Core Viewpoint - The company Baiya Co., Ltd. is facing significant challenges following a scandal involving the alleged recycling of defective sanitary products, which has impacted its sales and investor confidence [1][2][5]. Group 1: Shareholder Actions - Baiya Co., Ltd. announced that three employee shareholding platforms plan to reduce their holdings by up to 2% of the company's total shares, equating to a maximum of 8.593 million shares [1]. - The reduction is attributed to the personal financial needs of the employees and will occur within three months after the announcement [1]. Group 2: Company Performance - Baiya Co., Ltd. reported a revenue of 3.254 billion yuan for 2024, a 51.8% increase year-on-year, and a net profit of 288 million yuan, up 20.7% from the previous year [1]. - Despite the growth, the company experienced a 92.92% decrease in net cash flow from operating activities in Q1 2025, amounting to 6.9107 million yuan [3]. - The company's revenue for the first half of the year was 1.764 billion yuan, a 15.12% increase year-on-year, with a net profit of 188 million yuan, up 4.64% [3][4]. Group 3: Impact of Scandal - The "recycling sanitary napkin" scandal led to a significant decline in the company's e-commerce channel revenue, which fell by 9.44% to 592 million yuan in the first half of the year [4]. - The gross margin for the e-commerce channel also decreased by 5.22 percentage points, resulting in a gross margin of 50.71%, the lowest among all channels [4]. - The company has increased its marketing expenses to 642 million yuan, an 18.76% rise, with promotional expenses alone reaching 464 million yuan, up 26.1% [4]. Group 4: Regulatory Response - Following the scandal, the Shenzhen Stock Exchange issued a letter of concern to Baiya Co., Ltd., requesting a self-examination and clarification regarding the procurement of substandard materials [2]. - Baiya Co., Ltd. responded by stating that it does not procure substandard raw materials and has ceased cooperation with waste disposal entities following the scandal [2].

Core Insights - The company reported a revenue of 1.764 billion yuan for the first half of 2025, representing a year-on-year growth of 15.1% [1] - The net profit attributable to the parent company reached 188 million yuan, an increase of 4.6% compared to the same period last year [1] Revenue Breakdown - The sanitary napkin segment generated revenue of 1.688 billion yuan, showing a year-on-year increase of 19.93% [1] - The diaper segment reported revenue of 38 million yuan, reflecting a decline of 34.03% year-on-year [1] - The ODM (Original Design Manufacturer) segment achieved revenue of 39 million yuan, down 43.08% compared to the previous year [1] Brand Portfolio - The company owns several brands including "Free Point" for sanitary napkins, "Good" for baby diapers, and "Danning" for adult incontinence products, all positioned in the mid-to-high-end market [1]

Core Viewpoint - Baiya Co., Ltd. is expected to see a net profit attributable to shareholders of 188 million yuan in the first half of 2025, representing a year-on-year growth of 4.64%, although the net profit for Q2 2025 is projected to decline by 25.50% year-on-year to 57 million yuan [1] Financial Performance - The net cash flow from operating activities for the first half of 2025 is estimated at 68 million yuan [1] - The company is focusing on optimizing its product structure, particularly in the sanitary napkin segment [1] Market Strategy - The increase in sales expense ratio is attributed to the company's ongoing efforts in brand building and channel expansion, which includes enhanced market promotion and brand advertising to boost brand influence [1] - Baiya Co., Ltd. has a significant online competitive advantage with its "Free Point" brand, which is experiencing rapid growth in the core sanitary napkin category [1] Future Outlook - Given the company's position as a leader in personal care and the current effectiveness of channel reforms, there is potential for faster earnings growth, leading to a maintained "Buy" rating [1]

Core Insights - Baiya Co., Ltd. (003006.SZ) reported a revenue of 1.764 billion yuan for the first half of 2025, representing a year-on-year growth of 15.1% [1] - The net profit attributable to shareholders reached 188 million yuan, with a year-on-year increase of 4.6% [1] Product Line Performance - The core product line, Free Point products, showed strong performance with a revenue of 1.687 billion yuan, marking a year-on-year growth of 20.5% [1] - Health products, represented by probiotics and organic cotton series, experienced faster growth and continued to increase their revenue share [1] - Revenue from panty-type sanitary napkin products also saw rapid growth [1] Channel Performance - E-commerce channel revenue was 592 million yuan, reflecting a year-on-year decline of 9.4%, primarily due to short-term public sentiment impacts [1] - Offline channel performance remained robust, achieving a revenue of 1.133 billion yuan, which is a year-on-year increase of 39.8% [1] Expense Analysis - Sales expenses amounted to 642 million yuan, up 18.8% year-on-year, with the growth rate of expenses exceeding overall revenue growth [1] - The increase in expenses was attributed to additional budget allocations for brand and online platform investments due to public sentiment impacts [1]

Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Views - The company's mid-year performance is under pressure, with H1 2025 revenue at 1.764 billion yuan, a year-on-year increase of 15.12%, and net profit attributable to the parent company at 188 million yuan, a year-on-year increase of 4.64% [7] - The company is accelerating its offline national expansion, and e-commerce is expected to recover in the second half of the year, supported by an aggressive management team, indicating strong long-term growth potential [7] - E-commerce revenue faced short-term pressure, but internal operational strategy adjustments are expected to lead to recovery in the second half of 2025 [7] - Offline performance is strong, with steady growth in core provinces and accelerated national expansion, particularly in peripheral markets [7] - The product structure is continuously optimized and upgraded, focusing on health-related series, which is driving sales growth [7] Financial Data and Profit Forecast - Total revenue forecast for 2025 is 3.990 billion yuan, with a year-on-year growth rate of 22.6% [6] - Net profit attributable to the parent company for 2025 is projected at 365 million yuan, with a year-on-year growth rate of 26.9% [6] - Earnings per share for 2025 is expected to be 0.85 yuan [6] - The gross margin is projected to remain stable around 53.2% [6] - The return on equity (ROE) is expected to increase to 20.7% in 2025 [6] Performance Comparison - The company's stock price closed at 29.68 yuan, with a market capitalization of 12.72 billion yuan [2] - The stock has a price-to-earnings (PE) ratio of 35 for 2025, which is expected to decrease to 20 by 2027 [9]

Investment Rating - The investment rating for the company is "Buy" and is maintained [9]. Core Views - The company achieved revenue of 1.764 billion, net profit attributable to shareholders of 188 million, and net profit excluding non-recurring items of 182 million in H1 2025, representing year-on-year growth of 15%, 5%, and 6% respectively. In Q2 2025, the figures were 768 million, 57 million, and 53 million, showing a year-on-year change of +0.2%, -25%, and -28% respectively. The strong growth in peripheral provinces indicates robust growth potential, while e-commerce and core five provinces faced short-term disruptions. The decline in profitability in Q2 was mainly due to business structure and public sentiment impacts. Looking ahead, the company's fundamentals are expected to improve in H2, maintaining competitiveness in the offline market and benefiting from favorable trends for quality brands across all channels [2][6][12]. Revenue Analysis - In Q2, the core five provinces experienced a year-on-year decline of 2%, primarily due to base effects, while peripheral provinces saw a significant increase of 123%. E-commerce faced a decline of 24% due to short-term public sentiment issues and a weaker overall market during the 618 shopping festival. The product structure continues to improve, with the health product series gaining a larger share [12][12]. Profitability Analysis - The decline in Q2 profitability was mainly due to business structure and public sentiment impacts, with the net profit margin decreasing by 2.6 percentage points. The core five provinces, which contribute significantly to profits, saw a slight revenue decline, leading to an 18 percentage point drop in revenue contribution to 57%. The gross margin decreased by 1.3 percentage points, influenced by increased costs related to e-commerce warehousing. However, the comparable gross margin is expected to improve with ongoing product structure optimization [12][12]. Market Trends - Recent events, such as changes in brand ownership and issues faced by some e-commerce brands, indicate that the sanitary products market favors quality brands. Companies with strong supply chains and multi-channel strategies are expected to benefit [12]. Future Outlook - The fundamentals are expected to improve in H2, with continued competitiveness in the offline market. E-commerce performance is anticipated to recover, particularly on platforms like Douyin and Tmall, with new product launches planned. The core five provinces are expected to return to normal growth rates, and the profitability in peripheral markets is projected to recover. The company remains optimistic about its growth potential and profitability elasticity, with expected net profits of 360 million and 500 million for 2025 and 2026, respectively, corresponding to PE ratios of 35 and 25 times [12][12].

Summary of Baia Co., Ltd. Conference Call Company Overview - **Company**: Baia Co., Ltd. - **Industry**: Sanitary products, specifically focusing on women's hygiene products Key Points and Arguments 1. **Recovery in Revenue and Profit**: The most competitive period for online channels has passed, with expectations for revenue and profit to recover, primarily benefiting from L2 strategy optimization and policy restrictions on irrational traffic investments. The months of May and June are seen as clear low points, with July and August showing recovery in GMV on Douyin [2][5] 2. **Dominance of Offline Channels**: Offline channels remain the primary driver for Baia, with the Free Point brand expanding rapidly in peripheral provinces. The first half of the year is expected to see a doubling in growth, and as fixed costs are amortized, profit increases will be non-linear, with key provinces likely to reach profitability inflection points [2][6] 3. **Emergence of Instant Retail**: Baia has positioned itself early in the instant retail space, offering competitive pricing and higher delivery efficiency compared to Douyin. The recovery in e-commerce data combined with strong performance in offline peripheral provinces should be closely monitored for future growth [2][6] 4. **Shift in Growth Strategy**: The company is transitioning from rapid market share growth to enhancing operational quality, leveraging online L2 strategy optimization and new instant retail channels to drive performance growth. The growth cycle of the company is expected to continue [2][7] 5. **Product Strategy and Impact**: In May 2023, Baia launched a probiotic series priced at 1 to 1.2 yuan, which significantly boosted performance and initiated a cycle of large single products. This followed the introduction of a health series in late 2022, which had mixed results due to higher pricing [2][7] 6. **Financial Performance**: Since the second half of 2022, Baia has seen a turning point in performance, with revenue growth of 33% in 2023 and projected 52% in 2024. Despite increased advertising and fixed costs, profit growth remains above 20%. ROE is expected to rise from 15% in 2022 to 20% in 2024, with gross margin increasing from 45% to 53% [4][8] 7. **Regional Market Performance**: Baia holds over 40% market share in the Sichuan-Chongqing region, with stable growth in Yunnan, Guizhou, and Shaanxi. Significant revenue growth is expected in peripheral provinces starting in the second half of 2024, continuing into the first half of 2025 [4][9] 8. **E-commerce and Offline Channel Dynamics**: E-commerce channels have achieved significant results through Douyin and Tmall, but future growth may stabilize at a reasonable range of 20%-30%. The importance of offline channels is increasing, with fixed costs being amortized as scale expands, gradually releasing profit potential [10] 9. **Competitive Advantages**: Baia's local brands, such as Free Point, have stronger offline management capabilities compared to foreign brands, which rely heavily on online channels. The company maintains a close ratio of distributors to sales personnel, enhancing control over terminal sales points and market share [11] 10. **Future Growth Prospects**: As the potential of probiotic products is realized, high-margin products will enhance distributor performance, attracting more distributors. After crossing the breakeven point in various provinces, profit margins are expected to rise rapidly, with projections for continued revenue and profit growth [12]

Core Insights - The personal care industry is experiencing a structural shift driven by rising national income and health demands, leading to market expansion and increased market share for domestic brands due to national confidence and technological innovation [1][2] Group 1: Industry Trends - The personal care sector is undergoing a structural transformation, with online development and technological breakthroughs providing growth certainty [1][2] - The overall growth rate of the personal care industry is slowing, with a projected market size of 2,925 billion yuan in 2024, reflecting a CAGR of 5.52% from 2010 to 2024 [3] - The online sales of personal care products are significantly increasing, with Douyin's GMV expected to reach 41.178 billion yuan in 2024, showing a year-on-year growth of 38.86% [1][3] Group 2: Competitive Landscape - Domestic white-label and emerging brands are rapidly gaining market share, forcing traditional offline leaders to reassess their survival strategies [2] - The competition is intensifying as traditional personal care brands must invest deeply in online operations to adapt to the changing market dynamics [2] - The future competition in the personal care industry will hinge on the combination of "overall operational efficiency and the height of technological barriers" [2][4] Group 3: Key Players and Innovations - Companies like Dengkang Oral Care are leveraging patented technologies to capture significant market shares, with their product Cold Acid Spirit holding 64.72% of the anti-sensitivity market [4] - LaFang JiaHua has seen a dramatic increase in GMV on Douyin, with a year-on-year growth of 1,033.89% in Q1 2025, driven by marketing strategies and technological upgrades [4] - Brands with strong patent portfolios and operational capabilities are expected to lead the restructuring of the market [4]

Group 1 - The stock price of Baiya Co., Ltd. closed at 26.97 yuan on July 29, 2025, down 1.21% from the previous trading day [1] - The trading volume for the day was 74,800 lots, with a transaction amount of 203 million yuan, and the price fluctuation was 5.20% [1] - Baiya Co., Ltd. primarily engages in the research, development, production, and sales of personal hygiene care products, including sanitary napkins and diapers [1] Group 2 - The company owns well-known brands such as "Free Point" and has a business presence across multiple regions in the country [1] - Recently, the company indicated on its investor interaction platform that it has a small amount of export business and will focus on leveraging its advantages to deepen its core market [1] - The company emphasized that consumer health and safety are its top priorities, and product quality strictly adheres to national standards [1] Group 3 - On July 29, Baiya Co., Ltd. experienced a net outflow of main funds amounting to 3.8974 million yuan, accounting for 0.03% of its circulating market value [1]

Core Viewpoint - The company emphasizes the importance of consumer health and safety, ensuring product quality adheres to national standards while focusing on brand building and channel expansion to serve more users with reliable products [1] Group 1 - The company prioritizes consumer health and safety [1] - Product quality is strictly in accordance with national standards [1] - Future plans include strengthening brand construction and expanding distribution channels [1]