Core Insights - Despite challenges faced by global beauty giants, Galderma has achieved significant growth and is on track to enter the top ten global beauty companies, with a projected net sales of approximately 32 billion RMB in 2024 [1][3]. Group 1: Company Performance - Galderma ranked 11th among global beauty companies in 2024, with net sales of approximately 32 billion RMB, just behind Puig Group [3]. - In the first three quarters of 2025, Galderma reported net sales of 3.737 billion USD (approximately 26.615 billion RMB), reflecting a year-on-year growth of 15% [3][11]. - The skin treatment segment showed the fastest growth, with net sales reaching 804 million USD in the first three quarters of 2025, a 40.4% increase year-on-year [11][31]. Group 2: Investment and Valuation - Galderma's valuation surged from over 50 billion RMB to over 340 billion RMB, marking an increase of over 500% since its sale by L'Oréal in 2014 [4][9]. - L'Oréal increased its stake in Galderma to 20% after acquiring an additional 10% in December 2025, following an earlier purchase in August 2024 [3][13]. Group 3: Business Structure and Strategy - Galderma operates a three-pronged business model encompassing pharmaceutical, aesthetic, and cosmetic sectors, creating a unique vertical integration in skin science [26]. - The company has established a strong presence in the aesthetic injection market, contributing over 50% of its revenue, with key products including hyaluronic acid fillers and botulinum toxin [14][27]. Group 4: Market Challenges - Despite its leading position in skin science, Galderma faces challenges in growth structure, with its aesthetic injection business showing signs of slowing growth [27][28]. - The company’s revenue heavily relies on the aesthetic segment, which accounted for approximately 51% of total revenue in the first half of 2025, but growth rates have declined compared to previous years [27][29]. Group 5: Future Outlook - Galderma aims to enhance its direct consumer engagement to convert its professional authority into brand loyalty among end consumers, which is crucial for its ambition to enter the top ten global beauty companies [37].

Investment Rating - The report indicates a weak performance in the cosmetics and medical beauty sector, with the Shenwan Beauty Care Index declining by 1.6% from December 5 to December 12, 2025, underperforming the market [3][4]. Core Insights - The cosmetics sector faced pressure in November, with overall GMV in the Taobao system showing weakness due to the pre-promotion of the Double 11 sales event and the rise of Douyin as a sales channel. Brands like Han Shu and Lin Qingxuan maintained stable GMV, while others like Feicui continued to grow significantly [3][9]. - The collagen medical beauty segment is expanding, with two new animal-derived collagen products approved for market entry, expected to drive growth in this area [3][9]. - The report highlights the leading market share of Minoxidil products from Mandi International in the hair loss treatment market, with a steady revenue growth from 982 million yuan in 2022 to approximately 1.455 billion yuan in 2024, reflecting a CAGR of 21.7% from 2022 to 2024 [10][11]. - L'Oréal's acquisition of an additional 10% stake in Galderma, raising its total ownership to 20%, signifies a strategic shift towards the medical beauty and skin health sectors, aiming to adapt to the slowing growth in the Chinese beauty market [3][18]. Summary by Sections Industry Performance - The Shenwan Beauty Care Index and its sub-indices for cosmetics and personal care products have shown declines of 1.2% and 1.7%, respectively, indicating underperformance compared to the Shenwan A Index [4][6]. Key Market Developments - The overall GMV for cosmetics in November was weak, influenced by earlier sales spikes in October and competition from Douyin [9]. - The approval of new collagen products is expected to enhance the supply side of the medical beauty market, with projections for continued expansion in 2026 [9][22]. Company Highlights - Mandi International has maintained a dominant position in the Minoxidil market, with its products accounting for approximately 57% and 71% of the market share in the hair loss treatment and Minoxidil categories, respectively, as of 2024 [11][13]. - The report notes that the Chinese consumer healthcare market is projected to grow from 931.3 billion yuan in 2018 to 16.42 trillion yuan by 2024, with significant growth in hair health and skin health segments [12][13].

Investment Rating - The report maintains a "Positive" outlook on the cosmetics and medical beauty industry, despite recent underperformance compared to the market [3][4]. Core Insights - The cosmetics and medical beauty sector has shown weaker performance, with the Shenwan Beauty Care Index declining by 1.6% from December 5 to December 12, 2025, underperforming the market [4][5]. - The report highlights that the November sales in the cosmetics sector were impacted by pre-Double 11 promotions and the rise of Douyin as a sales channel, leading to a weaker overall GMV [4][10]. - The collagen medical beauty segment is expanding, with two new animal-sourced collagen products approved for market, indicating growth potential in this area [4][10]. - The report emphasizes the strong market position of Mandi International in the minoxidil hair growth market, with a revenue increase from 982 million yuan in 2022 to approximately 1.455 billion yuan in 2024, reflecting a CAGR of 21.7% [4][11][12]. - L'Oréal's recent acquisition of an additional 10% stake in Galderma signifies a strategic shift towards medical aesthetics and skin health, aiming to adapt to the slowing growth in the Chinese beauty market [4][21]. Summary by Sections Industry Performance - The Shenwan Beauty Care Index decreased by 1.6%, with the Shenwan Cosmetics Index down by 1.2% and the Shenwan Personal Care Index down by 1.7% during the specified period [4][5]. - Notable stock performances included Water Sheep Co. (+5.9%) and Jinsong New Materials (+4.3%), while Hongmian Co. (-10.6%) and Juzhi Biological (-8.4%) faced significant declines [7]. Market Trends - The overall GMV for cosmetics in November was weak, influenced by the earlier sales surge in October and the emergence of Douyin as a competitive sales platform [4][10]. - The report notes that brands like Han Shu and Lin Qingxuan maintained stable GMV, while brands like Feicui continued to experience high growth [4][10]. Company Highlights - Mandi International has established a leading position in the minoxidil market, with a market share of approximately 57% in the hair loss treatment sector and 71% in the minoxidil product market as of 2024 [4][15]. - The company has shown consistent revenue growth, with a net profit increase from 2022 to the first half of 2025, indicating a robust business model [4][12][15]. Investment Recommendations - The report recommends focusing on companies with strong product lines and high profitability in the medical beauty sector, such as Ai Meike, while also suggesting attention to companies like Langzi Co. and Ru Yi Chen [4][10].