Core Viewpoint - Proya, a leading Chinese beauty brand, has submitted an application for H-share listing on the Hong Kong Stock Exchange after eight years of being listed on A-shares, despite facing challenges such as declining net profits [1][10]. Company Development - Proya was founded in 2003 by Hou Junchen and his brother-in-law Fang Youyou, launching its first brand in 2006 [2]. - The company went public on the Shanghai Stock Exchange in 2017, marking a significant milestone in its growth trajectory [2]. - Proya has expanded its brand portfolio from a single brand to multiple brands, including Proya, Yefuti, Kuirufu, Caitang, Yuansheng Bota, and Off&Relax, with four key brands projected to exceed 500 million yuan in retail sales by 2024 [2][3]. Market Position - Proya ranked 15th among domestic cosmetics groups in 2019, became the largest domestic cosmetics group in 2021, and is projected to rank 5th in 2024, maintaining its position as the top domestic cosmetics group for four consecutive years [3]. - In 2024, Proya became the first Chinese cosmetics group to surpass 10 billion yuan in sales revenue [3]. Sales Channels - The rapid growth in Proya's retail sales is attributed to its focus on online sales channels, which accounted for over 90% of revenue since 2022, reaching 95.4% in the first half of 2024 [4]. - Online direct sales made up 75.5% of total online revenue, while online distribution accounted for 19.6% [4]. Financial Performance - In Q3 2023, Proya reported revenue of 1.736 billion yuan, a year-on-year decline of 11.63%, with net profit dropping by 22.30% [14][15]. - The company's stock price has been on a downward trend, with a decline of over 12% since the beginning of the year [10]. Leadership Transition - In September 2024, Hou Yameng, born in 1988, succeeded Fang Youyou as the general manager, marking a generational shift in leadership [9]. - Under Hou Yameng's leadership, Proya aims to implement a "Double Ten" strategy to enter the top ten global cosmetics companies within the next decade [9]. IPO Objectives - Proya's H-share IPO aims to enhance global brand visibility, attract international investors, and support its international expansion strategy [16]. - The funds raised will be allocated to R&D, brand building, and digital transformation initiatives [16].

Core Viewpoint - Proya has submitted its prospectus for a Hong Kong IPO, aiming to strengthen its market presence as a leading domestic cosmetics brand in China, with ambitions to rank among the top ten global cosmetics companies within the next decade [1][2]. Group 1: Company Overview - Proya, founded in 2003, has established itself as a significant player in the cosmetics industry, focusing on affordable beauty products primarily in lower-tier cities [3]. - The company has developed a brand matrix that includes its main brand Proya, as well as several other brands in makeup and personal care [3]. Group 2: Financial Performance - In 2022, Proya achieved a main business revenue of 6.385 billion yuan, with approximately 82.7% of this revenue coming from the Proya brand [4]. - The revenue growth rate for Proya has slowed, with a projected growth of 19.55% in 2024, down from 36.36% in the previous year [4][9]. - By the first half of 2025, Proya's revenue growth had dropped to 7.21%, significantly lower than the 37.9% growth in the same period the previous year [10]. Group 3: Brand Performance - The Proya brand continues to dominate revenue contributions, but its growth has stagnated, with a decline in revenue in the first half of 2025 compared to the previous year [4][10]. - Other brands under Proya, such as "Caitang," have also seen a decline in growth rates, with "Caitang" achieving a revenue of 1.191 billion yuan in 2024, a significant drop from its previous year's growth [5]. Group 4: Management Changes - Proya has experienced significant management changes, including the appointment of a new general manager, Hou Yameng, and the departure of key executives [14]. - The new management team is reportedly focused on expanding Proya's international presence, particularly in markets like Japan and Southeast Asia [15][16]. Group 5: International Expansion - Proya's international revenue remains minimal, accounting for only 1.3% of total revenue as of 2024, indicating that its overseas strategy is still in the exploratory phase [16]. - The company is considering acquisitions to enhance its international portfolio, particularly in the baby care, fragrance, and men's skincare segments [16].

Core Viewpoint - Proya has submitted its prospectus for a Hong Kong IPO, aiming to strengthen its presence in the cosmetics industry and achieve a position among the top ten global cosmetics companies within the next decade [2][3]. Company Overview - Founded in 2003 in Hangzhou, Proya has evolved into the fifth largest cosmetics group in China by retail sales as of 2024, being the only domestic brand among the top five [2]. - The company initially focused on the mass market, targeting third- and fourth-tier cities with a cost-effective strategy and has since expanded into e-commerce and multi-brand strategies [6]. Brand Performance - Proya's main brand continues to dominate its revenue, contributing approximately 80% of total income, with 2022 revenue from Proya at 52.64 billion yuan, accounting for 82.7% of total revenue [7]. - Despite the introduction of new brands, Proya's revenue growth has slowed, with the main brand's growth rate dropping from 36.36% in 2023 to 19.55% in 2024, and a negative growth in the first half of 2025 [7][10]. Financial Performance - In 2024, Proya's revenue reached 10.778 billion yuan, marking its first year surpassing the 10 billion yuan threshold, but growth rates have declined, with a 21.04% increase compared to the previous year [10]. - The company experienced a significant drop in revenue in the third quarter of 2025, with a year-on-year decline of 11.63% and a net profit decrease of 23.64% [11]. Pricing Trends - Average selling prices for Proya's products have decreased across all categories, with skincare products dropping by 22.19% year-on-year, and makeup products by 10.99% [12]. Management Changes - Proya has undergone significant management changes, including the appointment of a new general manager, which coincided with internal restructuring and the departure of key executives [15]. - The new management team is reportedly focused on international expansion, particularly in markets like Japan and Southeast Asia, with a current overseas revenue contribution of only 1.3% [16]. Strategic Initiatives - Proya is considering acquisitions to enhance its product offerings in areas such as children's products, fragrances, and men's skincare, with plans to leverage its Paris subsidiary for these initiatives [17].

Investment Rating - The report maintains a "Positive" outlook on the cosmetics and medical beauty industry, highlighting potential growth opportunities despite recent market underperformance [2]. Core Insights - The cosmetics and medical beauty sector has underperformed the market, with the Shenwan Beauty Care Index declining by 3.1% from October 31 to November 7, 2025 [3][4]. - The upcoming Double 11 shopping festival is expected to boost performance for companies like Shuangmei Co. and Maogeping, with strong sales anticipated on platforms like Douyin and Tmall [3][9]. - Key companies such as Proya, Shanghai Jahwa, and Ruifucheng have shown varying performance, with Proya's revenue for Q3 2025 at 1.736 billion yuan, down 11.63% year-on-year, while Shanghai Jahwa's revenue increased by 28% to 1.483 billion yuan [10][16]. Summary by Sections Industry Performance - The cosmetics and medical beauty sector has shown a decline, with the Shenwan Cosmetics Index down 2.6%, underperforming the Shenwan A Index by 3.3 percentage points [3][4]. - The top-performing stocks this week included *ST Meigu (+12.3%) and Jinsong New Materials (+6.2%), while Huaxi Biological and Beitaini saw declines of 7.8% and 7.4%, respectively [5]. Company Performance - Proya's Q3 2025 revenue was 1.736 billion yuan, a decrease of 11.63% year-on-year, with a net profit of 227 million yuan, down 23.64% [10][11]. - Shanghai Jahwa reported Q3 revenue of 1.483 billion yuan, up 28%, with a net profit of 140 million yuan [16]. - Ruifucheng's Q3 revenue reached 819 million yuan, a significant increase of 123.4% year-on-year, with a net profit of 33 million yuan [20]. Market Trends - The 8th China International Import Expo showcased international beauty brands, indicating a shift towards high-end markets and functional skincare products [31]. - The report highlights the increasing importance of e-commerce channels, with brands like Maogeping and Shuangmei Co. performing well on platforms like Tmall and Douyin [9][24]. E-commerce Data - In September 2025, the GMV for domestic brands on Douyin and Tmall showed significant growth, with Shuangmei Co. achieving a GMV of 8.1 billion yuan, up 47% year-on-year [24]. - The overall retail sales of cosmetics in September 2025 reached 368 billion yuan, reflecting an 8.6% year-on-year growth, driven by pre-Double 11 promotions [25][27].

Core Viewpoint - Proya, a leading Chinese cosmetics company, has submitted an application for a listing on the Hong Kong Stock Exchange, aiming to become the first domestic beauty brand to achieve an "A+H" share listing, amidst increasing competition in the domestic beauty market [1][5]. Financial Performance - In the first half of 2025, Proya's main brand generated revenue of 3.979 billion yuan, a slight decrease of 0.08% year-on-year. Despite overall revenue and net profit growth in the first three quarters of this year, the growth rates have dropped to single digits, with both metrics showing a year-on-year decline in the third quarter [1][7]. - Proya's revenue for 2022, 2023, and 2024 was 6.385 billion yuan, 8.905 billion yuan, and 10.778 billion yuan, respectively, while net profit for the same years was 817 million yuan, 1.194 billion yuan, and 1.552 billion yuan [6]. Market Position and Strategy - Proya's stock price has decreased by 13.30% from the beginning of the year to November 4, 2023, with an average price-to-earnings ratio of 21.21 times, compared to significant increases in the stock prices of other beauty companies listed in Hong Kong [1]. - The company is focusing on a multi-brand strategy, with significant revenue growth from brands like Caitang (21.11% increase), Yuanshe Bota (80.18% increase), and Off&Relax (102.52% increase) in the first half of 2025 [7]. Research and Development - Proya has prioritized "research and product innovation" as the primary use of funds raised from the Hong Kong listing, aiming to enhance its research capabilities to overcome growth bottlenecks [9]. - Research and development expenses from 2022 to 2025 have been 128 million yuan, 174 million yuan, 210 million yuan, and 95 million yuan, representing 2%, 1.95%, 1.95%, and 1.77% of revenue, respectively [9]. Management Changes and Internationalization - Proya has undergone significant management changes since the second generation took over, with new appointments aimed at injecting fresh energy into the company and accelerating its internationalization strategy [11][12]. - The company has introduced a "Double Ten Strategy," aiming to rank among the top ten global cosmetics companies in the next decade, which reflects its ambition to transition from mere scale growth to becoming a strong industry benchmark [13].

Core Viewpoint - Proya Cosmetics Co., Ltd. is preparing for an IPO on the Hong Kong Stock Exchange, aiming to establish an "A+H" listing structure [1][3]. Financial Performance - Proya's revenue for 2022, 2023, and 2024 is projected to be RMB 6.385 billion, RMB 8.904 billion, and RMB 10.778 billion respectively, with corresponding gross profits of RMB 4.451 billion, RMB 6.227 billion, and RMB 7.695 billion [4][5]. - The company declared final dividends of RMB 247 million, RMB 359 million, and RMB 469 million for the years 2022, 2023, and 2024 respectively [2]. Recent Earnings - For the first half of 2025, Proya reported revenue of RMB 5.362 billion, a slight increase from RMB 5 billion in the same period of the previous year, with a gross profit of RMB 3.939 billion [5][6]. - In Q3 2025, Proya's revenue was RMB 1.736 billion, a year-on-year decrease of 11.63%, with net profit declining by 23.64% to RMB 227 million [8][9]. Revenue Breakdown - In the first half of 2025, Proya's revenue sources included RMB 4.2 billion from skincare (78.4%), RMB 837 million from color cosmetics (15.6%), and RMB 320 million from personal care (6%) [6]. - Online sales accounted for 95.4% of total revenue in the first half of 2025, with direct online sales contributing RMB 39 billion (72.9%) [7]. Shareholding Structure - The major shareholder, Hou Jun Cheng, holds 34.53% of the shares, while other significant shareholders include Fang Yu You with 15.06% and Hong Kong Central Clearing Limited with 6.85% [10][13].

Core Viewpoint - Proya, a leading beauty brand with annual revenue exceeding 10 billion, is seeking to list on the Hong Kong Stock Exchange, aiming to become the first beauty company with both A and H shares amid a slowing domestic market and increasing competition [1] Group 1: Financial Performance - Proya's main brand experienced its first negative growth in five years, with revenue of 3.979 billion in the first half of 2025, a slight decline of 0.08% year-on-year [3] - For the first three quarters of 2025, Proya's revenue reached 7.098 billion, with a net profit of 1.026 billion, showing only 1.89% and 2.65% growth respectively, significantly slowing compared to the same period in 2024 [2] - The company's sales expenses from 2022 to the first three quarters of 2025 totaled 15.443 billion, while R&D expenses were only 654 million, indicating a sales-to-R&D expense ratio of 23.61 times [6] Group 2: Brand and Market Dynamics - The revenue share of Proya's main brand has been declining, from 82.74% in 2022 to 74.27% in the first half of 2025, raising concerns about its competitive strength [3] - Proya has been implementing a multi-brand strategy, with significant growth in its sub-brands, such as a 21.11% increase in the彩棠 brand and a 102.52% surge in Off&Relax, but these brands still account for less than 25% of total revenue [3] - The company heavily relies on online sales, with 95.39% of revenue coming from online channels in the first half of 2025, but it faced a decline in customer numbers on major platforms like Tmall and Vipshop [3][4] Group 3: Management and Strategic Changes - Proya's management team has undergone significant changes since the second generation took over in 2024, with multiple high-level positions being filled by individuals with international backgrounds from major beauty companies [7][8] - The company announced a substantial cash dividend of 315 million, representing nearly 40% of its net profit for the first half of 2025, raising questions about the necessity of seeking additional financing through the Hong Kong listing [7]

Core Insights - The company experienced slight pressure on performance during the third quarter due to the seasonal downturn, with revenue for the first three quarters of 2025 reaching 7.098 billion, a year-on-year increase of 1.89%, and net profit attributable to shareholders at 1.026 billion, a year-on-year increase of 2.65% [1] Financial Performance - In Q3 alone, the company reported revenue of 1.736 billion, a year-on-year decrease of 11.63%, and net profit attributable to shareholders of 227 million, a year-on-year decrease of 23.64% [1] - The decline in Q3 performance is attributed to the pre-promotion expenses for the Double 11 shopping festival, which affected the company's financials [1] Brand and Channel Analysis - The main brand, Pechoin, saw a single-digit decline in revenue for the first three quarters, while the ROI on Tmall and Douyin platforms was 3.2 and 2.5, respectively, with return rates of 38% and 35% [2] - The brand Caitang experienced double-digit revenue growth, with Tmall and Douyin ROI at 2 and 1.7, respectively [2] - The brand OR saw revenue more than double, while the brand Yuefuti had single-digit growth, and the brand Yuanshi Bota approached double growth [2] - Online revenue growth was low single-digit, maintaining the same proportion of total revenue as in the first half of the year, while offline revenue saw a high double-digit decline [2] Margin and Cost Structure - In Q3 2025, the gross margin was 74.68%, an increase of 3.96 percentage points year-on-year, while the net margin was 13.19%, a decrease of 2.01 percentage points year-on-year [3] - The increase in gross margin is attributed to category structure optimization and cost reduction measures, including lower freight rates and improved procurement negotiation capabilities [3] - The company increased its promotional expenses due to the early timing of the Double 11 event, leading to a narrowing of the gross profit margin by 0.54 percentage points [3] Operational Efficiency - The inventory turnover days for Q1-Q3 2025 were 119 days, a decrease of 10 days year-on-year, while accounts receivable turnover days increased by 4 days to 16 days [3] - The company continues to optimize inventory management, contributing to the reduction in inventory turnover days [3] - The operating cash flow for Q3 2025 was -95 million, a year-on-year increase of 63.25% [3]

Investment Rating - The investment rating for the company is "Outperform the Market" [6][4][20] Core Views - The company's Q3 performance faced pressure due to seasonal factors and increased marketing expenses ahead of the Double 11 shopping festival, but it maintains a strong long-term growth outlook through strategic adjustments and brand positioning [1][4] - The main brand, Proya, continues to lead in sales on major platforms, indicating strong market presence despite short-term challenges [1][4] - The company has submitted an application for listing H shares on the Hong Kong Stock Exchange, which could enhance its capital structure and market reach [1] Financial Performance Summary - For the first three quarters of 2025, the company achieved revenue of 7.098 billion, a year-on-year increase of 1.89%, and a net profit of 1.026 billion, up 2.65% year-on-year [1] - In Q3 alone, revenue was 1.736 billion, down 11.63% year-on-year, with net profit decreasing by 23.64% to 227 million [1] - The gross margin for Q3 was 74.68%, an increase of 3.96 percentage points year-on-year, while the net margin was 13.19%, a decrease of 2.01 percentage points [3] Brand and Channel Performance - The main brand Proya saw a slight decline in revenue, while sub-brands like Caitang and OR experienced double-digit growth [2] - Online revenue growth was low single digits, while offline revenue saw a high double-digit decline [2] Cost and Efficiency Metrics - The company has optimized its cost structure, leading to improved gross margins despite increased marketing expenses [3] - Inventory turnover days decreased to 119 days, a reduction of 10 days year-on-year, indicating better inventory management [3] Future Earnings Forecast - The forecast for net profit for 2025-2027 has been slightly adjusted downwards to 1.644 billion, 1.751 billion, and 1.835 billion respectively, reflecting increased marketing investments [4][5] - The projected PE ratios for the same period are 18, 17, and 17 times [4]

Core Viewpoint - Proya Cosmetics Co., Ltd. has submitted its listing application to the Hong Kong Stock Exchange, with CICC and UBS serving as joint sponsors [1] Company Overview - Proya is a Chinese multi-brand beauty group focused on building a world-class cosmetics industry platform, offering high-quality cosmetic products that combine technology and quality [4] - The company ranks fifth among the top five groups in China's cosmetics industry by retail sales in 2024 and is the only domestic cosmetics group in this ranking [4] - Proya has maintained its position as the largest domestic cosmetics group in China for four consecutive years from 2021 to 2024 based on retail sales [4] Product Portfolio - Proya has developed a diverse portfolio covering skincare, color cosmetics, and personal care, with flagship brand Proya being the only single brand in China with two essence products exceeding 1 billion RMB in retail sales [4] - The company has multiple brands, including skincare brands "Proya," "Yuefuti," and "Kruif," color cosmetics brands "Caitang" and "Yuanse Bota," and personal care brand "Off&Relax" [4] - By 2024, Proya has four super products with retail sales exceeding 1 billion RMB, and it leads in the number of brands exceeding 500 million RMB in retail sales among domestic cosmetics groups [4] Sales and Distribution Model - The company primarily utilizes online platforms for sales while enhancing brand reach through offline channels, including online direct sales and distribution [5] - Proya is one of the earliest beauty groups to strategically develop online channels, achieving a significant leading position in this area [5] Production Capacity - As of October 24, 2025, Proya operates a production base in Huzhou, Zhejiang, with 66 production lines dedicated to skincare products [5] - The company is also constructing a smart factory in Huzhou, designed to have a production capacity of 400 million units [5] Financial Performance - Proya's revenue for the six months ending June 30 for the years 2022 to 2025 is as follows: approximately 6.385 billion RMB in 2022, 8.905 billion RMB in 2023, 10.778 billion RMB in 2024, and 5.362 billion RMB in 2025 [6][7] - The corresponding net profit figures for the same periods are approximately 831 million RMB in 2022, 1.231 billion RMB in 2023, 1.585 billion RMB in 2024, and 826 million RMB in 2025 [6][7]