Investment Rating - The report maintains a positive outlook on the cosmetics and medical beauty sector, with specific recommendations for companies like Maogeping and Shangmei Co. [4][9] Core Insights - The cosmetics and medical beauty sector underperformed the market during the reporting period, with the Shenwan Beauty Care Index declining by 3.1% [5] - The upcoming Double 11 shopping festival is expected to boost sales for Shangmei Co. and Maogeping, with strong performance anticipated on platforms like Douyin and Tmall [4][9] - Key companies such as Proya and Shanghai Jahwa reported mixed results, with Proya's revenue for Q3 2025 at 1.736 billion yuan, down 11.63% year-on-year, while Shanghai Jahwa's revenue grew by 28% to 1.483 billion yuan [10][15] Summary by Sections Industry Performance - The cosmetics and medical beauty sector showed a decline, with the Shenwan Cosmetics Index down 2.6% and the Shenwan Personal Care Index down 0.9% [5] - The top-performing stocks included *ST Meigu (+12.3%) and Jinsong New Materials (+6.2%), while Huaxi Biological and Beitaini saw declines of 7.8% and 7.4%, respectively [5] Company Performance - Proya's Q3 2025 revenue was 1.736 billion yuan, a decrease of 11.63% year-on-year, with a net profit of 227 million yuan, down 23.64% [10] - Shanghai Jahwa reported Q3 revenue of 1.483 billion yuan, an increase of 28%, with a net profit of 140 million yuan [15] - Ruoyuchen's Q3 revenue reached 819 million yuan, up 123.4% year-on-year, with a net profit of 33 million yuan [18] Market Trends - The 8th China International Import Expo showcased major international beauty brands, highlighting trends such as high-end market targeting and AI technology in beauty research and development [27] - The report indicates that the Chinese market is evolving into a global innovation hub for beauty products, with a focus on sustainability and green transformation [27] E-commerce Insights - The report provides data on the performance of domestic brands on platforms like Douyin and Tmall, with Shangmei Co. achieving significant growth in GMV [21] - The overall retail sales of cosmetics in September 2025 grew by 8.6%, driven by pre-Double 11 promotions [22][24]

Investment Rating - The investment rating for the company is "Accumulate" (maintained) with a target price of 27.07 CNY [1][6] Core Views - The company has shown rapid revenue growth in Q2, with a year-on-year increase of 25% and a significant profit increase of 367%, driven primarily by online sales channels [9] - The company is focusing on core brands and innovation in niche markets, with successful new product launches receiving positive market feedback [9] - The company’s operational quality is improving, as indicated by a decrease in inventory turnover days and accounts receivable turnover days, along with a 40% increase in net cash from operating activities [9] - Despite challenges in overseas business, there is an expectation of gradual improvement in the second half of the year due to easing trade tensions and optimization in product and marketing strategies [9] Financial Forecast and Investment Recommendations - The earnings per share (EPS) forecast for 2025-2027 has been raised to 0.50, 0.72, and 0.94 CNY respectively, up from previous estimates of 0.48, 0.69, and 0.89 CNY [6][10] - The company’s DCF target valuation remains at 27.07 CNY, supporting the "Accumulate" rating [6][10] - Revenue projections for 2025-2027 are 6,302 million, 6,886 million, and 7,484 million CNY, reflecting a recovery trajectory after a challenging 2024 [7][10]