Summary of Shangmei Co., Ltd. Conference Call Company Overview - Shangmei Co., Ltd. reported a revenue of 6.7 billion RMB in 2024, representing a year-on-year growth of 62.1%, with net profit increasing by 74% [2][3] - The company was founded in 2002 and focuses on skincare, hair care, and maternal and infant products, with brands including Han Shu, New Page, Yi Ye Zi, Red Elephant, and Anminyou [3] Core Strategies and Insights - **Brand Premiumization Strategy**: Shangmei adopts a dual-track strategy for brand premiumization, enhancing product efficacy through self-developed core ingredients (e.g., Anminyou's artemisinin oil) and IP collaborations (e.g., with the "Anpanman" brand for maternal and infant care) [2][4] - **Channel Strategy Adjustment**: The company is shifting from a heavy focus on Douyin to a multi-channel approach, with Douyin's channel share slightly decreasing to 75% in Q1 2025, while Tmall and JD.com are gaining share [2][6] - **"2+2+2" Brand Strategy**: This strategy targets mass, mid-to-high-end, and high-end markets across skincare, maternal and infant care, and hair care categories [2][7] Product Performance - **Han Shu Brand**: Han Shu's red waist series 2.0 version has sold over 14 million sets, and new high-margin products like Chatai Super Frequency Cream are expected to enhance profitability [2][8] - **Growth Projections**: The Han Shu brand is expected to achieve approximately 20% growth in 2025, driven by anti-aging, men's skincare, and color cosmetics segments [2][9] Future Growth Drivers - **Emerging Brands**: New Page is rapidly growing in the maternal and infant care market, with plans to expand into teenage care and color cosmetics [2][9] - **New Product Launches**: The upcoming brands, such as Nambeauty and the Anpanman collaboration, are projected to achieve over 100 million RMB in sales in their first year [2][9] Profitability Enhancement Measures - **High-Margin Product Focus**: Increasing the proportion of high-margin new products, such as Han Shu's new offerings, is expected to boost overall gross and net profit margins [2][10] - **Channel Optimization**: A strategic reduction in the proportion of live streaming sales and an increase in self-broadcasting and high-margin channels like Tmall and JD.com will enhance profitability [2][10] - **Sales Expense Reduction**: The company anticipates a gradual decrease in sales expense ratio, projected to drop by about 1 percentage point annually from 2025 to 2027 [2][10] Financial Outlook - Shangmei is expected to achieve revenue growth rates of 24.1%, 20.8%, and 20.7% from 2025 to 2027, with adjusted net profits growing by 33.8%, 21.4%, and 18.8% respectively [2][10]