Investment Rating - The report indicates a positive outlook for the cosmetics raw materials industry, highlighting the stable growth of the downstream cosmetics sector and the leading positions of companies like Weiqi Technology and Jiakai Biological [1]. Core Insights - The cosmetics raw materials industry in China is projected to grow from CNY 1,147.80 billion in 2019 to CNY 1,603.90 billion by 2024, with a compound annual growth rate (CAGR) of 6.9% [2][12]. - The peptide active ingredients market is expected to grow from CNY 11.2 billion in 2019 to CNY 21.7 billion by 2024, achieving a CAGR of 14.1% [2][16]. - The plant extract raw materials market is anticipated to increase from CNY 204.5 billion in 2019 to CNY 270.2 billion by 2024, with a CAGR of 6.5% [2][20]. - Weiqi Technology holds a 6.6% market share in the peptide raw materials sector, ranking first in China [2][25]. - Jiakai Biological has established a leading position in the plant extract efficacy raw materials field, with significant revenue growth [2][33]. Summary by Sections 1. Growth of the Cosmetics Raw Materials Industry - The cosmetics raw materials market in China is expected to reach CNY 1,604 billion by 2024, driven by the stable growth of the cosmetics industry [2][5]. - The global cosmetics market is projected to reach USD 550.3 billion in 2024, with China being the largest market [5][8]. 2. Performance of Weiqi Technology and Jiakai Biological - Weiqi Technology's revenue for the first half of 2025 is CNY 132 million, a year-on-year increase of 34.6%, with a net profit of CNY 40.2 million, up 68.76% [2][30]. - Jiakai Biological's revenue for the first three quarters of 2025 is CNY 195 million, reflecting a year-on-year growth of 7.91%, with a net profit of CNY 47.3 million, up 16.91% [2][37]. 3. Market Trends and Valuation - The median price-to-earnings (P/E) ratio for the North Exchange consumer service sector increased to 50.1X, indicating a slight upward trend [2][50]. - The total market capitalization of consumer service companies on the North Exchange rose from CNY 1,096.29 billion to CNY 1,152.85 billion [2][43]. 4. Competitive Landscape - The cosmetics raw materials industry is characterized by a low concentration, with many small-scale companies primarily serving domestic mid-to-low-end markets [2][12]. - The demand for active ingredients, particularly peptides, is growing rapidly, driven by consumer preferences for effective skincare products [2][15].

Core Viewpoint - Shenzhen Weiqi Technology Co., Ltd. is pursuing an IPO on the Beijing Stock Exchange, driven by the rising popularity of peptide-based cosmetics, with a strong performance forecast for 2022-2024 [1][3]. Company Overview - Weiqi Technology is a supplier of cosmetic raw materials, primarily focusing on peptide cosmetics and finished products, with significant partnerships with brands like Procter & Gamble and Unilever [1][3]. - The actual controllers of the company, Ding Wenfeng and Lai Yanmin, hold approximately 62.07% of the shares [1][2]. Financial Performance - Revenue for Weiqi Technology is projected to grow from 135 million yuan in 2022 to 248 million yuan in 2024, with net profits increasing from 35.13 million yuan to 70.64 million yuan during the same period [3]. - The company has seen a decrease in revenue contribution from its top five clients, which accounted for 36.14% in 2022, dropping to 29.48% in 2023, and then rising to 38.76% in 2024 [3][4]. Market Trends - The rise of peptide ingredients in cosmetics has led to increased consumer awareness and brand adoption, with Weiqi Technology collaborating with major brands for new ingredient development [3][5]. - The cosmetic industry is characterized by rapid shifts in trends, as evidenced by the decline of hyaluronic acid's market dominance, raising questions about the sustainability of the current "peptide" trend [5][6]. Business Strategy - Weiqi Technology acknowledges the volatility in client orders due to changes in market conditions and client strategies, which could impact financial performance [5][6]. - The company is expanding its finished product business, which accounted for 47.05% of its main revenue in 2024, primarily through ODM (Original Design Manufacturer) operations [6]. Investment and Shareholder Dynamics - The IPO has attracted notable institutional investors, with specific agreements in place regarding performance and potential buyback obligations if the company fails to list successfully by the end of 2028 [2][3]. - A former sales director holds 4.61% of the shares, raising regulatory scrutiny regarding the rationale behind his continued ownership post-employment [2].

Core Viewpoint - Shenzhen Weiqi Technology Co., Ltd. is preparing for an IPO on the Beijing Stock Exchange, driven by the rising popularity of peptide-based cosmetics and its partnerships with major brands like Procter & Gamble and Unilever [1][3]. Company Overview - Weiqi Technology is a supplier of cosmetic raw materials, primarily focusing on peptide ingredients and finished cosmetic products [1][5]. - The company is controlled by Ding Wenfeng and Lai Yanmin, who together hold approximately 62.07% of the shares [1][2]. Financial Performance - The company's revenue for 2022, 2023, and 2024 was reported as 135 million, 165 million, and 248 million yuan respectively, with net profits of 35.13 million, 42.29 million, and 70.64 million yuan [3]. - The growth in performance is attributed to the increasing application of active peptide ingredients in cosmetics, leading to heightened consumer awareness and brand adoption [3][5]. Client Dependency - The revenue contribution from the top five clients was 36.14%, 29.48%, and 38.76% for the respective years, indicating a decrease in reliance on these clients [3][4]. - Notably, all but one of the second to fifth largest clients in 2022 have exited the top five list by 2023 and 2024 [3]. Market Dynamics - The cosmetic industry is characterized by rapid shifts in trends, as evidenced by the decline of hyaluronic acid products and the potential volatility surrounding peptide ingredients [5][6]. - Weiqi Technology acknowledges that the sustainability of peptide ingredients depends on market promotion by influential brands and consumer acceptance [6]. Business Strategy - The company is increasing its share of finished cosmetic products, which accounted for 47.05% of its main revenue by 2024, with a significant portion coming from ODM (Original Design Manufacturer) business [6]. - The ODM business is strategically aimed at promoting and selling raw materials, while the company remains cautious about its own brand (OBM) operations to avoid negative impacts on raw material sales [6].

Core Viewpoint - Shenzhen Weiqi Technology Co., Ltd. is preparing for an IPO on the Beijing Stock Exchange, driven by the rising popularity of peptide-based cosmetics and a strong performance in recent years [1][7]. Company Overview - Weiqi Technology is a supplier of cosmetic raw materials, primarily focusing on peptide cosmetics. The company is controlled by Ding Wenfeng and Lai Yanmin, who together hold 62.0687% of the shares [1][2]. - Ding Wenfeng, the actual controller, has a PhD and extensive experience in research and development within the pharmaceutical and cosmetic industries [1][2]. Financial Performance - The company's revenue for the years 2022 to 2024 is projected to grow from 135 million yuan to 248 million yuan, with net profits increasing from approximately 35.13 million yuan to 70.64 million yuan [7]. - The growth is attributed to the increasing application of active peptide ingredients in well-known cosmetic brands, enhancing consumer awareness and demand [7]. Client Dependency - The revenue contribution from the top five clients has shown a decline, with percentages of 36.14%, 29.48%, and 38.76% for the respective years [7][8]. - Notably, the second to fifth largest clients in 2022 have exited the top five list by 2023, raising concerns about client retention and dependency [7]. Market Trends and Risks - The cosmetic industry is subject to rapid changes in consumer preferences, as evidenced by the decline of hyaluronic acid products. This raises questions about the sustainability of the current demand for peptide ingredients [8][9]. - Weiqi Technology acknowledges the potential volatility in its business due to reliance on a single category of products, emphasizing the need for continuous market promotion and brand support [9][10]. Business Strategy - The company is increasing its share of finished cosmetic products, with ODM (Original Design Manufacturer) products contributing 47.05% of its main revenue by 2024 [9][10]. - The ODM business is strategically positioned to promote the sale of raw materials, indicating a dual focus on both raw material supply and finished product development [10].