Core Viewpoint - Koshi Co., Ltd. (科思股份) is facing significant challenges in its business performance, particularly in its sunscreen product segment, leading to a substantial decline in projected profits for 2025 [1][2] Financial Performance - For 2025, the company forecasts a net profit attributable to shareholders between 90 million to 120 million yuan, representing a year-on-year decline of 78.67% to 84% [1] - In the first three quarters of 2025, the company reported operating revenue of 1.116 billion yuan, down 39.93% year-on-year, with a net profit of approximately 77.93 million yuan, a decrease of 84.84% [2] - The gross margin fell from 48.8% in 2023 to 29.7% in the first three quarters of 2025, while the net margin dropped from 30.6% to 6.6% in the same period [2] Business Segment Insights - The core product line of the company includes "active ingredients and raw materials for cosmetics," with sunscreen agents being the primary focus, accounting for over 80% of total revenue [2] - Revenue from this segment decreased from 2.07 billion yuan in 2023 to 1.904 billion yuan in 2024, and more than 54% in the first half of 2025 [2] Market Dynamics - The global sunscreen market is experiencing a slowdown, with the market size reaching 15.287 billion USD in 2023 and an average annual growth rate of approximately 7.6% from 2021 to 2023, which is expected to decline to 4.3% from 2023 to 2028 [5] - Increased competition in the sunscreen market has led to a general decline in product prices, impacting profit margins [5] Competitive Landscape - The company is a major manufacturer of sunscreen agents, holding over 20% market share in 2023, with key clients including global giants like L'Oréal, Procter & Gamble, and Bayer [3] - The company’s overseas business accounted for 89.94% of its revenue in 2023, although this proportion decreased to 86.97% in 2024, with a significant drop in overseas revenue in the first half of 2025 [3][4] Strategic Initiatives - The company is accelerating the construction of a 10,000-ton annual production project for sunscreen products in Malaysia to enhance its supply response capabilities in the European and Southeast Asian markets [3]

Group 1 - The core point of the news is that Kosi Co., Ltd. experienced a decline of 5.01% in its stock price, reaching 14.78 yuan per share, with a trading volume of 148 million yuan and a turnover rate of 2.15%, resulting in a total market capitalization of 7.031 billion yuan [1] - Kosi Co., Ltd. is located in Jiangning Economic and Technological Development Zone, Nanjing, Jiangsu Province, and was established on April 20, 2000. The company went public on July 22, 2020, and its main business involves the research, production, and sales of daily chemical raw materials [1] - The revenue composition of Kosi Co., Ltd. includes 75.43% from cosmetic active ingredients and their raw materials, 22.94% from synthetic fragrances, and 1.63% from other sources [1] Group 2 - Among the top ten circulating shareholders of Kosi Co., Ltd., a fund under Southern Fund ranks first. The Southern CSI 1000 ETF (512100) reduced its holdings by 6,800 shares in the third quarter, holding a total of 1.7538 million shares, which accounts for 0.38% of the circulating shares. The estimated floating loss today is approximately 1.368 million yuan [2] - The Southern CSI 1000 ETF (512100) was established on September 29, 2016, with a latest scale of 76.63 billion yuan. Year-to-date returns are 23.18%, ranking 1941 out of 4206 in its category; the one-year return is 21.37%, ranking 2199 out of 3986; and the return since inception is 9.01% [2]

Core Viewpoint - The company's performance has been under pressure due to slowing demand and increased competition, leading to a decline in revenue and net profit for 2024 and Q1 2025 [1][2][3] Financial Performance - In 2024, the company achieved revenue of 2.276 billion (yoy -5.16%) and a net profit of 562 million (yoy -23.33%) [1] - For Q1 2025, revenue was 397 million (yoy -44.29%) and net profit was 48 million (yoy -78.15%) [1] - The gross margin and net profit margin for 2024 decreased by 4.4 percentage points and 5.9 percentage points to 44.4% and 24.7%, respectively [1] - In Q1 2025, gross margin and net profit margin further declined by 13.8 percentage points and 18.8 percentage points to 34.0% and 12.1%, respectively [1] - Operating cash flow for 2024 was 823 million (yoy +3.08%), while Q1 2025 saw a negative operating cash flow of 12 million (yoy -107.36%) [1] Segment Performance - The cosmetics active ingredients and their raw materials segment generated revenue of 1.904 billion (yoy -8.05%), while synthetic fragrances achieved revenue of 352 million (yoy +14.16%) [2] - The gross margins for cosmetics active ingredients and synthetic fragrances were 49.22% and 20.80%, reflecting declines of 3.84 percentage points and 2.80 percentage points, respectively [2] - The company primarily relies on overseas sales, which accounted for 1.98 billion (yoy -8.30%) in 2024, while domestic sales reached 297 million (yoy +22.87%) [2] Strategic Response - In response to market challenges, the company is focusing on consolidating its leading position in the sunscreen sector, accelerating new product market breakthroughs, and increasing investment in formulation and application research [2] - The company is also enhancing its management systems and processes to improve operational efficiency and cost control, while advancing the construction of its overseas production base in Malaysia [2] Earnings Forecast and Investment Recommendation - The company is projected to have revenues of 2.06 billion, 2.26 billion, and 2.45 billion for 2025, 2026, and 2027, respectively, with net profits of 410 million, 490 million, and 560 million [3] - The current market capitalization corresponds to a PE ratio of 15X for 2026, maintaining a "buy" rating [3]

Investment Rating - The report maintains a "Buy" rating for the company [5] Core Views - The company's performance is under pressure due to slowing demand and increased competition, with projected revenue for 2024 at 2.276 billion (down 5.16% YoY) and net profit at 562 million (down 23.33% YoY) [1] - The company is focusing on consolidating its leading position in the sunscreen market and accelerating the launch of new products while enhancing operational efficiency and cost control [2][3] Financial Performance Summary - Revenue and profit forecasts for 2025-2027 are adjusted to 2.06 billion, 2.26 billion, and 2.45 billion respectively, with net profits of 413 million, 493 million, and 562 million [3] - The company's gross margin is expected to decline to 41.3% in 2025, with a net margin of 20.0% [4] - Operating cash flow for 2024 is projected at 823 million, with a significant drop to -12 million in Q1 2025 due to revenue decline [1][4] Segment Performance Summary - The cosmetics active ingredients and raw materials segment is expected to generate 1.904 billion in revenue for 2024 (down 8.05% YoY), while synthetic fragrances are projected to grow by 14.16% YoY to 352 million [2] - The company’s overseas sales are projected to be 1.98 billion (down 8.30% YoY), while domestic sales are expected to increase by 22.87% to 297 million [2]