Investment Rating - The report maintains a "Buy" rating for the company [6] Core Views - The company achieved steady revenue growth in H1 2025, with revenue of 5.36 billion yuan (up 7.2% year-on-year) and a net profit of 800 million yuan (up 13.8% year-on-year) [1] - The main brand, Proya, is focusing on product matrix upgrades to meet diverse consumer needs, while sub-brands are contributing to incremental growth in niche markets [2] - The company is expected to continue its brand upgrade strategy and aims to establish itself as a new-generation platform cosmetics group, with projected revenues of 11.74 billion yuan, 12.80 billion yuan, and 14.00 billion yuan for 2025, 2026, and 2027 respectively [3] Financial Performance - In H1 2025, the gross profit margin was 73.4% (up 3.6 percentage points), driven by cost reduction and efficiency improvements [1] - The company’s operating cash flow reached 1.29 billion yuan (up 95.34% year-on-year) [1] - The projected net profit for 2025 is 1.75 billion yuan, reflecting a year-on-year growth of 12.8% [3] Brand and Product Strategy - The main brand Proya generated revenue of 3.979 billion yuan (down 0.08% year-on-year), focusing on high-growth and medical beauty integrated products [2] - The sub-brand Caitang saw a revenue increase of 21.11% year-on-year, emphasizing traditional Chinese aesthetics and expanding its product line [2] - The OR sub-brand experienced significant growth, with revenue up 102.52% year-on-year, focusing on hair care products [2] Channel Performance - Online sales accounted for 51.09 billion yuan (up 9.17% year-on-year), with direct sales contributing 39.05 billion yuan [3] - Offline sales decreased to 2.47 billion yuan (down 21.49% year-on-year), with a focus on high-end product lines and strategic partnerships with premium department stores [3]

Core Viewpoint - The company, Proya, has demonstrated strong revenue growth and cash flow in its mid-year report, launching its highest-ever interim dividend plan and initiating a Hong Kong stock listing plan, indicating a robust performance amid a slowing industry growth rate [2][8]. Financial Performance - In the first half of 2025, Proya achieved a revenue of 5.362 billion yuan, a year-on-year increase of 7.21%, and a net profit attributable to shareholders of 799 million yuan, up 13.80% [2][9]. - The operating cash flow net amount significantly increased by 95.34% to 1.293 billion yuan, showcasing strong profitability and operational efficiency [2]. Dividend and Listing Plans - Proya announced a mid-term dividend plan, proposing a cash dividend of 8.00 yuan per 10 shares, totaling approximately 315 million yuan, marking a new high for the company's semi-annual dividends [2][8]. - The company is also planning to issue H-shares and list on the Hong Kong Stock Exchange, aiming to accelerate its internationalization strategy and enhance overseas business capabilities [8][10]. Brand Performance - Proya's main brand generated 3.979 billion yuan in revenue, accounting for 74.27% of total revenue, targeting young white-collar workers with a focus on "scientific skincare" [3][5]. - The emerging brand, Caitang, achieved a revenue of 705 million yuan, growing by 21.11%, and is becoming a significant performance driver [4]. Market Position and Strategy - The Chinese cosmetics market is experiencing a slowdown, with retail sales growth of 2.9% in the first half of the year, below the overall retail sales growth of 5% [3]. - Proya's net profit margin improved to 15.41%, and gross margin increased by 3.56 percentage points to 73.38%, indicating effective cost control and product structure optimization [3]. R&D and Digital Transformation - Proya's R&D expenses reached 210 million yuan in 2024, a year-on-year increase of 21.21%, with the establishment of R&D centers in Shanghai and Europe [6][7]. - The company is advancing its digital transformation, launching SAP system upgrades and AI-driven customer service systems to enhance operational efficiency [7]. Competitive Landscape - Proya's multi-brand strategy effectively covers diverse consumer groups, with the main brand maintaining its core market while new brands accelerate growth, contributing to overall performance [5][10]. - The company is positioned to become the first domestic beauty enterprise listed on both A-shares and H-shares, enhancing its capital strength and competitive edge in the global market [9][10].

Core Insights - The company reported a 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% [2] - The operating cash flow surged by 95.34% to 1.293 billion yuan, indicating strong financial health [2] - The company announced a record interim dividend of 8 yuan per 10 shares, totaling 315 million yuan, reflecting a commitment to shareholder returns [4] Revenue and Profitability - The hair care segment saw a remarkable revenue increase of 131.25%, while the beauty and makeup category grew by 25.79%, driving overall revenue growth [3] - The main brand, Proya, generated 3.979 billion yuan, accounting for 74.27% of total revenue, maintaining its leading position in major e-commerce channels [3] - The net profit margin improved to 15.41%, and the gross margin increased by 3.56 percentage points to 73.38%, showcasing effective cost control and product optimization [3] Dividend and Capital Strategy - The proposed interim dividend represents nearly 40% of the net profit, marking the highest dividend payout ratio since the company's listing [4] - The company is preparing for an H-share listing in Hong Kong to enhance international financing, governance, and brand recognition, aiming to support global expansion [4] Multi-Brand Strategy - The company’s multi-brand strategy is yielding results, with the brand Caitang achieving 705 million yuan in revenue, a 21.11% increase [5] - The hair care brand Off&Relax reported a revenue of 279 million yuan, up 102.52%, indicating strong market performance [6] - Other brands like Yuefuti and Yuanse Bota also showed significant growth, contributing to a diversified growth path for the company [6] R&D and Digital Transformation - The company applied for 35 new patents in the first half of 2025, emphasizing its commitment to R&D [7] - Collaborations with Ant Group for smart customer service and upgrades to digital management systems are underway, enhancing data-driven decision-making [7] Future Outlook - The company plans to accelerate production capacity and the H-share listing process while focusing on high-end domestic markets and overseas expansion [8] - The H-share listing is expected to open international financing opportunities, positioning the company for greater competitiveness in the global beauty market [8]

Core Insights - Proya Cosmetics Co., Ltd. reported a revenue of 5.362 billion yuan for the first half of 2025, marking a year-on-year growth of 7.21% [1] - The company achieved a net profit of 799 million yuan, an increase of 13.80% year-on-year, with operating cash flow reaching 1.293 billion yuan, up 95.34% [1] - The company announced its highest-ever interim dividend plan and is preparing for an H-share listing in Hong Kong, indicating confidence in future growth [2] Financial Performance - Revenue reached 5.362 billion yuan, with a significant increase in the personal care segment at 131.25% and beauty makeup at 25.79% [1] - Net profit was reported at 799 million yuan, with a net profit margin of 15.41% and a gross margin of 73.38%, reflecting improved profitability [1] - The interim dividend plan proposes a cash dividend of 8.00 yuan per 10 shares, totaling approximately 315 million yuan, which would bring cumulative dividends since 2017 to over 2.1 billion yuan [2] Brand and Market Position - The main brand generated 3.979 billion yuan in revenue, accounting for 74.27% of total revenue, while the sub-brand 彩棠 achieved 705 million yuan, growing 21.11% [3][7] - Proya's flagship store on Tmall ranked first in the beauty category, while it ranked second on Douyin and fifth on JD.com, indicating strong market presence [3] - The Off&Relax brand saw a revenue increase of 102.52% to 279 million yuan, driven by new product launches and effective marketing strategies [10] Innovation and R&D - The company applied for 35 new patents in the first half of 2025, bringing the total to 240 patents, showcasing its commitment to innovation [15] - Proya's R&D efforts include collaborations with top universities and research institutions, enhancing its technological capabilities [15][16] - The company is implementing a digital strategy to improve operational efficiency and support product innovation through AI and data management systems [16] Strategic Developments - The preparation for the H-share listing in Hong Kong is a significant step towards international expansion and enhancing capital strength [2] - The company aims to position itself among the top ten global cosmetics companies within the next decade, reflecting its long-term strategic vision [16]

Core Viewpoint - The company, Proya (603605), reported significant growth in both revenue and profit for the first half of the year, alongside a dividend distribution plan of 8 yuan per 10 shares [1][4] Financial Performance - The company achieved a revenue of 5.362 billion yuan, representing a year-on-year increase of 7.21% [1] - Net profit attributable to shareholders reached 799 million yuan, up 13.80% year-on-year [1] - The net profit after deducting non-recurring gains and losses was 771 million yuan, reflecting a growth of 13.49% [1] - The sales net profit margin improved to 15.41%, an increase of 0.7 percentage points compared to the same period last year [1] - The sales gross profit margin reached 73.38%, up 1.99 percentage points year-on-year, driven by cost reduction and efficiency improvement measures [1] - Operating cash flow showed remarkable performance, with a net amount of 1.293 billion yuan, a significant increase of 95.34% year-on-year [1] Business Structure - Online channels remain the core growth engine, with online revenue of 5.109 billion yuan, a year-on-year increase of 9.17%, accounting for 95.39% of total operating revenue [1] - Direct online sales generated 3.905 billion yuan, up 4.87% year-on-year, with strong performances on platforms like Tmall, Douyin, and JD [1] - Online distribution revenue was 1.204 billion yuan, reflecting a year-on-year growth of 25.91%, indicating enhanced channel vitality [1] Offline Channel Performance - Offline channels faced short-term pressure, with revenue of 247 million yuan, a decline of 21.49% year-on-year [2] - The company is optimizing store layouts, upgrading terminal images, and expanding new types of mall collection stores to strengthen its fundamentals [2] Brand Diversification - The core brand "Proya" maintained steady performance with revenue of 3.979 billion yuan, accounting for 74.27% of total revenue [2] - The color cosmetics brand "Caitang" continued to grow, generating 705 million yuan, a year-on-year increase of 21.11% [2] - The hair care brand "Off&Relax (OR)" saw revenue of 279 million yuan, up 102.52% year-on-year, driven by new product launches [2] - The emerging color cosmetics brand "Yuanse Bota" achieved revenue of 97 million yuan, reflecting a growth of 80.18% [2] - Revenue from hair care products reached 320 million yuan, up 131.25% year-on-year, while color cosmetics revenue was 837 million yuan, a year-on-year increase of 25.79% [2] R&D and Supply Chain - The company invested 95 million yuan in R&D during the reporting period, with 35 new patent applications, totaling 240 patents [3] - Self-developed raw materials such as wood butterfly seed extract and high-purity kava root extract were successfully applied to products [3] - The Huzhou production base is advancing digital construction and has been recognized as a national benchmark project for digital transformation [3] Shareholder Returns - The company plans to distribute a cash dividend of 8 yuan per 10 shares (tax included), with a total expected payout of 315 million yuan [4]

Core Insights - The article emphasizes the challenges faced by overseas brands entering the Chinese market and highlights how Hangzhou Shetao E-commerce serves as a facilitator for these brands, transforming obstacles into opportunities for growth [1][7]. Group 1: Location Strategy - Traditional cross-border brands often struggle with location choices, either clustering in high-rent first-tier cities or blindly moving to lower-tier cities, leading to losses or inventory issues. Hangzhou Shetao adopts a unique strategy centered around the "Tmall International Ecosystem," establishing a "front store and back warehouse" model in cross-border e-commerce pilot zones [2]. - By relocating an Australian health product brand's operations from Shanghai to Hangzhou, Shetao enabled the brand to benefit from tax incentives and quickly reach high-consumption demographics, achieving sales of over 80 million yuan in the first year [2]. - Shetao also collaborates with local universities to cultivate talent familiar with both international supply chains and Chinese e-commerce operations, significantly reducing operational costs for brands [2]. Group 2: Product Selection Strategy - A common mistake for overseas brands is to directly transfer their best-selling products to China without localization. Shetao employs a "data-driven and scenario reconstruction" approach to create tailored product lists for brands [3]. - For instance, a Korean beauty brand adjusted its product formula based on Shetao's insights into Chinese consumer preferences, resulting in a significant increase in new product success rates from 30% to 75% [3]. Group 3: Marketing Strategy - Cultural differences often hinder the effectiveness of overseas brands' marketing efforts. Shetao addresses this through "cultural translation," adapting brand stories to resonate with Chinese consumers [4]. - By reframing a French wine brand's marketing message to focus on relatable experiences, Shetao successfully transformed the brand's image and increased its repurchase rate by 60% [4]. Group 4: Supply Chain Flexibility - The "time lag effect" in cross-border supply chains poses challenges for overseas brands. Shetao's "smart supply chain platform" integrates sales data and consumption trends to create a dynamic replenishment model [5]. - A German baby product brand reduced its stock-out period from two months to 45 days by utilizing Shetao's system, resulting in an 80% decrease in stock-out rates and a significant improvement in customer satisfaction [5]. Group 5: Long-term Value Creation - The ultimate goal for overseas brands on Tmall International should be to build sustainable brand assets rather than merely focusing on sales. Shetao assists brands in establishing membership systems that enhance customer loyalty and reduce acquisition costs [6]. - By encouraging brands to participate in Tmall's "New Brand Incubation Program," Shetao helps generate buzz and increase brand visibility, leading to substantial sales growth and heightened brand search interest [6].

Market Overview - The Chinese foundation makeup market is expected to grow steadily, with the market size increasing from 73.19 billion yuan in 2022 to 93.70 billion yuan in 2024, and is projected to exceed 100 billion yuan in 2025, indicating a healthy and active industry phase [1][9][10] - Online sales are dominated by Douyin, which holds a 51.23% share of the online GMV, followed by Taobao with 29.02%, while Pinduoduo has surpassed JD, highlighting the potential of lower-tier markets [1][12][15] Consumer Insights - The core consumer group is aged 31-35, with 37.54% residing in third-tier cities or below; nearly 90% of consumers have skin blemishes, emphasizing the demand for coverage and long-lasting makeup [2][5] - Daily commuting (64.36%) and social gatherings (85.64%) are the primary usage scenarios, with consumers preferring natural makeup (70.24%) and valuing lightweight, breathable, and long-lasting products [2][5] Product Trends - The market is witnessing continuous upgrades in long-lasting makeup technology, with brands like Caitang and Laose achieving 24-hour wear through patented technologies; the trend of combining makeup with skincare is becoming mainstream [2][7] - Scene-specific innovations, such as mini portable products and exclusive solutions for different occasions, are gaining popularity, along with cultural empowerment and IP collaborations enhancing product appeal [2][7] Competitive Landscape - The foundation makeup category is primarily dominated by basic foundation products, with Douyin users showing a strong preference for three-dimensional makeup effects [1][16] - Estee Lauder leads the foundation liquid market on Taobao, while Douyin is dominated by brands like Passional Lover; in the cushion category, YSL has a significant advantage on Taobao, while Douyin is a stronghold for domestic brands like Ruikefu and Laose [1][25][29] Category Performance - The foundation makeup products can be categorized into four main types: base makeup, makeup primer, local touch-up products, and setting products [7] - The basic foundation category holds a dominant position across platforms, with Douyin's local touch-up category accounting for 8.7%, reflecting users' pursuit of a three-dimensional makeup look [1][16]