Investment Rating - The report assigns a "Buy" rating to the company, with a current price of 20.66 RMB and a fair value of 29.96 RMB [3]. Core Insights - The company is showing signs of a performance turnaround, with a focus on core brands and online growth, which is expected to enhance profitability [6]. - The company achieved a revenue of 6.32 billion RMB in 2025, representing a year-on-year growth of 11.3%, and a net profit of 268 million RMB, indicating a return to profitability [6]. - The report highlights the successful optimization of product structure, leading to an increase in gross margin by 5 percentage points to 62.6% [6]. Financial Forecast - Revenue projections for the company are as follows: - 2024: 5.679 billion RMB - 2025: 6.317 billion RMB - 2026: 7.216 billion RMB - 2027: 8.135 billion RMB - 2028: 9.054 billion RMB - The growth rates are projected to be -13.9% in 2024, followed by 11.2% in 2025, and continuing to grow at rates between 11.3% and 14.2% in subsequent years [2]. - EBITDA is expected to increase from 119 million RMB in 2024 to 999 million RMB in 2028 [2]. - The net profit is forecasted to recover from a loss of 833 million RMB in 2024 to a profit of 700 million RMB by 2028 [2]. Segment Performance - The company’s revenue by segment in 2025 is as follows: - Personal Care: 2.42 billion RMB, up 1.7% - Beauty: 1.61 billion RMB, up 53.7% - Innovation: 0.81 billion RMB, down 2.3% - Overseas: 1.47 billion RMB, up 3.9% [6]. - The gross margins for these segments are 65% for Personal Care, 74% for Beauty, 50% for Innovation, and 54% for Overseas, indicating strong profitability in the Beauty segment [6]. Online and Offline Growth - Online sales reached 2.66 billion RMB in 2025, with a year-on-year growth of 22% and a gross margin of 65.7% [6]. - Offline sales amounted to 3.65 billion RMB, with a growth of 5% and a gross margin of 60.3% [6]. Brand Development - The company is focusing on nurturing core brands and has successfully launched new products that have achieved significant sales, such as the mosquito repellent product under the "Liushen" brand and the "Yuze" brand's dry-sensitive cream [6]. - The "Baicaojiyu" brand has undergone a visual and channel overhaul, with significant sales growth on platforms like Douyin [6].

Group 1: Cooling Economy Trends - The "cooling economy" is gaining traction with innovative products and services driven by rising temperatures, aligning with policies aimed at boosting consumption [1][2] - Major brands like Midea, Xiaomi, and Haier saw over 200% increase in air conditioner sales during the "618" shopping festival, indicating strong consumer demand for cooling products [1] - Instant retail services are enhancing the delivery speed of cooling products, with Meituan offering 30-minute delivery for essential items [1] Group 2: Beverage Market Innovations - There is a growing demand for refreshing beverages, with new product launches from tea brands and the rise of homemade drinks [2] - Companies like Shanghai Jahwa and New Hope Liuhe are leveraging brand collaborations and product innovations to capture opportunities in the cooling economy [2] Group 3: Experience and Tourism Innovations - Tourist attractions are innovating experiences to cater to summer visitors, such as the "20-degree Ice Whale Watching Tour" at Shanghai Haichang Ocean Park, which has seen a fourfold increase in visitor numbers [2][3] - The trend of summer tourism is shifting towards experiential offerings, with a focus on integrating local culture and lifestyle into the tourism experience [3] Group 4: Policy Support for Consumption - Local governments are promoting summer consumption through initiatives like the "Colorful Summer" tourism season in Hubei, which includes various cooling experiences [3][4] - Night economy initiatives are being launched in cities like Shanghai and Shenzhen to stimulate consumption, featuring diverse nighttime activities [4][5] Group 5: Future Consumption Trends - The integration of sports and tourism is expected to drive summer consumption, with recommendations for developing diverse sports tourism products [5] - Analysts predict that new consumption avenues related to ready-to-drink beverages and sports events will continue to receive policy support, enhancing local economic growth [5]