Industry Overview - The beauty industry is showing signs of recovery, with a reported 8.8% year-on-year growth in retail sales of cosmetics for December 2025 according to the National Bureau of Statistics [1] - In January 2026, Douyin's beauty GMV increased by over 20% year-on-year, indicating improved daily sales and self-broadcasting efforts by brands [1] Company Insights - According to a report by Guotai Junan, the main brand of Shangmei Co., Han Shu, continues to expand its product categories, while sub-brands Yiye and Anminyou are experiencing significant growth in single products, suggesting a strong multi-brand strategy that could drive future growth [2] Stock Performance - Over the past week (February 5 to February 11, 2026), Shangmei Co.'s stock price has experienced a downward trend, with a decline of 2.61%. The stock reached a high of 67.95 HKD and a low of 62.10 HKD, with a trading volume of approximately 334 million HKD. Technical indicators show that MACD is in negative territory and KDJ is weak, indicating pressure on the stock price [3]

Core Viewpoint - The beauty industry is expected to maintain steady growth in 2026, driven by product innovation and the rise of domestic brands, with Douyin's beauty GMV projected to grow over 20% year-on-year in January 2026, reflecting a marginal improvement during the off-season due to brand efforts in daily sales and self-broadcasting, alongside the impact of the Spring Festival timing [1][2]. Group 1: Strong Product and Brand Momentum - Companies with strong product and brand momentum are expected to achieve high growth through new product launches and category expansions, such as Ruoyuchen, which is focusing on high-end household cleaning and health products [3]. - Beijiaojie is maintaining stable performance in oral care and is expected to benefit from the trend of AKK ingredients in its probiotic raw material business [3]. - Maogeping is positioned as a high-end brand with ongoing expansion in offline counters and online sales, anticipating rapid growth across multiple product lines [3]. - Linqingxuan is benefiting from the trend of oil-based skincare, with its flagship essence oil performing well and new products showing promise [3]. - Shangmei Co. is expanding its main brand Han Shu and sub-brands, with strong growth expected from key products [3]. Group 2: Leading Brands with Strong Asset Value - Beitanie has been actively adjusting its channel and inventory mechanisms since 2025, leading to product structure upgrades and profit recovery, with strong GMV growth in January 2026 [4]. - Proya is expected to have a clear new product strategy in 2026, launching several key products and expanding its sub-brands to drive steady growth [4]. Investment Recommendations - Companies with strong fundamentals and high growth potential recommended for increased holdings include Ruoyuchen, Beijiaojie, Maogeping, Linqingxuan, and Shangmei Co. [5]. - Companies showing signs of bottom improvement include Beitanie, Proya, Dengkang Oral, Shanghai Jahwa, and Runben Co. [5].

Summary of Key Points from the Conference Call Records Industry Overview - The records focus on the cosmetics industry in China, specifically analyzing the Gross Merchandise Value (GMV) of various brands in January 2026 through data from the Douyin platform. Key Companies and Their Performance 1. 上美股份 (Shangmei Group) - Total GMV for 韩束 (Hansu) and its sub-brands in January was approximately 6.6 billion CNY, representing a 9% increase year-over-year [1] - 韩束 brand GMV was about 5.3 billion CNY, showing a decline of 3% [1] - NewPage brand GMV reached approximately 0.7 billion CNY, marking a significant increase of 120% [1] - 极方 (Jifang) achieved a GMV of 0.1 billion CNY, with rapid growth year-over-year [1] - 聚光白 (Juguangbai) also recorded a GMV of 0.1 billion CNY, indicating high growth [1] - 安敏优 (Anminyou) had a GMV of 0.3 billion CNY, with a remarkable year-over-year growth of 267% [1] 2. 珀莱雅 (Proya) - The three major brands under Proya had a combined GMV of 3.5 billion CNY in January, reflecting a 2% increase [1] - The main brand, 珀莱雅, generated a GMV of approximately 2.8 billion CNY, down by 2% [1] - 彩棠 (Caitang) brand GMV was 0.3 billion CNY, showing a decline of 12% [1] - OR洗护 (OR Hair Care) brand GMV reached 0.3 billion CNY, with a substantial increase of 148% [1] 3. 若羽臣 (Ruoyuchen) - The combined GMV for the brands 绽家 (Zhanjia), 斐萃 (Feicui), and Nuibay was 1.7 billion CNY [2] - 绽家 brand GMV was 0.7 billion CNY, increasing by 88% [2] - 斐萃 brand GMV was 0.8 billion CNY, showing a remarkable growth of 345% [2] 4. 丸美股份 (Marubi) - The total GMV for its two main brands was 2.6 billion CNY, reflecting a 1% increase [2] - 主品牌丸美 (Marubi) had a GMV of approximately 1.8 billion CNY, up by 5% [2] - 恋火 (Lianhuo) brand GMV was 0.8 billion CNY, down by 7% [2] 5. 毛戈平 (Mao Geping) - The brand achieved a GMV of approximately 2.9 billion CNY, with an increase of 78% [2] 6. 林清轩 (Lin Qingxuan) - The brand's GMV was 2.6 billion CNY, reflecting a significant increase of 145% [2] 7. 薇诺娜 (Winona) - The brand recorded a GMV of 1.0 billion CNY, with a growth of 156% [2] 8. 润本 (Runben) - The brand's GMV was approximately 0.4 billion CNY, showing a slight decline of 1% [2] 9. 福瑞达 (Furuida) - The two major brands under Furuida had a combined GMV of about 0.8 billion CNY, increasing by 12% [2] 10. 水羊股份 (Shuiyang) - The four major brands achieved a GMV of approximately 0.7 billion CNY, doubling year-over-year [2] 11. 上海家化 (Shanghai Jahwa) - The three skincare brands under Shanghai Jahwa had a combined GMV of about 0.9 billion CNY, reflecting a significant increase of 252% [2] 12. 植物医生 (Plant Doctor) - The brand's GMV in December was 0.1 billion CNY, showing a decline of 5% [2] 13. 拉芳 (Lafang) - The brand achieved a GMV of approximately 0.1 billion CNY, with an increase of 135% [2] Additional Insights - The data indicates a mixed performance across various brands, with some experiencing significant growth while others faced declines. - The overall trend suggests a competitive landscape in the cosmetics industry, with emerging brands showing strong growth potential, particularly in the Douyin channel. This analysis highlights the dynamic nature of the cosmetics market in China, emphasizing the importance of monitoring GMV trends for investment opportunities and risk assessment.

Industry Overview - The Chinese beauty industry is transitioning from "incremental expansion" to "stock game," indicating a shift towards a mature market with a projected market size of 465.3 billion yuan by 2025, reflecting a 5.1% year-on-year growth [1] - Domestic brands are gaining market share by accurately understanding local consumer needs and demonstrating agile operational responses, evolving from market participants to market leaders [1] - The competition has shifted from traffic acquisition to a systematic comparison of brand strength, product technology, and sustainable innovation capabilities, leading to a concentration of resources among top companies with established multi-brand matrices and platform operations [1] Company Performance - The company has successfully transformed from a "single-core drive" to a "platform group," with its main brand, Han Shu, contributing 3.344 billion yuan in revenue in the first half of 2025, shifting growth from reliance on Douyin to expanding into men's skincare and high-end hair care [2] - The company has validated its brand incubation capabilities, with the "Yi Ye" brand representing a second growth curve, achieving a 146.5% year-on-year revenue increase to 397 million yuan in the same period [2] - Emerging brands like An Min You and Ji Fang are also showing strong growth, contributing to the company's long-term multi-brand matrix [2] Long-term Strategy - The company has outlined a clear blueprint to achieve 30 billion yuan in sales by 2030, driven by three core strategies: the implementation of research results, expansion of brand categories, and deepening global layout [3] - The company plans to enhance its product efficacy through the expansion of technology matrices like X-peptide and leverage global expert resources [3] - The company aims to establish local manufacturing and operations in Southeast Asia while applying AI in production and marketing to improve operational efficiency, supporting the long-term revenue target [3] - Expected EPS for the company from 2025 to 2027 is projected to be 2.73, 3.41, and 4.04 yuan respectively, maintaining a "buy" rating [3]

Investment Rating - The report maintains a "Buy" rating for the company, indicating a projected investment return that exceeds the market benchmark by over 20% in the next 6-12 months [6]. Core Insights - The Chinese beauty industry is transitioning from "incremental expansion" to "stock game," with the market expected to reach a scale of 465.3 billion yuan by 2025, reflecting a 5.1% year-on-year growth, marking the maturity of the market [1][6]. - Domestic brands are gaining market share due to their understanding of local consumer needs and agile operations, shifting from market participants to leaders [1]. - The competition has evolved from traffic acquisition to a systematic comparison of brand strength, product technology, and sustainable innovation capabilities [1]. Summary by Relevant Sections Company Performance - The company has successfully transitioned from a "single-core drive" to a "platform group" strategy, with its main brand, Han Shu, contributing 3.344 billion yuan in revenue in the first half of 2025, driven by the expansion into men's skincare and high-end hair care [2]. - The second growth curve represented by the "Yi Ye" brand has seen a revenue surge of 146.5% year-on-year to 397 million yuan [2]. Long-term Growth Strategy - The company has set a clear goal to achieve 30 billion yuan in sales by 2030, supported by three core drivers: scientific research outcomes, brand category expansion, and deepening global layout [3]. - The application of AI in production and marketing, along with talent development, is expected to enhance operational efficiency and support the long-term revenue target [3]. Financial Projections - Revenue is projected to grow from 4.191 billion yuan in 2023 to 12.646 billion yuan in 2027, with a compound annual growth rate (CAGR) of 56.6% in 2024 and 27.4% in 2025 [4]. - Net profit is expected to increase from 461 million yuan in 2023 to 1.609 billion yuan in 2027, with a significant growth rate of 213.5% in 2024 [4]. - Earnings per share (EPS) are forecasted to rise from 1.16 yuan in 2023 to 4.04 yuan in 2027, reflecting strong profitability [4].

Overview - The report indicates a marginal improvement in the performance of public REITs in Q4 2025, with significant growth in public utility and consumer revenue, while industrial parks and warehousing have shifted from negative to positive growth. EBITDA declines in energy and transportation sectors have narrowed, and rental housing performance has faced slight pressure. The completion rates for distributable amounts of newly issued REITs for 2024 and 2025 are 79% and 64% respectively [2][13]. Consumer Sector - The consumer sector has shown strong performance during the peak season, with improvements in rental rates and occupancy across most projects. Two-thirds of the projects achieved their highest revenue in the last five periods, indicating overall strong performance [2][13]. Rental Housing - The overall occupancy rate in the rental housing sector remains high, but rental performance is mixed. Government-led projects have stabilized both volume and price, while market-driven projects have adjusted prices downward to maintain occupancy [2][13]. Public Utilities - The public utility sector has seen significant revenue growth due to an increase in waste sources for biomass projects. However, the heating supply in Jinan has underperformed expectations, and water-related projects have experienced seasonal declines [2][13]. Energy Sector - The energy sector is experiencing increased differentiation, with fluctuating power generation and generally declining electricity prices. Natural gas projects are under the most pressure, with EBITDA margins dropping to negative values, while offshore wind and photovoltaic projects remain stable [3][13]. IDC Sector - The IDC sector benefits from long-term contracts with major clients, leading to stable volume and price. The distribution amounts for IDC in Q4 2025 have seen significant growth [3][13]. Transportation Sector - Traffic volume in the transportation sector is influenced by changes in surrounding road networks. Some projects have benefited from traffic recovery due to completed construction, while others continue to face diversion pressures, leading to varied performance [3][13]. Warehousing and Logistics - The warehousing and logistics sector has seen a widening decline in rental rates for market-oriented leasing projects, but this has effectively driven an increase in occupancy rates. Overall, the industry is exhibiting a trend of "price for volume" [3][13]. Industrial Parks - The industrial park market is showing weak recovery and strong differentiation. Commercial office projects are facing significant rental pressure, while manufacturing parks have maintained stable revenue but experienced a general decline in EBITDA [3][13]. Cosmetics and Aesthetic Medicine Sector - The cosmetics sector is expected to see steady growth in brand performance, with retail sales of cosmetics projected to reach 4,653 billion yuan in 2025, a year-on-year increase of 5.1%, outperforming the overall retail market by 1.4 percentage points [14][16]. - Key players in the Hong Kong stock market, such as Up Beauty and Mao Ge Ping, are expected to report significant growth in GMV, driven by strong performance on platforms like Douyin during promotional events [14][16]. E-commerce and Agency Operations - The e-commerce agency sector is experiencing a resurgence, with companies like Yi Wan Yi Chuang and Shui Yang Co. expected to see substantial profit growth due to improved operational efficiency and brand development [16][16].

Summary of the Conference Call Transcript Company Overview - **Company**: Shanghai Shumei Cosmetics Co., Ltd. (上美股份) - **Stock Code**: 2145.HK - **Current Stock Price**: 74.80 HKD (as of January 21, 2026) - **Target Price**: 116.00 HKD (by December 2026) [2][12] Key Points and Arguments Financial Projections - **2026 Goals**: - Revenue and profit are expected to grow by 25% year-on-year, driven by: - Han Shu (韩束) sales growth of 20% - Yi Ye (一页) sales growth exceeding 50% - Emerging brands (e.g., An Min You) gradually increasing sales [1][4] - **Revenue Forecast**: - FY2026 revenue projected at 10,839 million HKD, with a growth rate of 25.5% [7][13] - FY2027 revenue projected at 12,911 million HKD, with a growth rate of 19.1% [7][13] Operational Recovery - Previous controversies are fading, with operational metrics (daily sales, return rates, traffic acquisition) returning to normal levels due to rapid responses from the company, including: - Live streaming from factories and R&D centers - Collaborations with official media - Long-term brand-building activities, such as advertisements featuring well-known actors [1][4] International Expansion - Mid-term goal to achieve sales of 3 billion HKD by 2030, with 2026 serving as a foundational year [1][4] Shareholder Returns - Dividend payout ratio is expected to maintain at approximately 38% in the first half of 2025 [1][4] Market Position and Trends - The company is expected to benefit from the rapid growth of the Chinese beauty industry and the "Guochao" (national trend) phenomenon, leveraging a successful multi-brand portfolio, robust R&D, comprehensive sales network, and increasing brand value [1][8] Emerging Brands Performance - **Han Shu**: Targeting a 20% sales increase in 2026, with Douyin (TikTok) as a major contributor [4] - **Yi Ye**: Aiming for over 50% sales growth in 2026, driven by an expanded customer base and product offerings [4] - **An Min You**: Projected sales of 400 million HKD in 2026, with stable daily sales and profit margins [4] - **Ji Fang**: Targeting sales of 100 to 200 million HKD in 2026 [4] Financial Metrics - **Earnings Per Share (EPS)**: - FY2026 adjusted EPS projected at 3.67 HKD, with a growth rate of 27.4% [7][13] - **Profit Margins**: - Gross margin expected to be 78.2% in FY2026 [7][13] - EBITDA margin projected at 14.5% [7][13] Risks and Catalysts - **Downside Risks**: - Potential decline in product quality, inflation, challenges in new brand incubation, and government regulations [14] - **Upside Catalysts**: - Successful incubation of new brands and better-than-expected growth of main brands [15] Conclusion - The company maintains a "Buy" rating with a target price of 116 HKD, reflecting a favorable outlook based on projected growth in the beauty sector and effective operational strategies [1][12]

Core Viewpoint - The recent controversy surrounding the ingredient EGF in the core brand Han Shu of Shangmei Co. has led to significant stock price fluctuations and raised concerns about the company's future growth plans [4][5][8]. Group 1: Company Developments - Chairman Lv Yixiong announced that executive director Luo Yan purchased 364,000 shares at approximately HKD 75.5 each, totaling about HKD 66.32 million, indicating strong confidence in the company's future [2]. - The company aims to achieve a revenue target of 30 billion yuan by 2030, requiring a doubling of current revenue within five years [12][38]. - In the first half of the year, the company's revenue reached 4.1 billion yuan, with a goal of hitting 10 billion yuan in annual revenue for the new brand Newpage [11][22]. Group 2: Controversy and Market Reaction - The controversy originated from the detection of EGF in two Han Shu face masks, leading to a significant drop in stock price, with a loss of over 10 billion yuan in market value [5][8]. - Han Shu's official response included presenting third-party testing results to refute the claims, but investor concerns persisted, resulting in a 30% drop in stock price on the first trading day after the holiday [8][39]. - The Chinese Fragrance and Cosmetic Industry Association noted that there is currently no commercial ELISA kit available for testing EGF in cosmetics, which complicates the situation [9]. Group 3: Strategic Expansion Plans - The company is in a critical expansion phase, planning to launch 20 new brands between 2025 and 2027, primarily leveraging the Douyin platform for marketing [10][22]. - The company is also focusing on international markets, with a significant investment of 300 million yuan in a factory in Southeast Asia [24]. - The strategy includes hiring top talent and implementing a rigorous selection process to enhance brand development and marketing effectiveness [29][32].

Core Viewpoint - Up Beauty Co., Ltd. has achieved a year-to-date increase of over 150%, significantly outperforming its peers in the Hong Kong "new consumption" sector, indicating strong market confidence in the company's multi-brand and multi-category growth strategy [1][2]. Group 1: Multi-Brand Development - Up Beauty has successfully transitioned from a "single brand dependency" to a "multi-brand co-development" model, with its second-tier brands gaining momentum and contributing to overall growth [2]. - Han Shu, the leading brand, reported a revenue of 3.344 billion yuan in the first half of the year, marking a 14.3% year-on-year increase, and dominated multiple beauty rankings during the Double 11 shopping festival [2]. Group 2: Strong Performance of New Brands - The brand "Yi Ye" has emerged as a core growth driver, achieving a revenue of 397 million yuan in the first half of the year, a substantial increase of 146.5%, and a 145% year-on-year growth during Double 11 [3]. - Yi Ye's repurchase rate exceeds 50%, indicating strong customer loyalty and market presence, supported by successful product launches like the Baby Comfort Cream [3]. Group 3: Breakthroughs in New Brands - New brands such as An Min You and Ji Fang have shown remarkable growth, with An Min You's GMV reaching approximately 20 million yuan in August and a 208% year-on-year increase during Double 11 [4]. - Ji Fang's sales also surged, achieving a 302% increase in total sales during Double 11 compared to the previous month [5]. Group 4: Multi-Category Expansion - Up Beauty is strategically expanding into multiple categories, capturing diverse consumer demands and enhancing growth potential [6]. - Han Shu has made significant inroads into various segments, including men's skincare and high-end hair care, with sales exceeding 100 million yuan in ten subcategories [6]. Group 5: Multi-Channel Growth - The company has successfully diversified its sales channels, breaking previous concerns about reliance on a single platform, with strong performances across platforms like Douyin, Tmall, and JD during Double 11 [9][10]. - Han Shu achieved top rankings across multiple platforms, while other brands also experienced balanced growth, indicating a robust multi-channel strategy [9][10]. Group 6: Strengthening R&D Capabilities - Up Beauty is enhancing its core R&D capabilities by integrating top-tier scientific resources, including the appointment of Dr. Karl Lintner as Chief Scientific Advisor [11][12]. - The establishment of a joint laboratory with China Pharmaceutical University aims to accelerate the translation of research into market-ready products, enhancing the company's competitive edge in skincare innovation [13].

Core Insights - The report from Dongfang Securities highlights the transition in the beauty industry from "functional consumption" to "composite efficacy + emotional consumption," indicating increased consumer resilience [1] - The beauty sector is diversifying its sales channels, moving away from reliance on a single traffic window, which is enhancing channel efficiency [1] - Leading brands are demonstrating stronger resilience, with a focus on companies with robust brand assets that can capitalize on channel and product cycles [1] Group 1: Sales Performance - During the Double 11 shopping festival (October 7 - November 11), total e-commerce sales reached 16,950 billion yuan, reflecting a year-on-year growth of 14.2% [1] - The top five categories in e-commerce sales were home appliances, mobile digital products, clothing, beauty and personal care, and shoes/bags, with respective market shares of 16.5%, 14.6%, 14%, 8.2%, and 6.5% [1] - Beauty subcategories saw significant sales, with skincare products generating 991 billion yuan (+11.65%), hair care and cleaning products at 444 billion yuan (+13.54%), and perfumes and cosmetics at 334 billion yuan (+13.52%) [1] - Instant retail sales reached 670 billion yuan, showcasing a remarkable growth of 138.4% [1] Group 2: Brand Performance - Tmall's beauty rankings show Proya leading for three consecutive years, followed by Estee Lauder, Lancôme, L'Oréal, and SkinCeuticals, indicating a stable top five [2] - Douyin's beauty rankings are led by Han Shu, with Proya, L'Oréal, Helena Rubinstein, and Gu Yu following, highlighting Douyin as a key platform for domestic beauty brands seeking growth [2] - The sales of composite efficacy skincare products accounted for 47.1% of the top 50 best-selling skincare items on Tmall, with anti-aging products being the most popular [2] - Brands like Han Shu and New Page reported significant sales growth across multiple channels, with New Page achieving a 145% increase in total sales [3] - The overall performance of leading brands like Proya and Weinuo demonstrated strong growth, reinforcing the notion of enhanced brand momentum in a stable market environment [3]