Investment Rating - The report maintains an "Overweight" rating for the consumer discretionary and commercial trade sectors [7]. Core Insights - Several leading overseas beauty and luxury brands are experiencing a recovery in their business in China, with notable growth in Q3 2025 [1][2]. - The overall consumption in mainland China is expected to continue its gradual recovery, supported by positive macroeconomic signals [1]. Summary by Sections Company Performance - LVMH's revenue in the Asia-Pacific region, excluding Japan, returned to positive growth after six consecutive quarters of decline, with Q3 2025 showing a recovery [1]. - L'Oréal's revenue in mainland China grew by approximately 3% year-on-year in Q3 2025, driven by a 4.7% increase in North Asia [2]. - Hermès reported strong growth in the Greater China region, while Estée Lauder achieved a 9% year-on-year increase in its China business [1][2]. - Unilever's business segments in China, excluding ice cream, also showed signs of recovery [1]. Channel Insights - Online channels have seen significant growth, with L'Oréal and Beiersdorf reporting year-on-year increases of 12% and 19.2% respectively in Q3 [3]. - Travel retail remains under pressure but has shown marginal improvements, with L'Oréal and Kering noting slight revenue recovery [3]. Category Insights - The medical aesthetics segment, particularly high-demand products like Sculptra, has seen a year-on-year revenue increase of 11.8% in Q3 2025 [4]. - Skin science skincare products, including brands like Cetaphil and Alastin, reported double-digit growth, contributing to a 9.3% year-on-year increase in the skincare segment [4]. - Fragrance categories also performed well, benefiting from new product launches by L'Oréal and LVMH [4]. Performance Guidance - Galderma has raised its full-year revenue growth guidance for FY25 to 17.0%-17.7%, up from a previous estimate of 10%-12% [5]. - Procter & Gamble expects a revenue growth rate of 1%-5% for FY26, maintaining its guidance for Q4 2025 [5]. - Unilever anticipates a potential sales growth rate of 3%-5% for FY25, with Q2 revenue growth expected to exceed that of H1 2025 [5].

Group 1 - The core viewpoint of the article highlights the rapid growth and international expansion of Chinese beauty brands, driven by cultural integration and technological innovation [2][3][4] - Chinese beauty products are expected to reach an export value of 51.2 billion yuan in 2024, with a year-on-year growth of 11.9% [3] - The collaboration between beauty brands and celebrities has surged, with first-day GMV exceeding 10 million yuan becoming a standard [4] Group 2 - The global beauty market is projected to reach 677 billion USD by 2025, with skincare leading at 180.3 billion USD, and China holding a 35% market share [9] - Domestic brands are increasingly entering the medical beauty sector, intensifying competition as they launch medical-grade products [5][13] - The rise of "Douyin brands" has changed consumer perceptions, with brands like BABI achieving significant sales through targeted marketing strategies [30] Group 3 - The beauty industry is witnessing a structural transformation, with a focus on rational consumption and the importance of cost-effectiveness [12] - The trend of cross-industry collaboration is evident as fast fashion brands like Zara and H&M venture into the beauty market due to declining apparel sales [8] - The emphasis on sustainability and ESG principles is becoming crucial for companies in the beauty sector, with examples like 诺斯贝尔 leading the way [21]