Core Viewpoint - The article discusses the challenges faced by Mingchen Health, the parent company of the hair care brand "Tihua Zhi Xiu," as it transitions from a focus on daily chemical products to the gaming industry, highlighting the impact of competition and strategic shifts on its performance [2][3][4]. Group 1: Company Background - Mingchen Health, established in 1994 and listed in December 2017, initially focused on daily chemical products, including shampoos and conditioners, with brands like Tihua Zhi Xiu and Meiwang [3]. - The company has recently adopted a dual business model of "daily chemicals + gaming," which raises questions about the appropriateness of this strategic shift [3][4]. Group 2: Financial Performance - In the peak year of 2017, Mingchen Health reported revenues of 642 million yuan, which declined to 517 million yuan by 2019, indicating a downward trend in its daily chemical business [4]. - After entering the gaming sector, the company saw a revenue increase to 681 million yuan in 2020, a 31.52% year-on-year growth, and net profit surged to 102 million yuan, up 343.05% [5][6]. - Despite initial success in gaming, the financial outlook remains concerning due to rising costs and declining profit margins, with net profit showing fluctuations in subsequent years [6][7]. Group 3: Market Challenges - The daily chemical sector has become increasingly competitive, leading to a decline in Mingchen Health's market position and necessitating a pivot to gaming for growth [4][8]. - The company's focus on gaming has resulted in the daily chemical business becoming a "secondary" operation, contributing only 23.16% of total revenue in the first half of 2025 [8]. Group 4: Consumer Trends and Brand Positioning - Consumer expectations for hair care products have evolved, with a demand for natural and environmentally friendly options, while Tihua Zhi Xiu has struggled with brand and product aging [8][9]. - The rise of e-commerce and new brands has further pressured Mingchen Health, as it has not effectively adapted to these market changes [8][9]. Group 5: Future Outlook - The company must balance its dual business model to avoid further decline in its daily chemical segment, emphasizing the need for innovation and effective brand management [9][10]. - Successful revitalization of the brand and product offerings could determine Mingchen Health's future trajectory in both the daily chemical and gaming markets [10].

Core Viewpoint - Mingchen Health is undergoing a significant transformation by integrating its traditional personal care business with a burgeoning gaming sector, leading to increased market interest and stock performance [4][14]. Group 1: Company Overview - Mingchen Health, established in 1994 and listed on the Shenzhen Stock Exchange in December 2017, specializes in the research, production, and sales of personal health care products [4][5]. - The company has developed a multi-brand strategy, with notable brands like "Ti Hua Zhi Xiu" and "Mei Wang," and has over 40,000 sales outlets nationwide [4][5]. Group 2: Business Transformation - In 2020, Mingchen Health entered the gaming industry by acquiring two companies for a total of 2.62 billion yuan, marking the start of its "personal care + gaming" dual business model [5][6]. - The company has since established a complete gaming industry chain through acquisitions and the formation of a dedicated gaming division [6]. Group 3: Financial Performance - In 2022, the company reported total revenue of 945 million yuan and a net profit of 25.39 million yuan [10]. - By 2023, revenue surged to 1.64 billion yuan, with net profit reaching 70.36 million yuan, indicating a strong recovery [10]. - The gaming sector has become a crucial revenue driver, contributing 1.164 billion yuan in 2023, accounting for 71.09% of total revenue, surpassing the personal care segment for the first time [11]. Group 4: Recent Developments - On October 10, 2023, Mingchen Health's stock price hit a daily limit of 16.64 yuan, reflecting a 9.98% increase and a market capitalization of 4.435 billion yuan [4][14]. - The company has launched several successful mobile games and is collaborating with ByteDance for future game releases, enhancing its market position [15]. - Recent governance improvements and a clear three-year dividend plan, with a minimum cash dividend ratio of 20%, have bolstered investor confidence [16]. Group 5: Market Dynamics - The gaming sector has shown robust performance, contributing to a broader market rally in related stocks, which has positively influenced Mingchen Health's stock price [17]. - The company's technical indicators suggest strong upward momentum, supported by significant capital inflows [17].