to their understanding of local consumer needs and agile operations, shifting from market participants to leaders [1]. - The competition has evolved from traffic acquisition to a systematic comparison of brand strength, product technology, and sustainable innovation capabilities [1]. Summary by Relevant Sections Company Performance - The company has successfully transitioned from a "single-core drive" to a "platform group" strategy, with its main brand, Han Shu, contributing 3.344 billion yuan in revenue in the first half of 2025, driven by the expansion into men's skincare and high-end hair care [2]. - The second growth curve represented by the "Yi Ye" brand has seen a revenue surge of 146.5% year-on-year to 397 million yuan [2]. Long-term Growth Strategy - The company has set a clear goal to achieve 30 billion yuan in sales by 2030, supported by three core drivers: scientific research outcomes, brand category expansion, and deepening global layout [3]. - The application of AI in production and marketing, along with talent development, is expected to enhance operational efficiency and support the long-term revenue target [3]. Financial Projections - Revenue is projected to grow from 4.191 billion yuan in 2023 to 12.646 billion yuan in 2027, with a compound annual growth rate (CAGR) of 56.6% in 2024 and 27.4% in 2025 [4]. - Net profit is expected to increase from 461 million yuan in 2023 to 1.609 billion yuan in 2027, with a significant growth rate of 213.5% in 2024 [4]. - Earnings per share (EPS) are forecasted to rise from 1.16 yuan in 2023 to 4.04 yuan in 2027, reflecting strong profitability [4].

Summary of the Conference Call Transcript Company Overview - **Company**: Shanghai Shumei Cosmetics Co., Ltd. (上美股份) - **Stock Code**: 2145.HK - **Current Stock Price**: 74.80 HKD (as of January 21, 2026) - **Target Price**: 116.00 HKD (by December 2026) [2][12] Key Points and Arguments Financial Projections - **2026 Goals**: - Revenue and profit are expected to grow by 25% year-on-year, driven by: - Han Shu (韩束) sales growth of 20% - Yi Ye (一页) sales growth exceeding 50% - Emerging brands (e.g., An Min You) gradually increasing sales [1][4] - **Revenue Forecast**: - FY2026 revenue projected at 10,839 million HKD, with a growth rate of 25.5% [7][13] - FY2027 revenue projected at 12,911 million HKD, with a growth rate of 19.1% [7][13] Operational Recovery - Previous controversies are fading, with operational metrics (daily sales, return rates, traffic acquisition) returning to normal levels due to rapid responses from the company, including: - Live streaming from factories and R&D centers - Collaborations with official media - Long-term brand-building activities, such as advertisements featuring well-known actors [1][4] International Expansion - Mid-term goal to achieve sales of 3 billion HKD by 2030, with 2026 serving as a foundational year [1][4] Shareholder Returns - Dividend payout ratio is expected to maintain at approximately 38% in the first half of 2025 [1][4] Market Position and Trends - The company is expected to benefit from the rapid growth of the Chinese beauty industry and the "Guochao" (national trend) phenomenon, leveraging a successful multi-brand portfolio, robust R&D, comprehensive sales network, and increasing brand value [1][8] Emerging Brands Performance - **Han Shu**: Targeting a 20% sales increase in 2026, with Douyin (TikTok) as a major contributor [4] - **Yi Ye**: Aiming for over 50% sales growth in 2026, driven by an expanded customer base and product offerings [4] - **An Min You**: Projected sales of 400 million HKD in 2026, with stable daily sales and profit margins [4] - **Ji Fang**: Targeting sales of 100 to 200 million HKD in 2026 [4] Financial Metrics - **Earnings Per Share (EPS)**: - FY2026 adjusted EPS projected at 3.67 HKD, with a growth rate of 27.4% [7][13] - **Profit Margins**: - Gross margin expected to be 78.2% in FY2026 [7][13] - EBITDA margin projected at 14.5% [7][13] Risks and Catalysts - **Downside Risks**: - Potential decline in product quality, inflation, challenges in new brand incubation, and government regulations [14] - **Upside Catalysts**: - Successful incubation of new brands and better-than-expected growth of main brands [15] Conclusion - The company maintains a "Buy" rating with a target price of 116 HKD, reflecting a favorable outlook based on projected growth in the beauty sector and effective operational strategies [1][12]

Core Viewpoint - Guojin Securities has initiated coverage on Shumei Co., Ltd. (02145), recognizing it as a leading player in China's beauty and personal care industry, with a multi-brand matrix across skincare, baby care, and hair care sectors. The company primarily utilizes online channels and is expected to achieve strong growth, particularly with its main brand, Han Shu, and new brand development, leading to a target price of HKD 109.78 based on a 2025 PE of 30 times, with a "Buy" rating assigned [1]. Group 1: Company Development and Strategy - The company's multi-brand expansion strategy shares similarities with Anta Sports, focusing on market-driven approaches, precise brand positioning, and effective marketing to quickly address consumer pain points [2]. - The trend of refined channel operations is evident as the company restructures its channel strategy around Douyin, leveraging innovative marketing and increasing self-broadcasting to achieve significant revenue and profit growth [2]. - The company ensures a steady supply of core management talent through a dual approach of internal training and external recruitment, which supports differentiated development across its brands [2]. Group 2: Growth Projections and Market Position - The company is expected to achieve substantial growth in its three main segments: skincare, baby care, and hair care, with Han Shu projected to exceed CNY 10 billion in revenue within three years [3]. - In the skincare segment, Han Shu has seen a significant market share increase through Douyin, with projected revenue growth of over 80% in 2024, despite a slowdown in H1 2025 due to channel adjustments [3]. - The baby care brand, Yiye, is experiencing rapid growth with a unique "medical research co-creation" model, expected to achieve a compound annual growth rate of over 50% in the next three years [3]. - The hair care segment is anticipated to produce major brands, with a focus on clear positioning and consumer mindset development, as well as entering faster-growing segments like anti-hair loss [3]. Group 3: Financial Forecasts - The company achieved an online sales ratio of nearly 93% in H1 2025, with Han Shu's rapid growth through Douyin contributing to projected revenues of CNY 5.591 billion in 2024, reflecting an 80.9% year-on-year increase [4]. - New brands like Yiye are also rapidly gaining traction, with projected growth rates of 498% for 2023 and 146% for H1 2025 [4]. - Earnings per share (EPS) forecasts for 2025-2027 are estimated at CNY 2.68, CNY 3.33, and CNY 4.09, respectively, with a valuation of 24 times for 2026 [4].