Core Viewpoint - Proya Cosmetics has submitted an IPO application to the Hong Kong Stock Exchange, aiming to become the largest domestic cosmetics group in China with a dual listing [6][7]. Group 1: Company Overview - Proya was founded in 2003 by Hou Junchen and his brother-in-law Fang Youyou, and has emerged as a leading domestic brand in the face of competition from international giants [6][13]. - The company achieved a revenue of 107.8 billion yuan in 2024, becoming the first domestic cosmetics brand to surpass the 100 billion yuan mark [6][18]. - Proya's stock price has increased from 15.3 yuan per share at its IPO in 2017 to around 70 yuan recently [7]. Group 2: Financial Performance - Proya's revenue from 2022 to 2025 is reported as follows: 63.85 billion yuan (2022), 89.05 billion yuan (2023), 107.78 billion yuan (2024), and 53.62 billion yuan in the first half of 2025 [18]. - The company's profit for the same periods was 8.31 billion yuan (2022), 12.31 billion yuan (2023), 15.85 billion yuan (2024), and 8.26 billion yuan in the first half of 2025 [18]. - However, in Q3 2025, Proya's revenue fell to 17.36 billion yuan, a year-on-year decrease of 11.63%, marking the lowest growth in five years [19]. Group 3: Strategic Initiatives - Proya has launched a mid-term dividend plan, proposing to distribute 8 yuan per 10 shares, totaling approximately 315 million yuan, which is the highest mid-term dividend ratio since its listing [6][18]. - The company is focusing on a "Double Ten Strategy" to enter the top ten global cosmetics companies within the next decade, with plans for acquisitions and international expansion [23]. - Proya is actively pursuing a dual listing in Hong Kong to enhance its international financing capabilities and support overseas market expansion [23]. Group 4: Market Position and Trends - Proya's online sales have surged, with online revenue accounting for 95.06% of total sales by 2024, reflecting a significant shift towards e-commerce [14][20]. - The company has adopted a "big single product strategy" to upgrade its product line, with successful products like the Ruby Essence and Dual Anti-Aging Essence [14][15]. - The brand has also positioned itself as a scientific skincare leader, investing heavily in R&D, with expenditures of 1.28 billion yuan, 1.74 billion yuan, and 2.1 billion yuan over recent years [15]. Group 5: Leadership Transition - The next generation of leadership is emerging, with Hou Junchen's son, Hou Yameng, taking over as general manager in September 2024, marking a significant transition for the company [22]. - The management changes and performance fluctuations have led to a decline in Proya's stock price, which has dropped over 13% since the beginning of the year [23].

Core Viewpoint - The article discusses the growth and strategic developments of Proya Cosmetics, highlighting its recent IPO application and significant financial milestones, including its entry into the "100 billion club" in revenue, and the introduction of a substantial dividend plan [5][13]. Group 1: Company Overview - Proya Cosmetics was founded in 2003 by Hou Junchen and his brother-in-law Fang Youyou, and has emerged as a leading domestic beauty brand in China [5][8]. - The company achieved a revenue of 107.8 billion yuan in 2024, becoming the first domestic beauty brand to surpass the 100 billion yuan mark [13]. - Proya's stock price has increased from 15.3 yuan per share at its IPO in 2017 to around 70 yuan recently [6]. Group 2: Business Strategy and Growth - Proya adopted a "rural encircling cities" strategy to differentiate itself from international brands, focusing on third and fourth-tier cities [8]. - The company successfully transitioned to e-commerce, with online sales accounting for 95.06% of its revenue by 2024 [9][15]. - Proya introduced a "big single product strategy" in 2020, focusing on high-demand products like the Ruby Essence and Dual Anti-Aging Essence, which align with the rising trend of ingredient-focused skincare [9][10]. Group 3: Financial Performance - Proya's revenue from 2022 to 2025 shows a growth trajectory with figures of 63.85 billion yuan, 89.05 billion yuan, and 107.78 billion yuan, but a decline is noted in 2025 with a revenue of 17.36 billion yuan in Q3, down 11.63% year-on-year [13][14]. - The main brand's growth has stagnated, with a slight decline of 0.08% in the first half of 2025, contrasting with previous growth rates of 37.46%, 36.36%, and 19.55% [13]. Group 4: Future Outlook and Leadership Transition - The company is entering a new era with the succession of Hou Junchen's son, Hou Yameng, who has been appointed as the general manager, indicating a shift towards a new generation of leadership [17]. - Proya aims to become one of the top ten global cosmetics companies within the next decade, with plans for international expansion and potential acquisitions [18]. - The company is actively pursuing an IPO on the Hong Kong Stock Exchange to enhance its international financing capabilities [18].

Core Viewpoint - Proya, a leading Chinese cosmetics company, is preparing for an IPO on the Hong Kong Stock Exchange, aiming to become the first company in the beauty industry to be listed in both A-share and H-share markets, despite facing challenges such as declining performance and market value [1][2][3] Company Overview - Proya Cosmetics Co., Ltd. has submitted its listing application to the Hong Kong Stock Exchange, with CICC and UBS serving as joint sponsors [1] - The company was listed on the Shanghai Stock Exchange in November 2017, becoming the first domestic beauty stock [1] - Proya is currently the largest domestic cosmetics company in China, ranking fifth in the Chinese cosmetics market by retail sales as of 2024 [3][4] Financial Performance - Proya's revenue is projected to grow significantly, with estimates of approximately CNY 63.85 billion, CNY 89.05 billion, and CNY 107.78 billion from 2022 to 2024, respectively [4] - Net profit is also expected to increase from CNY 8.31 billion in 2022 to CNY 15.85 billion in 2024 [4] - However, in the first half of 2025, Proya's revenue growth slowed to 7.2%, with net profit growth at 13.8%, marking the lowest growth rates in five years [4][6] Strategic Initiatives - Proya's growth strategy includes a focus on "big single product" and "platformization," shifting from relying on popular product sets to developing high-priced, high-repeat purchase star products [3][4] - The company aims to enhance its research and development capabilities, brand building, sales channel expansion, and potential mergers and acquisitions through the funds raised from the IPO [2] Market Dynamics - The Chinese cosmetics market is the second largest globally, with a projected compound annual growth rate (CAGR) of 6.6% from 2024 to 2029, driven by the rise of domestic brands and changing consumer preferences [7][8] - Proya faces intense competition from both international giants and emerging domestic brands, necessitating a balance between marketing and research and development [8][9] Challenges and Considerations - Proya's main brand revenue showed a slight decline of 0.08% in the first half of 2025, which has impacted overall performance [6] - The company has a high sales and distribution expense ratio, with sales expenses reaching CNY 26.59 billion, nearly 27 times its R&D spending of CNY 9.5 million [8][9] - The cosmetics industry is characterized by low entry barriers and high competition, requiring continuous investment in marketing and innovation to maintain market share [9] Investment Outlook - Proya is positioned in a growing market with strong operational capabilities, benefiting from both industry growth and its own competitive advantages [10] - However, investors should be cautious of the main brand's stagnation, the underperformance of its product matrix, and high sales expense ratios that may pressure profitability [10]

Core Viewpoint - Proya, a leading Chinese cosmetics company, is preparing for an IPO in Hong Kong, aiming to become the first A+H listed beauty brand, despite facing challenges such as declining performance and market value [1][2] Company Overview - Proya Cosmetics Co., Ltd. has submitted its listing application to the Hong Kong Stock Exchange, with CICC and UBS as joint sponsors [1] - The company was listed on the Shanghai Stock Exchange in November 2017, becoming the first domestic beauty stock [1] - Proya is currently the largest domestic cosmetics company in China and ranks fifth in the overall cosmetics market by retail sales [2][3] Financial Performance - Proya's revenue is projected to grow significantly, with estimates of approximately CNY 63.85 billion, CNY 89.05 billion, and CNY 107.78 billion from 2022 to 2024, respectively [3] - Net profit is also expected to rise from CNY 8.31 billion in 2022 to CNY 15.85 billion in 2024 [3] - However, in the first half of 2025, revenue growth slowed to 7.2%, with net profit increasing by 13.8%, marking the lowest growth rate in five years [3][5] Strategic Initiatives - Proya has implemented a "big single product" strategy, focusing on high-repurchase, high-user-engagement products, and a platform strategy to build a multi-brand matrix [2][3] - The company has successfully captured market trends through effective marketing strategies, including social media and live-streaming e-commerce [2] Market Dynamics - The Chinese cosmetics market is expected to grow at a compound annual growth rate (CAGR) of 6.6% from 2024 to 2029, driven by the rise of domestic brands and changing consumer preferences [6][7] - Proya faces intense competition from both international giants and emerging domestic brands, necessitating a balance between marketing and research and development (R&D) [6][8] R&D and Marketing Expenditure - In the first half of 2025, Proya's sales and distribution expenses reached CNY 26.59 billion, accounting for 49.59% of total revenue, while R&D spending was only about CNY 95 million [7][8] - The company’s heavy reliance on marketing over R&D raises concerns about long-term sustainability and competitiveness in a rapidly evolving market [8] Investment Outlook - Proya is positioned well in the growing cosmetics market, benefiting from both industry trends and its operational capabilities [9] - However, challenges such as stagnant growth of the main brand and high sales expense ratios may impact profitability, warranting careful consideration from investors [9]

Core Viewpoint - Proya is initiating a Hong Kong listing to enhance its international strategy and overseas business development, aiming to increase its financing capabilities and support future global acquisitions [3][4]. Financial Performance - In the first three quarters of 2025, Proya achieved a revenue of 7.098 billion yuan, a year-on-year increase of 1.89%, and a net profit of 1.026 billion yuan, up 2.65% [3][4]. - The revenue for the first half of 2025 was 5.4 billion yuan, maintaining a leading position in the domestic beauty market [3][4]. - Proya's revenue growth from 2019 to 2024 was as follows: 32.28%, 20.13%, 23.47%, 37.82%, 39.45%, and 21.04% respectively, with net profit growth rates of 36.73%, 21.22%, 21.03%, 41.88%, 46.06%, and 30% [4]. Market Position and Competition - Proya is currently the leading domestic cosmetics brand, but faces increasing competition from brands like Maogeping, Shangmei, and others, making it challenging to maintain its market position [4][5]. - The phenomenon of Proya having the highest revenue but a declining stock price is attributed to concerns over its main brand's performance, leading to significant institutional investor withdrawals [3][4]. Research and Development Focus - Proya plans to use funds raised from the Hong Kong listing to enhance its R&D, brand building, and overseas market expansion [4][5]. - The company's R&D expenditure has been relatively low, hovering around 2%, with 2022 R&D expenses at 128 million yuan [4][5]. - Competitors like Huaxi Biological and Betaini have significantly higher R&D expenditure rates, indicating a potential area for Proya to improve [4][5].

Core Viewpoint - The article discusses the contrasting performance of Proya, a leading domestic beauty brand in China, highlighting its impressive sales during the Double Eleven shopping festival while facing significant stock price declines and slowing growth in recent financial results [1][3][5]. Group 1: Company Performance - Proya achieved over 1 billion yuan in sales within the first four hours of the Double Eleven pre-sale, becoming the top brand in the beauty category [1]. - Despite the sales success, Proya's stock price has dropped over 20% since May and more than 40% from its peak in 2023 [1]. - In the first half of 2025, Proya reported revenue of 5.362 billion yuan, a year-on-year increase of 7.21%, and a net profit of 799 million yuan, up 13.80% [5][6]. - The revenue growth rate of Proya in the first half of 2025 is the lowest since its listing in 2017, significantly down from 37.9% in the same period last year [6][9]. Group 2: Brand and Market Dynamics - Proya's main brand, which contributes nearly 80% of its revenue, saw a slight decline in revenue of 0.08% in the first half of 2025, marking its first negative growth in five years [10][11]. - The company has been expanding its multi-brand strategy through acquisitions, but the contributions from these new brands remain limited, with combined revenue from new brands being less than 1 billion yuan [14][16]. - The beauty market is becoming increasingly competitive, with mid-tier brands gaining market share while top brands like Proya are losing ground [24][25]. Group 3: Financial and Strategic Challenges - Proya's sales expenses reached 5.161 billion yuan in 2024, accounting for 47.88% of its revenue, while its R&D expenses were only 210 million yuan, indicating a heavy reliance on marketing over innovation [17]. - The company faces challenges in maintaining competitive product offerings, as it has not introduced new blockbuster products since its initial success [19]. - Proya's online sales accounted for over 95% of its revenue in 2024, highlighting its dependence on digital channels [33]. Group 4: Future Outlook - The article suggests that Proya is undervalued from an investment perspective, but it faces significant competition from both domestic and international brands [42]. - The company is undergoing leadership changes, which may introduce uncertainty into its operations [43]. - Proya must accelerate innovation and reform to realize its potential as a leading beauty brand in a rapidly evolving market [45].

Core Viewpoint - The article highlights the competitive landscape of the beauty industry during the Double 11 shopping festival, focusing on Proya's strong performance and strategic moves towards international expansion through a Hong Kong IPO. Group 1: Company Performance - Proya's products, including the Double Anti-Aging Essence and Ruby Cream, achieved over 100 million yuan in sales within the first 6 minutes of the Double 11 event [2] - Proya maintained its position as the top seller in the beauty category on Tmall, showcasing its strong brand presence [3] - The company's main brand revenue for the first half of the year was 3.979 billion yuan, a slight decline of 0.08%, marking the first drop in five years [8] Group 2: Product Strategy - Proya has developed a product line centered around the "Early C (Vitamin C) and Late A (Retinol)" concept, which has been heavily promoted through social media and influencer marketing [4] - The company has bundled its key products, such as the Double Anti-Aging and Ruby Essence, to cater to price-sensitive consumers, with promotional pricing under 300 yuan [5][6] - Despite stable product iterations, Proya has struggled to introduce new blockbuster products, with recent launches not achieving significant sales compared to previous hits [9] Group 3: Management and Strategic Changes - Proya's new CEO, Hou Yamen, faces challenges from increased competition and a lack of new hit products [8] - The company is shifting focus towards medical beauty and men's skincare, launching its first medical-grade product aimed at post-surgery recovery [10] - Proya has made significant management changes, appointing new executives with backgrounds in major international companies to enhance its strategic direction [14][16] Group 4: International Expansion - Proya has announced an investment in the makeup brand Huazhixiao, acquiring a 38.45% stake, and is establishing a European innovation center to accelerate overseas acquisitions [12] - The company aims to become the first beauty brand listed in both A-share and H-share markets, seeking to raise funds for R&D and brand development [17]

Core Viewpoint - The article highlights the contrasting performance of Proya, a leading domestic beauty brand, which achieved over 10 billion yuan in revenue for the first time while its stock price has significantly declined by over 20% since May and over 40% from its peak in 2023 [1][3][4]. Group 1: Company Performance - Proya's sales during the Double Eleven pre-sale event were strong, with the brand ranking first in the beauty category and achieving over 100 million yuan in sales shortly after the event began [1]. - In the first half of 2025, Proya reported revenue of 5.362 billion yuan, a year-on-year increase of 7.21%, and a net profit of 799 million yuan, up 13.80% [4][5]. - However, the revenue growth rate of Proya in the first half of 2025 is the lowest since its listing in 2017, significantly down from 37.9% in the same period last year [5][8]. Group 2: Brand and Market Dynamics - The main brand Proya, which contributes nearly 80% of the company's revenue, saw a slight decline in revenue of 0.08% to 3.979 billion yuan, marking its first negative growth in five years [9][10]. - Proya's multi-brand strategy, including acquisitions of domestic and international brands, has not significantly improved overall performance, with new brands contributing only 18.4% to total revenue [12][13]. Group 3: Competitive Landscape - The beauty market is becoming increasingly competitive, with other brands like Mao Geping and Marubi showing revenue growth rates above 30%, while Proya's growth has slowed [8][22]. - The overall beauty and skincare market saw a sales increase of 10.1% in the first half of 2025, indicating a shift in market dynamics towards mid-tier brands [22][24]. Group 4: Financial Metrics and Investment - Proya's sales expenses reached 5.161 billion yuan in 2024, accounting for 47.88% of its revenue, while R&D expenses were only 210 million yuan, highlighting a significant imbalance [16]. - The company is facing challenges in maintaining its market position due to high reliance on marketing and low R&D investment, which is critical in a market increasingly focused on product efficacy and ingredients [34][36]. Group 5: Future Outlook - Proya's management has proposed a "Double Ten Strategy" aiming to enter the top ten global cosmetics companies within the next decade, but the company faces significant valuation challenges compared to international giants [19][20]. - The article suggests that Proya must accelerate innovation and reform to realize its potential as a leading brand in the beauty industry [46].

Investment Rating - The investment rating for the retail industry is "Positive" (maintained) [1] Core Insights - The report highlights the commencement of the Double 11 e-commerce promotion, emphasizing a trend of simplifying promotional strategies, extending sales cycles, and seeking new growth avenues. This shift allows consumer demand to take precedence and encourages brands to focus on long-term value building [23][24] - The report identifies a significant increase in the performance of domestic brands during the Double 11 event, with a notable presence in the beauty and skincare categories, indicating that domestic brands are no longer just supplementary to international brands [25][29] Summary by Sections Retail Market Review - The retail industry index closed at 2277.78 points, down 0.45%, outperforming the Shanghai Composite Index, which fell by 1.47% [5][12] - The supermarket sector showed the highest increase this week, with a growth rate of 1.75% [15][18] - Year-to-date, the jewelry sector has led with a growth of 30.14% [15][18] Retail Perspectives - The Double 11 e-commerce promotion has officially started, with key trends including simplification of promotional strategies, extended sales cycles, and strategic exploration for new growth [23][24] - Domestic brands are increasingly strengthening their market presence, with significant sales performance noted in live-streaming events [25][29] Investment Recommendations - Investment focus areas include: 1. **Gold and Jewelry**: Recommend brands with differentiated product offerings and consumer insights, such as Laopuhuang and Chaohongji [30][32] 2. **Offline Retail**: Highlighting companies that adapt to trends, such as Yonghui Supermarket and Aiyingshi [30][32] 3. **Cosmetics**: Emphasizing strong domestic brands during the Double 11 event, including Porcelain and Maogeping [30][32] 4. **Medical Aesthetics**: Focusing on companies with differentiated product lines, such as Aimeike and Kedi-B [30][32]

Core Insights - Natural Hall, a domestic beauty brand, has officially submitted its IPO application, with Huatai International and UBS Group as joint sponsors [1] - The company is facing challenges such as slower growth compared to competitors and over-reliance on a single brand, leading to a "mid-life crisis" [2] Financial Performance - Natural Hall aimed for an 18% annual revenue growth but has not met this target in the past three years, with revenue growth rates of 7.2% from 2022 to 2024 [5] - Revenue figures for the years 2022, 2023, and 2024 were 4.29 billion, 4.44 billion, and 4.60 billion respectively, with a 6.4% year-on-year growth in the first half of 2025 [5] - The gross profit margin has shown a steady increase, reaching 70.1% in the first half of 2025, indicating strong pricing power and cost control [5] Profitability Issues - Net profit figures from 2022 to 2024 were 147 million, 302 million, and 190 million, with a significant 37.1% decline in net profit for 2024 [6] - The first half of 2025 saw a net profit of 191 million, reflecting a 7.3% year-on-year increase, indicating a phase of recovery [7] Brand Dependency - Natural Hall heavily relies on its main brand, which accounted for 94.9% of revenue in the first half of 2025, raising concerns about concentration risk [9] - The company has five brands, but the main brand's revenue dependency is significantly higher than competitors like Proya and Shiseido, which are also working on developing new brands [9] Market Position and Competition - Natural Hall is the third-largest domestic cosmetics group in China, with a strong brand presence established over nearly 25 years [2][3] - The company faces stiff competition from Proya, which has successfully launched high-selling products and achieved over 10 billion in revenue in 2024, while Natural Hall has struggled to create similar blockbuster products [11] Channel Strategy - Natural Hall has been focusing more on offline channels, with online revenue increasing from 59.7% in 2022 to 68.8% in the first half of 2025, while offline revenue has been declining [12] - The company plans to leverage its extensive offline network, which includes over 40,000 points of sale, to enhance brand experience and service [12][13]