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].

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, 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 creating a world-class cosmetics industry platform, offering high-quality and technologically advanced products [5] - The company ranks fifth among the top five groups in China's cosmetics industry by retail sales in 2024, being the only domestic cosmetics group in this category [5] - 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 [5] Product Portfolio - Proya has developed a diverse portfolio with multiple brands and categories, covering skincare, color cosmetics, and personal care [5] - The flagship brand, Proya, is notable for having two essence products each exceeding RMB 1 billion in retail sales, making it the only single brand in this category [5] - The company operates several brands, including skincare brands "Proya," "Yuefuti," and "Kruif," color cosmetics brand "Caitang," and personal care brand "Off&Relax" [5] Sales and Distribution - The company primarily utilizes online platforms for sales while enhancing brand reach through offline channels [6] - Proya is one of the earliest beauty groups to strategically develop online channels, achieving a significant leading position in this area [6] Production Capacity - As of October 24, 2025, Proya operates a production base in Huzhou, Zhejiang, with 66 production lines dedicated to skincare products [6] - A new smart factory is under construction in Huzhou, designed to have a production capacity of 400 million units [6] Financial Performance - Proya's revenue for the six months ending June 30 for the years 2022 to 2025 is as follows: RMB 6.385 billion in 2022, RMB 8.905 billion in 2023, RMB 10.778 billion in 2024, and RMB 5.362 billion in 2025 [8][9] - The corresponding profits for the same periods are approximately RMB 831 million in 2022, RMB 1.231 billion in 2023, RMB 1.585 billion in 2024, and RMB 826 million in 2025 [8][9]

Core Viewpoint - Proya plans to list its H-shares on the Hong Kong Stock Exchange to accelerate international expansion and enhance overseas financing capabilities, potentially becoming the first A+H share company in the beauty industry [1] Group 1: Company Overview - Proya primarily engages in the research, production, and sales of cosmetic products, owning brands such as "Proya," "Caitang," "Off&Relax," and others, covering various beauty sectors including skincare and makeup [1] - In the previous year, Proya was recognized as the most profitable domestic beauty company and became the first domestic beauty enterprise to enter the "100 billion club" [1] Group 2: Financial Performance - For the years 2021 to 2024, Proya's revenue figures were 4.633 billion, 6.386 billion, 8.905 billion, and 10.78 billion yuan, with year-on-year growth rates of 23.47%, 37.82%, 39.45%, and 21.04% respectively [1] - The net profit attributable to the parent company for the same period was 576 million, 817 million, 1.194 billion, and 1.552 billion yuan, with growth rates of 21.03%, 41.88%, 46.06%, and 30.00% respectively [1] Group 3: Recent Performance and Challenges - In the first half of this year, Proya reported revenue of 5.362 billion yuan, a year-on-year increase of 7.21%, and a net profit of 799 million yuan, reflecting a growth of 13.80%, marking the lowest growth rates in nearly five years [2] - The slowdown in growth is attributed to a decline in sales volume and unit prices in the skincare category, as well as a decrease in unit prices for beauty makeup products [2] - Sales expenses for the first half of the year amounted to 2.659 billion yuan, a year-on-year increase of 13.64%, accounting for 49.59% of total revenue, with promotional expenses rising to 2.399 billion yuan [2]

Investment Rating - The report maintains a "Positive" outlook on the beauty and personal care industry, highlighting the resilience of domestic brands and the impact of new consumption trends [2]. Core Insights - The beauty and personal care sector experienced a robust recovery in H1 2025, with a retail sales growth of 2.9%, reversing the previous decline due to favorable consumption policies and improved income expectations [5][6]. - Domestic brands are gaining market share, with top local brands now competing closely with international counterparts, indicating a significant shift in consumer preferences [10][11]. - The report categorizes companies into three groups based on performance: those with strong brand matrices benefiting from multi-brand strategies, those capitalizing on consumer trends like domestic brands and collagen products, and those showing signs of strategic improvement [20][23]. Summary by Sections Industry Overview - The beauty market is projected to grow steadily, with a forecasted retail sales decline of 1.1% in 2024, followed by a recovery in H2 2025 [5][6]. - The domestic market share is expected to increase, with local brands achieving significant breakthroughs in both skincare and makeup segments [10][11]. Company Performance - **Cosmetics Sector**: - Major companies like Up Beauty and Proya reported revenue growth of 17.3% and 7.2% respectively in H1 2025, with net profits increasing by 30.6% and 13.8% [20][21]. - Other notable performers include Marubi and Water Sheep, with revenue growth of 30.8% and 9.0% respectively [21][22]. - **Personal Care Sector**: - Companies like Ruibin and Zhenjia showed remarkable growth, with Ruibin's revenue increasing by 67.6% and Zhenjia's by 157.11% in H1 2025 [5][20]. - **Medical Aesthetics Sector**: - Companies like Aimeike and Langzi reported mixed results, with Aimeike's revenue declining by 21.6% while Langzi's net profit surged by 64.1% [20][24]. Investment Recommendations - The report recommends investing in companies with strong brand matrices and low PE multiples, such as Up Beauty and Proya, as well as those benefiting from the Douyin traffic boost like Marubi and Water Sheep [20][24]. - It also suggests focusing on high-value segments and innovative products from brands like Ruibin and Furuida, and highlights opportunities in the maternal and infant sector with companies like Shengbeila and Haiziwang [20][24].