Core Insights - The company achieved total operating revenue of 5.362 billion yuan in 25H1, representing a year-on-year growth of 7.21% [1] - Total profit reached 998 million yuan, with a year-on-year increase of 11.43% [1] - The net profit attributable to shareholders was 799 million yuan, reflecting a year-on-year growth of 13.8% [1] Revenue Breakdown - The main brand, Proya, generated revenue of 3.979 billion yuan, with a slight decline of 0.08% year-on-year, accounting for 74.3% of total revenue [1] - The sub-brand, Caitang, reported revenue of 705 million yuan, showing a growth of 21.1% year-on-year, contributing 13.2% to total revenue [1] - OR brand revenue surged to 279 million yuan, marking a significant increase of 102.5% year-on-year [1] - Other brands, including Yuefuti and Yuansheng Bota, also showed strong growth, with revenues of 166 million yuan (up 3.3%) and 97 million yuan (up 80.2%) respectively [1] Strategic Focus - The company is focused on creating a core product matrix in skincare, color cosmetics, and personal care, emphasizing consumer needs and scientific skincare [1] - OR brand is enhancing its image as an "Asian scalp health care expert" and expanding its product offerings to strengthen market penetration [1] - The introduction of seasonal limited fragrance wash series aims to build brand differentiation and enhance competitive advantage [1] Profitability and Cost Management - The gross profit margin improved by 3.6 percentage points to 73.4% due to cost reduction and efficiency improvements [2] - The sales expense ratio increased by 2.8 percentage points to 49.6%, primarily due to higher promotional expenses [2] - The net profit margin rose by 0.9 percentage points to 14.9%, driven by the increase in gross profit margin [2] Future Outlook - The company forecasts net profits of 1.79 billion, 1.99 billion, and 2.18 billion yuan for 2025-2027, with respective growth rates of 16%, 11%, and 9% [2] - The current price-to-earnings ratios are projected to be 19, 17, and 15 times for the same period [2] - The company's single product strategy is expected to significantly enhance brand value and operational efficiency [2]

Investment Rating - The investment rating for the company is "Buy" (maintained) [3] Core Views - The company achieved a 13.8% year-on-year growth in net profit attributable to shareholders in the first half of 2025, driven by strong brand momentum [3][6] - The company continues to develop a core product matrix, focusing on skincare, makeup, and personal care, with significant growth in its sub-brands [6] - The main brand, Proya, is innovating around consumer needs and has a clear growth path, supported by strong operational capabilities and management efficiency [6] Financial Performance Summary - In the first half of 2025, the company reported total revenue of 5.362 billion yuan, a year-on-year increase of 7.21%, and a total profit of 999.8 million yuan, up 11.43% [6] - The revenue breakdown shows Proya contributing 3.979 billion yuan (74.3% of total revenue), with significant growth in sub-brands such as OR, which saw a 102.5% increase in revenue [6] - The gross margin improved by 3.6 percentage points to 73.4%, attributed to cost reduction and efficiency improvements [6] Earnings Forecast and Valuation - The company is expected to achieve net profits of 1.793 billion yuan, 1.994 billion yuan, and 2.183 billion yuan for 2025, 2026, and 2027 respectively, with year-on-year growth rates of 15.54%, 11.17%, and 9% [5][6] - The current price-to-earnings (P/E) ratios for the upcoming years are projected to be 19, 17, and 15 [6][8]

Investment Rating - The report maintains a "Buy" rating for the company [7][5]. Core Views - The company achieved a revenue of 5.362 billion RMB in H1 2025, representing a year-on-year increase of 7.21%, with a net profit attributable to shareholders of 799 million RMB, up 13.8% year-on-year [1][5]. - The company plans to issue H shares to accelerate its internationalization strategy and enhance its overall competitiveness [1]. - Despite a slowdown in revenue growth for the main brand, other brands such as OR and 彩棠 showed significant growth, indicating a diversified performance across the brand portfolio [2][5]. Revenue Breakdown - In H1 2025, the main brand, 珀莱雅, generated revenue of 3.979 billion RMB, a slight decrease of 0.08% year-on-year, while 彩棠 saw a revenue increase of 21.11% to 705 million RMB [2]. - The online distribution channels outperformed, with online direct sales generating 3.905 billion RMB, up 4.87% year-on-year, and online distribution channels achieving 1.204 billion RMB, up 25.91% year-on-year [3]. Profitability Metrics - The company reported a gross margin of 73.38% in H1 2025, an increase of 3.56 percentage points year-on-year, while the sales expense ratio rose to 49.59%, reflecting increased promotional activities [4]. - In Q2 2025, the gross margin improved to 73.85%, with a net profit margin of 13.60%, indicating resilience despite a high base effect [1][4]. Earnings Forecast and Valuation - The forecast for net profit attributable to shareholders has been adjusted downwards by 3% for 2025 and 2026, and by 5% for 2027, resulting in projected profits of 1.741 billion RMB, 1.996 billion RMB, and 2.240 billion RMB respectively [5]. - The target price is set at 122.30 RMB, based on a price-to-earnings ratio of 28 times for 2025, reflecting a potential upside from the current market price [5][8].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 112.46 CNY [3][7]. Core Insights - The company reported better-than-expected earnings in Q1, with significant growth from emerging brands [1]. - Revenue and net profit for 2024 are projected to be 10.778 billion CNY and 1.552 billion CNY, respectively, reflecting year-on-year growth of 21% and 30% [6]. - The company is expected to continue expanding its brand portfolio and market share in various segments, including men's skincare and medical post-operative recovery [6]. Financial Projections - The adjusted earnings per share (EPS) forecasts for 2025-2027 are 4.56 CNY, 5.36 CNY, and 6.06 CNY, respectively [2][7]. - The company's revenue is projected to grow from 8.905 billion CNY in 2023 to 15.577 billion CNY in 2027, with a compound annual growth rate (CAGR) of approximately 10.7% [2][10]. - The gross margin is expected to improve from 69.9% in 2023 to 73.0% in 2027, indicating enhanced profitability [2][10]. Brand Performance - The main brand and the Cai Tang brand showed stable performance, while emerging brands like OR and Yuan Se Bo Ta experienced rapid growth, with revenue increases of 71.1% and 138.4%, respectively [6]. - Online sales channels grew by 23.7% in 2024, while offline channels saw a decline of 13.6% [6]. Market Position - The company demonstrated resilience in a challenging consumer environment, maintaining strong performance across its brand matrix [6]. - The report highlights the company's ability to adapt and thrive despite market pressures, positioning it as a leader in the industry [6].