Investment Rating - The investment rating for the company is "Buy" and is maintained [6] Core Views - The company reported a revenue of 1.77 billion yuan for the first half of 2025, representing a year-on-year growth of 30.8%, while the net profit attributable to shareholders was 190 million yuan, up 5.2% year-on-year. In the second quarter alone, revenue reached 920 million yuan, with a year-on-year increase of 33.5%, but net profit fell by 23.1% year-on-year to 50 million yuan [2][4] Summary by Sections Financial Performance - In the first half of 2025, the company achieved a revenue of 1.77 billion yuan, a 30.8% increase year-on-year, and a net profit of 190 million yuan, which is a 5.2% increase year-on-year. For the second quarter, revenue was 920 million yuan, reflecting a 33.5% year-on-year growth, while net profit decreased by 23.1% year-on-year to 50 million yuan [2][4][10] Brand and Product Strategy - The company continues to implement a big product strategy, with its main brands, Marubi and Lianhuo, achieving revenues of 1.25 billion yuan and 520 million yuan respectively in the first half of 2025, representing year-on-year growth of 34.4% and 23.9%. New products such as the small gold needle cream and small gold needle mask have been launched, contributing to the brand's ongoing expansion [10] Sales and Profitability - The company's net profit margin decreased by 2.6 percentage points to 10.5% in the first half of 2025, primarily due to a 3.4 percentage point increase in sales expenses. Although management and R&D expenses were optimized, the overall expense ratio still increased [10] Future Outlook - The company is expected to maintain its growth trajectory with projected earnings per share (EPS) of 1.06 yuan, 1.43 yuan, and 1.78 yuan for 2025, 2026, and 2027 respectively. The ongoing brand momentum and effective cost management are anticipated to support future profitability improvements [10]

Group 1 - The beauty and personal care sector has shown strong performance in Q1 2025, with the SW Beauty Care Index rising by 13.4%, leading all 31 SW primary industries [4][10][12] - The cosmetics segment is focusing on enhancing brand matrices and introducing new ingredients, benefiting from an optimized competitive landscape [4][6] - The medical beauty market is evolving with new products stimulating consumer interest, and domestic companies are expected to become major competitors in the light medical beauty sector [4][6] Group 2 - The e-commerce sector is witnessing new consumption models and brands, which are helping to drive growth in the industry [4][6] - The report recommends several companies in the cosmetics sector, including Up Beauty and Proya, which have low PE multiples and strong growth potential [4][6] - In the medical beauty segment, companies with high R&D barriers and strong profitability, such as Aimeike, are highlighted as key investment opportunities [4][6] Group 3 - The personal care market is projected to reach CNY 283.3 billion by 2024, with a compound annual growth rate (CAGR) of 8.4% from 2023 to 2028 [32][34] - Domestic brands are increasingly replacing foreign brands in the personal care sector, with a notable rise in innovative products and marketing strategies [32][36] - The high-end market is experiencing significant growth, with premium products seeing a 27% increase in average transaction value in H2 2024 [44]

Investment Rating - The investment rating for the company is "Outperform the Market" [5][16][20] Core Views - The company achieved a revenue of 2.97 billion in 2024, representing a year-on-year growth of 33.44%, with a net profit attributable to the parent company of 342 million, up 31.69% year-on-year [1][7] - The main brand, Marubi, generated a revenue of 2.055 billion in 2024, reflecting a growth of 31.69%, while the secondary brand, Lianhuo, achieved a revenue of 905 million, up 40.72% [2][8] - The company is experiencing a product momentum explosion, particularly with its key products, which are driving significant revenue and profit growth [3][16] Financial Performance - In Q1 2025, the company reported a revenue of 847 million, a year-on-year increase of 28.01%, and a net profit of 135 million, up 22.07% [1][7] - The gross margin for 2024 was 73.70%, an increase of 3.01 percentage points year-on-year, and is projected to rise to 76.05% in Q1 2025 [3][11] - The company’s operating cash flow for 2024 was 301 million, showing a decrease of 11.09% year-on-year, while Q1 2025 saw a significant increase of 117.93% [14] Revenue Breakdown - The eye care category generated 689 million in revenue for 2024, a growth of 60.78%, primarily driven by the Marubi Xiaohong Pen eye cream [2][8] - Online sales channels contributed 2.541 billion in revenue for 2024, up 35.77%, accounting for 85.55% of total revenue [2][8] - The company’s top three core products accounted for 64% of sales, indicating a further increase in product concentration [2][8] Profitability Metrics - The net profit margin for 2024 was 11.53%, a decrease of 0.94 percentage points year-on-year, while the gross profit margin continued to improve [11][18] - The company’s return on equity (ROE) is projected to reach 10.1% in 2024, increasing to 17.4% by 2027 [4][18] Future Projections - The company is expected to achieve a revenue of 3.941 billion in 2025, with a net profit of 476 million, reflecting a growth of 32.7% and 39.4% respectively [4][18] - The forecast for 2027 includes a net profit of 822 million, with a corresponding price-to-earnings (PE) ratio of 20x [3][4][16]