Group 1 - The company identified its competitors in the sunscreen sector as BASF and DSM [1] - In the personal care product segment, the company faces competition from Ajinomoto, Clariant, and Tianqi Materials [1]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company is currently facing performance pressure due to a cyclical bottom, with expectations for new products ramping up and a recovery in profitability [3][4] - In H1 2025, the company reported revenue of 720 million yuan, a year-on-year decline of 48.7%, and a net profit attributable to shareholders of 65.3 million yuan, down 84.5% year-on-year [3][4] - The decline in revenue is attributed to a slowdown in market demand for sunscreen agents, inventory digestion by downstream customers, and increased market competition leading to price reductions [3][4] - The company has adjusted its profit forecast for 2025-2027, expecting net profits of 240 million, 350 million, and 470 million yuan respectively, with year-on-year changes of -57.2%, +47.1%, and +32.3% [3][4] Financial Performance - In H1 2025, the company's revenue from cosmetic active ingredients, synthetic fragrances, and others was 540 million, 160 million, and 12 million yuan respectively, with year-on-year changes of -54.8%, -14.3%, and +24.5% [4] - The gross profit margin for these segments was 35.3%, 22.2%, and 20.3%, with year-on-year changes of -17.1 percentage points, +0.04 percentage points, and +27.9 percentage points [4] - The company's overall gross margin and net margin for H1 2025 were 32.05% and 8.75%, down 15.8 percentage points and 21.24 percentage points year-on-year [5] Business Outlook - The company is in the process of ramping up new products and upgrading existing products, with a completed annual production capacity of 12,800 tons of amino acid surfactants and ongoing technical upgrades for carbomers [5] - The construction progress of a new project in Malaysia for sunscreen products has reached 48.55%, with expectations for smooth production ramp-up [5] - The company anticipates that the recovery of orders and improvement in capacity utilization will enhance profit levels in the future [4][5]

Core Insights - The global cosmetics raw materials market is experiencing intensified competition, with domestic companies beginning to change their historically weak positions [1] Group 1: Market Dynamics - International giants are responding to challenges such as the pandemic, tariff policies, and rising transportation costs through mergers, splits, and price increases [2] - The merger of DSM and Firmenich, along with Solvay's split of its cosmetics business to form Scentys, has reshuffled the rankings of the top 11 international cosmetics raw material suppliers [2][3] - Dow Chemical leads the market with a net sales of 31.53 billion yuan, followed by BASF and Evonik, with only these three companies surpassing the 20 billion yuan mark [3] Group 2: Performance Analysis - Among the top 11 suppliers, only three companies—Givaudan, DSM-Firmenich, and IFF—reported sales growth, while IFF's performance slightly declined by 0.3% [3][20] - Givaudan's fragrance and beauty segment saw a sales increase of 7% and an EBITDA rise of 5%, indicating strong performance in high-end fragrances and consumer products [7][8] - In contrast, DSM-Firmenich's fragrance and beauty segment experienced a sales drop of 1% and a significant EBITDA decline of 4%, marking the first decline since the merger [10][12] Group 3: Challenges and Strategic Adjustments - The cosmetics raw materials giants are facing a downturn in performance due to various factors, including geopolitical tensions, macroeconomic uncertainties, and increased compliance costs [43][44] - Companies are implementing strategic adjustments such as optimizing business portfolios, workforce reductions, and restructuring to enhance operational efficiency [38][40] - The market is witnessing a shift where reliance on scale-based cost advantages is becoming less sustainable, necessitating differentiation through regulatory compliance and supply chain resilience [43][44]

Core Insights - The report released by the China Fragrance and Cosmetic Industry Association highlights the top 30 cosmetic raw material companies for 2024, emphasizing the importance of raw material innovation in the cosmetics industry [2][5][33] Market Overview - The scale of the Chinese cosmetic raw material market is approximately 644.29 billion yuan for 2024, exhibiting high market concentration with the top 5 companies accounting for 23.9% of the total market revenue [7][8] - The revenue of the top 10 companies reaches 240.07 billion yuan, representing 37.26% of the market, while the top 30 companies generate 354.53 billion yuan, which is 55.03% of the total market [8] Competitive Landscape - The average revenue of the top 10 companies is 24.01 billion yuan, while the average revenue for companies ranked 11-30 drops to 5.72 billion yuan, only one-fourth of the top companies [9] - Foreign companies dominate the top market, with foreign firms in the top 30 generating a total revenue of 205.47 billion yuan, accounting for 57.96% of the total revenue of these companies [10] Trends in the Industry - Chinese companies are making breakthroughs in specific segments, with notable examples including Huaxi Biological, Nanjing Kexin, and Guangzhou Tianci, which are leading in their respective fields [13] - High-value active ingredients are becoming the focal point of market competition, as consumers increasingly prioritize the efficacy of cosmetic products [14] - The trend of domestic substitution is becoming irreversible, with Chinese cosmetic raw material companies gradually replacing imported materials [15] Evaluation Methodology - The evaluation system for the market position of cosmetic raw material companies includes three main dimensions: financial performance (50% weight), innovation capability (40% weight), and ESG performance (10% weight) [17][18] - The financial performance metric focuses solely on revenue from cosmetic raw materials, excluding income from other related products [17] - The innovation capability assessment includes R&D investment, patent quantity and quality, and new material development, with a significant emphasis on R&D spending [19][21] Research Process - The research involved extensive data collection from over a hundred companies, ensuring the accuracy and reliability of the results through a four-tier data verification mechanism [29][30] - The initiative aims to promote brand awareness across the entire supply chain, emphasizing the importance of long-term value creation rather than just sales figures [32][33]

Core Viewpoint - The company's performance has been under pressure due to slowing demand and increased competition, leading to a decline in revenue and net profit for 2024 and Q1 2025 [1][2][3] Financial Performance - In 2024, the company achieved revenue of 2.276 billion (yoy -5.16%) and a net profit of 562 million (yoy -23.33%) [1] - For Q1 2025, revenue was 397 million (yoy -44.29%) and net profit was 48 million (yoy -78.15%) [1] - The gross margin and net profit margin for 2024 decreased by 4.4 percentage points and 5.9 percentage points to 44.4% and 24.7%, respectively [1] - In Q1 2025, gross margin and net profit margin further declined by 13.8 percentage points and 18.8 percentage points to 34.0% and 12.1%, respectively [1] - Operating cash flow for 2024 was 823 million (yoy +3.08%), while Q1 2025 saw a negative operating cash flow of 12 million (yoy -107.36%) [1] Segment Performance - The cosmetics active ingredients and their raw materials segment generated revenue of 1.904 billion (yoy -8.05%), while synthetic fragrances achieved revenue of 352 million (yoy +14.16%) [2] - The gross margins for cosmetics active ingredients and synthetic fragrances were 49.22% and 20.80%, reflecting declines of 3.84 percentage points and 2.80 percentage points, respectively [2] - The company primarily relies on overseas sales, which accounted for 1.98 billion (yoy -8.30%) in 2024, while domestic sales reached 297 million (yoy +22.87%) [2] Strategic Response - In response to market challenges, the company is focusing on consolidating its leading position in the sunscreen sector, accelerating new product market breakthroughs, and increasing investment in formulation and application research [2] - The company is also enhancing its management systems and processes to improve operational efficiency and cost control, while advancing the construction of its overseas production base in Malaysia [2] Earnings Forecast and Investment Recommendation - The company is projected to have revenues of 2.06 billion, 2.26 billion, and 2.45 billion for 2025, 2026, and 2027, respectively, with net profits of 410 million, 490 million, and 560 million [3] - The current market capitalization corresponds to a PE ratio of 15X for 2026, maintaining a "buy" rating [3]

增长引擎和消费偏好改变 近日，标普全球商品洞察特种化学品更新计划(SCUP)发布的《化妆品化学品报告》显示，全球化妆品 行业持续扩张，预计未来5年化妆品用化学品需求将以年均3.2%的速度增长。报告指出，随着行业发 展，新的增长引擎和不断变化的消费者偏好正在重塑化妆品用化学品供应商的竞争格局。 从配方成分来看，化妆品用化学品的核心趋势正朝着更天然、可生物降解和可持续的成分转型。消费者 对环保产品的需求推动制造商从传统烃基和有机硅成分转向植物油、脂肪酸衍生物和天然胶质等替代 品。这一转变既响应了消费者价值观变化，也符合日趋严格的法规要求和非政府组织的监督压力。 化妆品用化学品行业还积极采用多功能成分，使配方开发者能够减少产品成分总数，并最大限度减少化 学防腐剂使用。这既符合监管要求，又契合消费者对"更洁净"成分表的偏好。润肤剂和表面活性剂构成 化妆品用化学品用量主体，目前这类产品多数源自植物油和脂肪酸，石油基产品仅限用于天然替代品尚 无法匹敌性能的细分领域。其他重要成分包括增稠剂、防晒剂、护发素、着色剂、粉体、防腐抗氧化剂 及活性成分。值得注意的是，随着人们对紫外线健康风险意识增强，防晒剂需求正快速增长。 护肤仍 ...

Group 1 - The latest stock price of Kosi Co., Ltd. is 15.45 yuan, reflecting an increase of 1.31% compared to the previous trading day [1] - The trading volume for the day reached 1.06 billion yuan, with a total of 69,241 hands traded [1] - Kosi Co., Ltd. specializes in the research, production, and sales of active ingredients and raw materials for cosmetics, including categories such as sunscreen agents and whitening agents [1] Group 2 - The company provides raw material products to many well-known global cosmetics enterprises [1] - On the capital flow front, the net outflow of main funds for Kosi Co., Ltd. on that day was 531,000 yuan, with a cumulative net outflow of 2.21 million yuan over the past five days [1]

Core Viewpoint - The company is facing challenges in the sunscreen market due to slowing demand, increased competition, and adverse weather conditions affecting sales, leading to a decline in performance and pricing adjustments [2][5]. Group 1: Performance Decline and Response Strategies - Starting in the second half of 2024, the sunscreen market demand is expected to slow down, leading to a decrease in the shipment volume of sunscreen agents and a subsequent price reduction [2]. - The increase in inventory at the end of the reporting period is attributed to stockpiling of certain products, while new production lines are still ramping up capacity [2]. - In Q1 2025, the performance decline is expected to worsen due to increased rainy weather in Europe and North America, which negatively impacts the sales of sunscreen products and reduces downstream purchasing demand [2]. - The company is focusing on consolidating its leading position in sunscreen agents, advancing new product breakthroughs, and enhancing research investment in formulations [2]. - Additionally, the company aims to improve its management system, operational efficiency, and cost control while accelerating the construction of overseas bases [2]. Group 2: Market Expansion in Personal Care Ingredients - In Q3 2023, the company successfully launched 12,800 tons/year of amino acid surfactants and 3,000 tons/year of the new anti-dandruff agent pyrithione ethanolamine salt (PO), with initial results in customer certification and promotion [3]. - The company plans to strengthen market development by providing customized solutions to ensure project efficiency and effectiveness [3]. Group 3: Capacity Utilization and Market Competitiveness - The overall capacity utilization rate for cosmetic active ingredients and their raw materials in 2024 is affected by the ramp-up of new production lines [4]. - The company is a major global manufacturer of sunscreen agents, holding over 20% market share, with strong competitiveness in sunscreen and synthetic fragrance sectors [4]. - Core competitive advantages include a rich product structure, innovative R&D, optimized production and quality management, and collaboration with high-quality customers [4]. Group 4: Industry Outlook and Overseas Factory Progress - The global personal care products industry is stabilizing, with intensified competition in the sunscreen market, yet the overall market potential remains significant [5]. - Leading raw material manufacturers with comprehensive systems, international layouts, and stable supply capabilities are expected to further strengthen their advantages [5]. - The construction of the company's personal care products production base in Malaysia is progressing well, with product launches expected in the second half of this year [6]. Group 5: Product Pricing Strategy - The company states that the prices of its main products will follow market trends, and future adjustments will consider overall market conditions [7].

Group 1: Performance Overview - The company's performance decline is attributed to price reductions in sunscreen agents due to decreased market demand and increased competition [3][4] - In Q1 2025, the decline in performance is expected to continue, influenced by adverse weather conditions in Europe and North America, leading to lower sales during the peak season [4] - The gross profit margin of the main business has decreased, impacting net profit and earnings per share [4] Group 2: Market and Product Development - The company has a production capacity of 12,800 tons/year for amino acid surfactants and 3,000 tons/year for the new anti-dandruff agent, which have been successfully launched [5][6] - The sunscreen product market share exceeds 20% globally, with the company being a leading manufacturer in this sector [6] - The company is focusing on enhancing market development and providing customized solutions to downstream clients [5][6] Group 3: Strategic Responses - To counteract market fluctuations, the company is concentrating resources to maintain its leading position in sunscreen agents and is investing in research and development [4] - The management system and processes are being improved to enhance operational efficiency and cost control [4] - The company is also accelerating the construction of overseas bases to strengthen its risk management capabilities [4] Group 4: Future Outlook - The global personal care market is expected to grow steadily, with sunscreen and hair care products remaining high-demand categories [6] - The company is building a personal care production base in Malaysia, with products expected to be launched in the second half of the year [7] - Future price adjustments for products will depend on market supply and demand, costs, and the company's strategic development [8]

Group 1 - The global sunscreen market is entering an adjustment period in 2024, and the company, as an industry leader, is facing significant challenges with a year-on-year revenue decline of 5.16% and a net profit drop of 23.33% [1] - The structural decline in the sunscreen business is attributed to over-reliance on this core category, which contributes over 85% of revenue, facing a market demand inflection point in 2024 due to prolonged inventory digestion and competitive pricing pressures [2] - The company is experiencing a severe mismatch between production plans and market demand, with inventory levels increasing by 47.96% year-on-year, leading to deteriorating inventory turnover days [3] Group 2 - The strategic choices made by the company have exacerbated operational risks, including a significant increase in fixed assets and the construction of new capacity in Malaysia facing overcapacity risks before even being operational [3] - The company maintains a high dividend policy of 3 yuan per 10 shares, which is seen as a near-overdrawn approach given the halved net profit, further weakening the funds available for technological innovation [3] - To navigate its current predicament, the company needs to accelerate inventory liquidation and reduce non-core capacity investments in the short term, while redefining its competitive advantages in the long term through technological innovation and extending into high-value downstream products [4]