Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Views - The retail industry index decreased by 4.32% in the week of September 22-26, 2025, underperforming the Shanghai Composite Index, which increased by 0.21% [6][13] - The report highlights the strong performance of certain companies, such as Jihong Co., which is expected to achieve a net profit of 209-222 million yuan for Q3 2025, representing a year-on-year increase of 55-65% [4][26] - The report emphasizes the importance of emotional consumption themes and recommends focusing on high-quality companies in high-growth sectors [7][31] Summary by Sections Retail Market Review - The retail industry index closed at 2281.69 points, ranking 29th among 31 primary industries [6][13] - The brand cosmetics sector experienced the smallest decline of 1.31% during the week, while the watch and jewelry sector led with a year-to-date increase of 26.87% [18][20] Company Performance Highlights - Jihong Co. is expected to achieve a net profit of 209-222 million yuan for Q3 2025, driven by its dual business model of cross-border e-commerce and packaging [4][26] - Old Puhuang reported a revenue of 12.354 billion yuan for H1 2025, a year-on-year increase of 250.9%, with a net profit of 2.268 billion yuan, up 285.8% [36][37] - Chao Hong Ji achieved a revenue of 4.102 billion yuan in H1 2025, with a net profit increase of 44.3% [39] Investment Recommendations - Focus on high-quality companies in the gold and jewelry sector, such as Old Puhuang and Chao Hong Ji, which are expected to benefit from emotional consumption trends [7][31] - Emphasize the importance of offline retail companies that adapt to consumer trends, recommending companies like Yonghui Supermarket and Aiying Room [31][32] - Highlight the potential of domestic beauty brands, recommending companies like Mao Ge Ping and Po Lai Ya, which are positioned well in the high-end market [32][33]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1][11] Core Insights - The company reported a revenue of 5.362 billion yuan for H1 2025, representing a year-on-year growth of 7.2%, and a net profit of 799 million yuan, which is an increase of 13.8% year-on-year [3][4] - The company is a leading domestic beauty brand, with strong growth from its second-tier brands and a robust pipeline of new products [4][5] - The company plans to accelerate its international expansion by considering a listing on the Hong Kong Stock Exchange [5] Financial Performance - For H1 2025, the company achieved a revenue of 5.362 billion yuan, with Q2 revenue at 3.003 billion yuan, showing a growth of 6.5% [3][4] - The gross profit margin for H1 2025 was 73.4%, an increase of 3.6 percentage points, attributed to cost reduction and efficiency improvements [4] - The company forecasts net profits of 1.863 billion yuan, 2.168 billion yuan, and 2.454 billion yuan for 2025, 2026, and 2027 respectively, with corresponding EPS of 4.70, 5.47, and 6.20 yuan [3][6] Brand and Product Development - The company launched several new products in Q2 2025, including a long-lasting cushion foundation and a dual-color powder, enhancing its product matrix [5] - The second-tier brands showed significant growth, with revenue increases of 21.1% for 彩棠, 102.5% for OR, and 80.2% for 悦芙媞 [4] Market Position and Strategy - The company is positioned as a leading player in the domestic beauty market, with a focus on multi-brand strategies and continuous product innovation [4][5] - The online sales channel grew by 9.2%, while offline sales faced challenges with a decline of 21.5% [4]

Core Viewpoint - Despite pressure in the beauty industry, Proya (603605.SH) demonstrates resilience with a revenue of 5.362 billion yuan in the first half of 2025, reflecting a year-on-year growth of 7.21% and a net profit of 799 million yuan, up 13.80% [1] Revenue Performance - Proya's main brand contributed 3.979 billion yuan in revenue, marking a slight decline of 0.08%, the first revenue drop in five years [4] - The main brand had previously shown consistent revenue growth from 2021 to 2024, with growth rates of 31.44%, 43.12%, 35.86%, and 37.67% respectively [4] Brand Portfolio - Proya's brand portfolio includes "Proya," "Caitang," "Off&Relax," "Yuefuti," "CORRECTORS," "INSBAHA," and "Jingshi," covering various beauty segments [3] Growth of Secondary Brands - Secondary brands such as Caitang and Off&Relax continue to show growth, with Caitang generating 705 million yuan in revenue, a year-on-year increase of 21.11% [6][7] - Off&Relax contributed 279 million yuan, with a remarkable growth rate of 102.52% [9] International Expansion Plans - Proya is planning to issue H-shares and list on the Hong Kong Stock Exchange to accelerate its international strategy [2][10] - The appointment of Xue Xia as the new company secretary is aimed at leveraging her extensive capital market experience to facilitate the Hong Kong listing [12][13] Market Positioning - If successful, Proya will become the first domestic beauty company with dual listings (A+H), enhancing its brand image and market reach [11] - The Hong Kong listing is expected to improve Proya's access to global investors and strengthen its presence in the Asia-Pacific market [11]

Core Viewpoint - Despite pressure on the beauty industry, Proya (603605.SH) demonstrates resilience with a revenue of 5.362 billion yuan in the first half of 2025, reflecting a year-on-year growth of 7.21% and a net profit of 799 million yuan, up 13.80% [2] Financial Performance - In the first half of 2025, Proya's revenue and net profit growth rates have slowed compared to the same period in 2024, which saw growth rates of 37.90% and 40.48% respectively [2] - The main brand, Proya, contributed 3.979 billion yuan in revenue, a slight decline of 0.08%, marking the first revenue drop in five years [6] - Revenue growth rates for Proya from 2021 to 2024 were consistently positive, at 31.44%, 43.12%, 35.86%, and 37.67% respectively [6] Brand Performance - Proya's main brand remains the key revenue driver, accounting for 74.27% of total revenue in the first half of 2025 [6] - Other brands such as Cai Tang, Off&Relax, and Yue Fu Ti have shown growth, with Cai Tang generating 705 million yuan, a year-on-year increase of 21.11% [6][7] - Off&Relax reported a revenue of 279 million yuan, with a remarkable growth rate of 102.52% [7] Product Strategy - Proya is focusing on four key product directions: compound demand, high-growth needs, integration of medical beauty trends, and breakthroughs in skincare-based makeup [6] - New product launches include a whitening series and a sunscreen line, targeting both daily skincare and post-medical treatment recovery [6] International Expansion - Proya is planning to issue H-shares and list on the Hong Kong Stock Exchange, aiming to become the first domestic beauty company with dual A+H listings [9] - The Hong Kong listing is seen as a significant step for Proya's global development, enhancing its brand image and market reach [9][10] - The appointment of Xue Xia as the new company secretary is expected to inject vital momentum into the Hong Kong listing process [10]

Core Viewpoint - The domestic beauty brand Proya is accelerating its globalization efforts, as evidenced by its strong financial performance and plans for an H-share listing in Hong Kong, which could make it the first A+H listed beauty company in China [1][6]. Financial Performance - Proya reported a revenue of 5.36 billion yuan for the first half of 2025, marking a year-on-year increase of 7.21% [2]. - The company's net profit attributable to shareholders reached 799 million yuan, up 13.80% year-on-year, with operating cash flow increasing by 95.34% to 1.29 billion yuan [2][4]. - The net profit margin improved to 15.41%, and the gross profit margin increased by 3.56 percentage points to 73.38% [1][2]. Dividend and H-share Listing - Proya announced its highest-ever interim dividend plan, proposing a cash dividend of 8.00 yuan per 10 shares, totaling an estimated 315 million yuan [4][5]. - The company is preparing for an H-share listing on the Hong Kong Stock Exchange, which is expected to enhance its capital strength and competitiveness [6][30]. Brand Performance - The main brand Proya generated 3.98 billion yuan in revenue, accounting for 74.27% of total revenue, while the color cosmetics brand Cai Tang achieved a revenue of 705 million yuan, growing by 21.11% [9][16]. - The brand Off&Relax saw a significant revenue increase of 102.52% to 279 million yuan, driven by new product launches and market expansion [21][22]. Research and Development - Proya maintained a steady investment in R&D, applying for 35 new patents in the first half of 2025, with a total of 240 patents held [29][30]. - The company is collaborating with various institutions to enhance its research capabilities and product innovation [30][31]. Digital Transformation - Proya's digital strategy is advancing, with projects aimed at integrating data across multiple brands and channels, enhancing customer service efficiency through AI, and supporting product innovation [31].

Core Viewpoint - Proya Cosmetics Co., Ltd. reported a revenue of approximately 5.36 billion RMB for the first half of 2025, reflecting a year-on-year growth of 7.21% and a net profit attributable to shareholders of approximately 798.51 million RMB, up 13.80% from the previous year [2][4][5]. Company Overview and Financial Indicators - The company focuses on the research, production, and sales of cosmetic products, with brands including Proya, Caitang, Off&Relax, and others [3][4]. - As of June 30, 2025, the total assets of the company reached approximately 8.28 billion RMB, an increase of 9.99% compared to the end of the previous year [2][4]. - The net assets attributable to shareholders were approximately 5.73 billion RMB, up 6.02% year-on-year [2][4]. Main Business and Revenue Analysis - The main business revenue was approximately 5.36 billion RMB, with a growth rate of 7.24% year-on-year [4][5]. - Direct sales contributed approximately 39.05 billion RMB, showing a significant increase of 20.35% [4]. - The brand Proya accounted for approximately 39.79 billion RMB in revenue, while Caitang generated approximately 7.05 billion RMB, reflecting a growth of 21.11% [4][5]. Marketing and Brand Strategy - The company has implemented a multi-channel marketing strategy, focusing on both online and offline sales [3][4]. - Proya's marketing campaigns have included collaborations with celebrities and targeted promotions during key shopping events, resulting in significant brand exposure [6][7]. - The brand has emphasized product innovation, particularly in high-efficiency skincare and makeup products, to meet evolving consumer demands [5][6]. Competitive Advantages - Proya's core competitiveness lies in its strong R&D capabilities and agile organizational structure, allowing it to respond quickly to market changes [5][6]. - The company has established partnerships with leading research institutions to enhance its product development [3][5]. - Proya aims to expand its market presence both domestically and internationally, leveraging the growing trend of Chinese brands going global [5][6].

Core Insights - The article emphasizes the importance of the Customer Lifetime Value (CLTV) system in driving sustainable growth for brands in a competitive market where traditional advertising methods are becoming less effective [5][12][20]. Group 1: Brand Performance - Pop Mart achieved global revenue exceeding 13 billion, with 46 million members and 11.72 million new members, where nearly half (49.4%) are repeat buyers [1]. - Lin Qingxuan reported a high repurchase rate of 34.6% with 4.3 million active users [2]. - Proya's revenue surpassed 10.7 billion, growing over 20% year-on-year, and net profit reached 1.55 billion, marking it as the first domestic beauty brand to enter the "billion club" [12][14]. Group 2: Market Dynamics - The market has shifted from an incremental to a stock market, leading to rational consumer decision-making and challenges for brands that previously dominated the Chinese market [11]. - International brands are withdrawing from the market, while domestic brands like Proya and Lin Qingxuan are experiencing growth due to their effective user relationship management [11][12]. Group 3: CLTV System Implementation - The CLTV system focuses on building long-term trust with users and continuously extracting user value, likened to nurturing a fruit orchard rather than just harvesting [8][20]. - The system comprises three core strategies: precise customer acquisition, refined retention, and transforming customers into lifelong assets [15][19][20]. Group 4: GAIN Model - The GAIN model, introduced by Tmall, serves as a practical framework for implementing the CLTV system, focusing on user value extraction rather than just user acquisition [22][28]. - It evaluates user value growth through four dimensions: demand drivers, demographic strategies, participatory interaction, and long-term growth [29][35][38]. Group 5: Case Studies - Helena's strategy includes creating product bundles and leveraging live streaming to enhance cross-category purchasing intentions [38]. - Huaxizi effectively targets Gen Z consumers by incorporating traditional elements into product design and focusing on platforms like Bilibili and Xiaohongshu for marketing [33]. - Natural Hall's membership operations emphasize consumer insights and engagement, transforming one-way transactions into two-way interactions [37]. Group 6: Tmall's Role - Tmall provides comprehensive support for the CLTV system through data analysis tools and a complete marketing ecosystem, facilitating the implementation of the GAIN model [45]. - The "Red Cat Plan" exemplifies innovative cross-platform operations that convert traffic into sustainable user engagement [46][49].

Core Viewpoint - Proya Cosmetics Co., Ltd. is undergoing significant leadership changes aimed at enhancing research innovation, internationalization, and digitalization strategies to achieve its goal of becoming a top ten global cosmetics company in the next decade [2][6][12]. Leadership Changes - Proya has appointed Wang Yifeng as the new head of product development and vice general manager of incubated brands, marking the third high-level personnel change this year [2][4]. - Since the appointment of Hou Yameng as general manager in September 2022, Proya has seen a net addition of four new executives while two long-standing members have departed [4][8]. - The new hires include key figures focused on research and digitalization, such as Sun Peiwen as Chief R&D Innovation Officer and Hu Ningbo as Chief Digital Officer [5][6]. Strategic Focus - The recent appointments are closely aligned with Proya's strategic vision, emphasizing research innovation, internationalization, and digitalization [2][6]. - Proya has upgraded its talent requirements from "execution and expertise" to "learning ability, collaboration, and self-drive," aiming to attract cross-industry talent with backgrounds in internet and fast-moving consumer goods [2][6]. Organizational Structure - Proya's organizational structure has been adjusted to focus on brand or business-led project teams, with R&D, branding, supply chain, and digitalization as four key platforms [9][10]. - The company has made seven organizational adjustments since its listing, with the most significant changes occurring during the second board term [10]. Financial Performance - Proya's revenue growth has accelerated, with reported revenues of 6.385 billion yuan in 2022 and 8.9 billion yuan in 2023, reflecting year-on-year growth rates of 37.8% and 39.5%, respectively [12]. - The company's net profit also saw substantial increases, reaching 820 million yuan in 2022 and 1.19 billion yuan in 2023, with growth rates of 41.9% and 46% [12]. - Marketing expenses have risen significantly, with annual sales expenses reported at 1.992 billion yuan, 2.786 billion yuan, and 3.972 billion yuan from 2021 to 2023, indicating a focus on marketing strategies [12].

Investment Rating - The report maintains a "Buy" rating for the company, indicating a potential upside of 15% to 35% from the current price [2][8]. Core Insights - The company has demonstrated strong performance during the 618 promotional event, leading in GMV rankings in the skincare category on major platforms [4]. - The company is focusing on product upgrades and enhancing its research and development capabilities, aiming to solidify its position as a leading domestic brand and expand globally [7]. - The financial forecasts suggest a steady increase in net profit and earnings per share (EPS) over the next few years, with projected net profits of RMB 18.72 billion, RMB 22.06 billion, and RMB 25.78 billion for 2025, 2026, and 2027 respectively [6][7]. Financial Summary - The company reported a net profit of RMB 817 million in 2022, with projections of RMB 1.872 billion for 2025, reflecting a year-on-year growth of 20.61% [6][9]. - Revenue is expected to grow from RMB 6.385 billion in 2022 to RMB 12.776 billion in 2025, indicating a robust growth trajectory [9]. - The company's price-to-earnings (P/E) ratio is projected to decrease from 28 in 2022 to 17 in 2025, suggesting an attractive valuation as earnings grow [6][9].

Core Insights - The article highlights the launch of the "High-Quality Consumption Observation" series by Southern Metropolis Daily, focusing on nine popular consumption sectors including beauty economy, sports and outdoor, food and health, smart consumer electronics, pet economy, experience economy, interest consumption, cross-border e-commerce, and consumption technology [1] - The report indicates a significant growth trend in the beauty and personal care market, particularly in the skincare segment, with a year-on-year retail sales increase of 4.4% in May and 4.1% from January to May [1] - The article emphasizes the shift towards efficacy-driven skincare products, with consumers increasingly demanding solutions for specific skin issues, leading to a notable rise in sales for products like sunscreen and hair care [1][12] Industry Trends - The beauty industry is witnessing a rise in "ingredient-focused" marketing, with brands emphasizing core ingredients to meet consumer demands for efficacy [11][25] - The competition in the high-end cosmetics market is intensifying, with international brands re-entering the Chinese market and dominating sales rankings during major promotional events like the 618 shopping festival [30][31] - Online sales channels have surpassed 50% of the market share in the cosmetics industry, with brands increasingly relying on e-commerce platforms for revenue growth [22][24] Brand Performance - Notable brands such as Proya and Han Shu have reported significant revenue growth, with Proya achieving over 10.7 billion yuan in 2024, while Han Shu's sales on Douyin reached 6.7 billion yuan [35][36] - The article mentions that brands like Huaxi Biological and Juzhibio have seen substantial revenue increases, with Juzhibio's revenue growing by 57.2% to 5.54 billion yuan in 2024 [7][33] - The performance of brands is increasingly tied to their ability to innovate and effectively market their products, particularly in the context of ingredient transparency and efficacy claims [11][25] Consumer Behavior - Consumers are becoming more rational in their purchasing decisions, focusing on product efficacy, ingredient transparency, and value for money, which is pushing brands to invest more in research and development [25][26] - The demand for specific skincare solutions, such as anti-aging and repair products, is driving growth in niche markets within the beauty sector [12][25] - The rise of content-driven e-commerce, including live streaming and social media sales, is reshaping how beauty brands engage with consumers and drive sales [24][30]