Summary of the Conference Call for Meili Tianyuan Company Overview - **Company**: Meili Tianyuan - **Industry**: Beauty and Health Services Key Financial Performance - **Revenue**: 14.59 billion RMB in H1 2025, up 28.2% YoY [2][3][18] - **Net Profit**: 1.7 billion RMB, a 35% increase YoY [2][3][18] - **Adjusted Net Profit Margin**: 13%, a historical high [3][18] - **Gross Margin**: Increased to 49.3%, up 2.3 percentage points YoY [3][18] - **Customer Metrics**: - Store traffic: 920,000, up 48% YoY [3] - Active members: 120,000, up 47% YoY [3] Business Model and Strategy - **Innovative Model**: Introduced the "Double Beauty Plus Double Health" model, integrating beauty and health services to maximize customer value [2][5] - **Customer Acquisition**: - Private domain operations contributed over 46% of new members, reducing customer acquisition costs [4][10] - Plans to engage members as brand ambassadors to enhance brand visibility [4][10] - **Long-term Shareholder Returns**: Committed to distributing at least 50% of net profit for dividends over the next three years [4][16] Acquisition and Integration - **Acquisition of Nairui**: - Revenue from Nairui reached 2.77 billion RMB in H1 2025, with adjusted net profit margin rising from 6.5% to 10.4% [6][26] - Increased ownership in Nairui to 90% and plans for AI digital transformation [6][26] Market Trends and Consumer Behavior - **Emotional Economy**: The emotional economy market is projected to reach 23 trillion RMB by 2025 and exceed 45 trillion RMB by 2029 [2][8] - **Target Demographic**: Focus on high-end female clientele in major cities, combining technology-driven skincare with immersive wellness experiences [2][8] Future Growth Strategy - **Core City Focus**: Continued emphasis on high-line cities, with 57% of stores located in major urban areas [22] - **Revenue Growth**: Targeting revenue growth from 1 billion to 2 billion RMB in key cities [22][24] - **Operational Efficiency**: Plans to enhance efficiency while maintaining rapid revenue growth through improved supply chain and digital capabilities [24] Membership and Customer Engagement - **Membership Growth**: Active membership increased by 46%, with average spending per member at 6,200 RMB [20][21] - **High-Value Customer Engagement**: 91% of revenue derived from active members, indicating strong customer loyalty [20][21] Industry Outlook - **Market Potential**: The beauty and health industry is projected to grow significantly, particularly in major urban centers where wealth and population are concentrated [19] Conclusion - **Market Positioning**: Meili Tianyuan is well-positioned to capitalize on market trends and consumer demands, with a robust growth strategy and innovative business model aimed at enhancing shareholder value and customer satisfaction [24][27]