Core Viewpoint - Marubi Biological, known as the "first stock of eye cream" in A-shares, is preparing for a dual listing on the Hong Kong Stock Exchange while undergoing a power transition within the controlling family [2][3]. Group 1: Company Background and Control - Marubi Biological was founded by Sun Huaqing in 2002, focusing on eye care products and has maintained its position as the leading domestic eye care brand from 2021 to 2024 [1][19]. - The controlling shareholders, Sun Huaqing and Wang Xiaopu, hold a combined 80.8% of the company [3][10]. - The company underwent a significant dividend distribution before its IPO, benefiting the controlling family [4][30]. Group 2: IPO and Financial Adjustments - Marubi Biological submitted its IPO application to the Hong Kong Stock Exchange, aiming for an "A+H" dual listing [2]. - The company has faced challenges with its fundraising projects since its A-share listing, with all initial investment projects experiencing delays [5][7]. - Specific projects, such as the cosmetic smart manufacturing factory, have seen multiple delays and budget increases, indicating potential issues in project management [8][9]. Group 3: Financial Performance - Marubi Biological's revenue from 2022 to 2024 showed a compound annual growth rate (CAGR) of 31%, with net profits growing at a CAGR of 43% during the same period [22]. - The company reported a revenue of 24.5 billion yuan in the first nine months of 2025, a 25.5% year-on-year increase, but net profit growth slowed to only 2.86% [23]. - The gross profit margin has been steadily increasing, reaching 74.8% in 2025 [24]. Group 4: Marketing and Sales Strategy - The company has heavily invested in marketing, with total marketing expenses amounting to 4.464 billion yuan from 2022 to 2024, leading to a rising sales expense ratio [25]. - Online sales channels accounted for 87.6% of revenue in the first nine months of 2025, while offline channels have been declining [27]. Group 5: Regulatory Issues and Governance - Marubi Biological received a warning letter from the Guangdong Regulatory Bureau for financial accounting irregularities and improper management of raised funds [15][16]. - The company has committed to rectifying these issues and improving governance practices following the regulatory scrutiny [18].

Investment Rating - The investment rating for the company is "Accumulate" [6] Core Views - The company reported a revenue of 1.769 billion yuan for H1 2025, representing a year-on-year increase of 30.83%, while the net profit attributable to the parent company was 186 million yuan, up 5.21% year-on-year [1] - The company is expected to enhance efficiency in the second half of the year following a phase of adjustment in Q2 2025 [1] - The company maintains a strong focus on brand building and innovation, with significant growth in its eye care product line and online sales channels [4] Financial Performance Summary - For H1 2025, the gross margin was 74.60%, a slight decrease of 0.07 percentage points year-on-year, while the net profit margin was 10.50%, down 2.56 percentage points year-on-year [2] - In Q2 2025, the gross margin decreased to 73.28%, down 1.47 percentage points year-on-year, and the net profit margin fell to 5.50%, down 4.04 percentage points year-on-year [2] - The company’s revenue from eye care products reached 420 million yuan in H1 2025, a remarkable increase of 76.18% year-on-year, contributing to 23.75% of total revenue [3] Product and Market Strategy Summary - The company has implemented a big product strategy, successfully launching new products such as the upgraded dual collagen cleansing milk and the super mask, maintaining its position as the leading domestic brand in eye care [4] - The online sales channel accounted for 88.87% of total revenue, with a year-on-year growth of 37.85%, while offline sales decreased by 7.07% [3] - The company’s overall R&D investment for H1 2025 was 40.7 million yuan, with five self-developed core raw materials successfully commercialized [4] Future Outlook - The company expects revenue for 2025-2027 to be 3.856 billion, 4.800 billion, and 5.915 billion yuan respectively, with net profits projected at 430 million, 540 million, and 670 million yuan [4] - The company is positioned to continue its growth trajectory with a focus on both "lifestyle beauty" and "medical beauty" sectors [4]

Company Overview - Shenzhen Weiqi Technology Co., Ltd. (Weiqi Technology) has been accepted for IPO on the Beijing Stock Exchange, with Guosen Securities as the sponsor [2] - Established in 2011, the company has a registered capital of 50 million yuan, focusing on the R&D, production, sales, and related services of cosmetic raw materials and finished products [2] Fundraising and Projects - The company aims to raise 366 million yuan through the IPO, which will be allocated to the construction of the Weiqi Health Industry Park project and the Weiqi Technology R&D Center project [2] Product and Innovation - As of the signing date of the prospectus, Weiqi Technology has 16 cosmetic raw materials approved by the National Medical Products Administration, including 7 innovative raw materials, ranking first in both total and innovative raw material approvals [3] - The company has entered the supply chain of well-known domestic and international brands such as Marubi and Procter & Gamble [3] Ownership Structure - Ding Wenfeng and Lai Yanmin are the actual controllers of Weiqi Technology, collectively holding 62.1% of the shares [4] - Ding Wenfeng directly holds 57.28% of the shares and indirectly controls an additional 1.27% through the employee stock ownership platform, Weijukang, totaling 58.55% [4] Management Background - Ding Wenfeng, aged 48, holds a doctoral degree and has extensive experience in drug research and development, having worked in various pharmaceutical companies before leading Weiqi Technology [4][7] Financial Performance - The company's revenue is projected to grow from 135 million yuan in 2022 to 248 million yuan in 2024, with net profits increasing from approximately 35.13 million yuan to 70.64 million yuan during the same period, indicating rapid growth [9]

Core Viewpoint - Marubi has established itself as a leading brand in the eye care segment, achieving significant sales milestones and cultural relevance through its annual "Eye Cream Festival" and collaborations with artists, thereby redefining the standards for domestic eye care products [6][19][28]. Group 1: Brand Recognition and Achievements - Marubi was awarded the title of "First Brand in Domestic Eye Care" by the China Fragrance and Cosmetic Industry Association, highlighting its market leadership and brand strength [16][18]. - The brand has maintained the highest sales in the eye care category for three consecutive years, with its flagship product, the small red pen eye cream, achieving sales of 5 billion [18][19]. - In 2024, Marubi's GMV exceeded 900 million, with an impressive growth rate of 83.9%, further solidifying its position as the leading domestic eye care brand [18]. Group 2: Marketing and Cultural Integration - The 12th "Eye Cream Festival" featured a collaboration with contemporary artist Song Santu, emphasizing the integration of art and culture into the brand's marketing strategy [7][10]. - Marubi's marketing approach has evolved from emotional marketing to emotional engagement, creating a deeper connection with consumers through artistic collaborations [12][14]. - The festival has transformed from a promotional event into a cultural ceremony, enhancing brand identity and consumer engagement [27][28]. Group 3: Product Development and Innovation - Marubi has focused on continuous product innovation, launching multiple iterations of its small red pen eye cream, with the latest version featuring a 25% custom high-concentration peptide formula [22][24]. - The brand has developed a comprehensive product matrix, including key products like the small purple eye cream and butterfly eye mask, to enhance its online presence and sales performance [24]. - Marubi's research and development capabilities have evolved into a fourth-generation system, integrating advanced technologies to ensure product efficacy and safety [27]. Group 4: Strategic Positioning and Market Insights - Marubi's strategy emphasizes systematic capabilities, combining product development, marketing, and consumer trust to create a robust competitive advantage in the eye care market [26][28]. - The brand's long-term commitment to quality and innovation has allowed it to build a strong reputation and consumer loyalty in a highly competitive landscape [19][28]. - Marubi's success illustrates that a brand can thrive in the beauty industry without relying on anxiety-driven narratives, focusing instead on product quality and cultural depth [28][29].

Investment Rating - The report maintains a recommendation for the beauty and personal care industry, highlighting the continued growth of leading domestic brands [2]. Core Insights - The beauty and personal care sector has shown a divergence in performance, with leading domestic brands achieving good growth due to their competitive pricing, differentiated products, and effective online operations [1][10]. - The upcoming 618 shopping festival is expected to further catalyze growth for domestic brands, particularly in the cosmetics sector [1][6]. Summary by Sections Cosmetics - In 2024 and Q1 2025, leading domestic brands continued to show strong growth, with significant revenue increases reported: - Molybdenum Biological: +33% revenue, +32% net profit - Giant Biological: +57% revenue, +42% net profit - Upper Beauty: +62% revenue, +69% net profit [11][13]. - The overall performance of the cosmetics sector is characterized by a mix of growth and decline among various companies, with some like Proya showing resilience in profit despite revenue slowdowns [12][13]. - The report suggests focusing on brands with strong single-product strategies and innovative ingredients, such as Giant Biological and Molybdenum Biological, as well as those with strong brand positioning like Mao Geping [1][6]. Personal Care - The personal care segment has seen robust performance from leading domestic brands, with notable revenue growth in Q1 2025: - Baiya: +30% - Stable Medical: +36% - Hao Yue Care: +42% [6][12]. - The report emphasizes the importance of product upgrades and channel expansion for these brands, which have outperformed OEM companies [1][6]. - The ongoing trend of online expansion and the shift towards mid-to-high-end branding remains strong, with companies like Baiya and Stable Medical showing promising developments [6][12]. Market Trends - The overall market for cosmetics in early 2025 showed a slight increase in retail sales, with a year-on-year growth of 4.0% in the first four months [23]. - Online platforms like Tmall and Douyin have seen varying performance, with Douyin showing higher growth rates in certain categories compared to Tmall [26][29]. Key Brand Performance - Key brands have demonstrated significant growth in both Tmall and Douyin platforms, with notable increases in GMV for brands like Mao Geping and Kefu Mei [33]. - The report highlights the competitive landscape, with domestic brands increasingly capturing market share from international brands due to their pricing and innovative marketing strategies [1][6].

Investment Rating - The report maintains a "Strong Buy" rating for the company [1][8]. Core Views - The company shows strong performance with a projected revenue growth of 33% and a net profit growth of 32% for 2024, continuing into Q1 2025 with revenue growth of 28% and net profit growth of 22% [1][2]. - The dual-brand strategy, featuring the main brand Marubi and the PL brand Lianhuo, is driving growth, with significant contributions from key products like the Marubi Eye Cream and the Golden Needle series [1][3]. - The company is expected to achieve net profits of 445 million, 549 million, and 643 million yuan for 2025, 2026, and 2027 respectively, reflecting year-on-year growth rates of 30%, 23%, and 17% [1][8]. Financial Performance - In 2024, the company achieved a total revenue of 2.97 billion yuan, a year-on-year increase of 33.44%, and a net profit of 342 million yuan, up 31.69% [2][9]. - The main brand Marubi generated revenue of 2.06 billion yuan in 2024, growing by 31.69%, while the PL brand Lianhuo achieved 905 million yuan, a growth of 40.72% [3][9]. - The company's gross margin improved to 73.70% in 2024, up by 3.01 percentage points, attributed to product structure optimization and cost control [7][12]. Product and Channel Analysis - The company’s product categories showed strong performance, with eye care products generating 689 million yuan in revenue, a 60.78% increase, and skincare products reaching 1.13 billion yuan, up 21.60% [3][9]. - Online sales channels contributed significantly, with revenue of 2.54 billion yuan in 2024, reflecting a growth of 35.77%, while offline channels saw a 20.79% increase to 427 million yuan [3][9]. Future Outlook - The company is expected to continue its growth trajectory with a stable cash flow and a focus on product innovation, which is anticipated to contribute to incremental growth [8][9]. - The projected earnings per share (EPS) for 2025 is 1.11 yuan, with a price-to-earnings (PE) ratio of 39.3 [9][12].