Group 1: Industry Overview - The cosmetics retail sales in China grew by 3.9% year-on-year from January to September 2025, slightly underperforming the overall retail market by 0.6 percentage points, indicating a stable demand environment [4][14]. - Online platforms like Tmall and Douyin are experiencing a shift, with Tmall showing signs of recovery due to flash sales and member subsidies, while Douyin's growth has slightly slowed down [17][20]. - The demand for high-end and cost-effective products is increasing, while the mid-range segment is facing pressure due to a more conservative consumer environment [5][41]. Group 2: Competitive Landscape - The trend of domestic brands replacing foreign ones is slowing down, with leading foreign brands like L'Oréal and Estée Lauder showing signs of recovery in the Chinese market [23][24]. - The growth of domestic brands is becoming more differentiated, with some brands like Proya and Shiseido experiencing declines, while others like Youngor and Shanghai Jahwa continue to grow [23][24]. - The industry is witnessing an acceleration in the multi-brand matrix among leading companies, which is expected to increase market concentration [27][28]. Group 3: Key Companies - The report highlights several companies with strong growth potential, including Ruya Chen, Shumei Co., and Maogeping, which are expected to benefit from their brand strength and market positioning [3][54]. - Companies like Dekang Oral Care and Shanghai Jahwa are noted for their stable fundamentals and potential for marginal improvement, while others like Jinbo Biological and Huaxi Biological are anticipated to reach turning points [54]. - Ruya Chen's self-owned brand, Zhenjia, has shown significant growth, with a revenue increase of 345% year-on-year in Q3 2025, indicating strong brand development capabilities [60].

Market Overview - The major stock indices in Shanghai and Shenzhen opened lower on May 16, with the Shanghai Composite Index experiencing a decline after initial fluctuations, while the Shenzhen Component and ChiNext indices showed wider fluctuations after filling gaps [1] - The Shanghai Composite Index closed at 3367.46 points, down 0.40%, with a trading volume of approximately 435.6 billion yuan; the Shenzhen Component closed at 10179.60 points, down 0.07%, with a trading volume of about 653.9 billion yuan; the ChiNext Index closed at 2039.45 points, down 0.19%, with a trading volume of around 298.5 billion yuan [1] Sector Performance - The PEEK materials sector and controllable nuclear fusion sector saw significant gains in the morning session, although the gains narrowed during the day, remaining among the top performers [1] - Other sectors that experienced notable increases included COVID-19 drug concepts, automotive parts, integrated die-casting, and cultivated diamonds, while sectors such as chemical fibers, warehousing logistics, and seed industry faced larger declines [1] Institutional Insights - According to Jifeng Investment Advisory, the A-share market is gradually finding a bottom with medium to long-term investment opportunities, driven by a series of counter-cyclical adjustment policies [2] - Guoyuan Securities noted that the "618" shopping festival has seen a shift in pre-sale periods, with platforms like Tmall and JD.com simplifying mechanisms and increasing subsidies, leading to strong performances from domestic products [2] - Guojin Securities highlighted that financial technology companies are actively seeking growth points in areas such as AI and overseas expansion, with a positive outlook for C-end stock trading software companies as market activity remains robust [2] Policy Developments - The Ministry of Commerce held a meeting on May 15 to promote the optimization of the departure tax refund policy, emphasizing its role in boosting consumption and responding to external shocks [3] - The State-owned Assets Supervision and Administration Commission (SASAC) announced a meeting to discuss further deepening the reform of state-owned enterprises, focusing on high-quality completion of reform actions by 2025 [4]