Core Insights - The domestic beauty industry in China is entering a phase of deeper development, with market competition shifting from channel expansion to R&D innovation and precise positioning [1][3]. Company Performance - In the first half of 2025, domestic beauty companies showed significant performance differentiation. Shanghai Jahwa achieved revenue of 3.48 billion yuan, a year-on-year increase of 4.7%, and a net profit of 270 million yuan, up 11.7% [3]. - Marubi Biotech reported revenue of 1.769 billion yuan, a 30.83% increase, with a net profit of 186 million yuan, up 5.21%. The company focused on a big product strategy [3]. - Up Beauty Holdings projected revenue between 4.09 billion and 4.11 billion yuan, a year-on-year growth of 16.8% to 17.3%, with net profit expected to reach between 540 million and 560 million yuan, up 30.9% to 35.8% [3]. - Beitaini has not yet released its semi-annual report, but its Q1 revenue was 949 million yuan, down 13.51%, with a net profit of 28.34 million yuan, down 83.97% [4]. Market Trends - The market for functional skincare products in China is projected to reach approximately 48.743 billion yuan in 2024, with Beitaini holding an 11.71% market share [5]. - The sensitive skin market is becoming a hot sector, with consumer numbers expected to approach 100 million and a market size of around 45 billion yuan in 2024, reflecting a compound annual growth rate of 21.7% over the past three years [7]. - The demand for sensitive skin care is evolving, with consumers seeking products that offer multiple benefits beyond basic repair, such as whitening and anti-aging [7]. Technological Challenges - The sensitive skin market faces core technological bottlenecks, particularly in the area of whitening products, which often struggle to balance effectiveness and gentleness for sensitive skin [8]. - Companies like Ximu Yuan are focusing on R&D in sensitive skin whitening, with new ingredients aimed at addressing these challenges, although large-scale application remains difficult [8]. Competitive Landscape - The competition in the sensitive skin market has shifted from initial market entry to a deeper technological contest, where brands must address advanced needs like whitening and anti-aging while ensuring scientific validation [9].

Core Insights - The domestic beauty industry in China is entering a phase of deeper development, with market competition shifting from channel expansion to R&D innovation and precise positioning [1][2] - The performance of domestic beauty companies shows significant divergence, reflecting the competitive landscape and the impact of consumer awareness and purchasing power on functional skincare products [1][3] Company Performance - Shanghai Jahwa reported revenue of 3.48 billion yuan, a year-on-year increase of 4.7%, and a net profit of 270 million yuan, up 11.7% [2] - Marubi achieved revenue of 1.769 billion yuan, a 30.83% increase, with a net profit of 186 million yuan, growing by 5.21% [2] - Up Beauty Holdings expects revenue between 4.09 billion and 4.11 billion yuan, a growth of 16.8% to 17.3%, with net profit projected between 540 million and 560 million yuan, an increase of 30.9% to 35.8% [2] Market Trends - The functional skincare market in China is projected to reach approximately 48.743 billion yuan in 2024, with Betaini holding an 11.71% market share at 5.707 billion yuan [3] - The sensitive skin market is becoming a hot sector, with an expected consumer base nearing 100 million and a market size of around 45 billion yuan, reflecting a compound annual growth rate of 21.7% over the past three years [4] Innovation and Consumer Demand - There is a growing emphasis on "skin-specific care" rather than a one-size-fits-all approach, with brands focusing on personalized solutions for different skin types [5] - The sensitive skin market faces challenges in achieving effective and gentle whitening solutions, as traditional ingredients often irritate sensitive skin [5] - Brands that can address advanced needs such as whitening and anti-aging while ensuring scientific validation will be better positioned to capture market share in this expanding sector [5]

Core Viewpoint - The new consumption sector in the Hong Kong stock market has shown strong performance in the first half of the year, with several companies reporting significant profit growth, leading to renewed optimism from investment institutions regarding the sector's future trajectory [1][6]. Group 1: Company Performance - Hong Kong-listed company Mao Geping expects a net profit of 665 million to 675 million yuan for the first half of the year, representing a year-on-year growth of 35% to 37% [1][4]. - Pop Mart announced a net profit growth of no less than 350% for the first half of the year, driven by increased global brand recognition and diverse product offerings [3][6]. - Lao Pu Gold anticipates a net profit increase of 279% to 288%, with expected revenues between 12 billion to 12.5 billion yuan, reflecting a year-on-year growth of 241% to 255% [3][4]. - Up Beauty expects a revenue of 4.09 billion to 4.11 billion yuan, with a profit growth of 30.9% to 35.8% [4][6]. - The food and beverage sector, represented by Guoquan, reported a revenue of 3.24 billion yuan, with a net profit growth of 122.5% [5][6]. Group 2: Market Trends and Analyst Insights - The new consumption sector has seen a surge in stock prices, with Lao Pu Gold up 220.12%, Pop Mart up 200.17%, and Up Beauty up 170.65% from January 1 to August 13 [2][6]. - Analysts express optimism about the new consumption sector, citing a shift in consumer preferences towards experiential and social consumption, which is driving demand for products in categories like trendy toys, tea drinks, and luxury jewelry [6][7]. - The current new consumption trend is characterized by structural growth driven by policy support, demographic changes, and technological advancements, with a focus on innovative products that meet evolving consumer needs [7][8].

Investment Rating - The report maintains a "Buy" rating for the cosmetics and medical beauty sector, particularly highlighting companies like Shiseido and Up Beauty for their strong performance and growth potential [12][14]. Core Insights - The cosmetics and medical beauty sector underperformed the market during the week of August 1 to August 8, 2025, with the Shenwan Beauty Care Index growing by 1.7%, which is lower than the overall market performance [5][6]. - There is a notable divergence in the performance of domestic beauty brands in July, with strong growth observed in skincare brands like Han Shu and Marubi, while color cosmetics lagged due to weather and promotional timing [11][12]. - Up Beauty's H1 2025 performance exceeded expectations, with revenue projected between 4.09 to 4.11 billion yuan, reflecting a year-on-year growth of 16.8% to 17.3% [12][13]. Summary by Sections Industry Performance - The Shenwan Cosmetics Index increased by 1.3%, underperforming the Shenwan A Index by 0.6 percentage points, while the Shenwan Personal Care Index rose by 4.2%, outperforming the Shenwan A Index by 2.3 percentage points [5][6]. - The top-performing stocks in the sector included Up Beauty (+18.4%), Reliable Shares (+13.7%), and Lafang Home (+11.3%) [7]. Key Company Updates - Up Beauty's H1 2025 earnings report indicated a significant profit increase, with net profit margins improving due to optimized channel structures and a higher proportion of high-margin brands [12][13]. - Shiseido reported a 7.6% decline in sales for H1 2025, marking the largest drop in five years, with a notable decrease in the Chinese market [24]. E-commerce Insights - In July 2025, domestic beauty brands showed varied performance on major e-commerce platforms, with Han Shu achieving a 58% increase in GMV on Douyin, while color cosmetics faced challenges [20][21]. - The overall retail sales of cosmetics in June 2025 saw a decline of 2.3%, attributed to the pre-promotion of the 618 shopping festival [21][24]. Market Trends - The report highlights a shift in market dynamics, with domestic brands gaining market share against international competitors, particularly in the skincare segment [34][35]. - The Chinese skincare market is projected to reach 271.2 billion yuan in 2024, despite a 3.7% decline in growth [34][35].

Investment Rating - The report assigns an "Outperform" rating to multiple companies in the discretionary sector, including Nike, Midea Group, JD Group, Gree Electric, Haier Smart Home, Anta Sports, and others [1]. Core Insights - The new consumption theme is experiencing a resurgence, with the market increasingly focusing on risk/reward dynamics [4][5]. - Various sectors within discretionary consumption have shown different performance trends, with jewelry, gaming, and daily necessities outperforming the MSCI China index [4][11]. - The report highlights that most sectors are still undervalued compared to their historical averages over the past five years [17]. Sector Performance Overview - The jewelry sector saw a significant increase of 8.3%, driven by rising gold prices and strong sales growth from major players [5][14]. - The gaming sector also performed well, with notable increases in stock prices for Sands China and Galaxy Entertainment, supported by robust gaming revenue growth in Macau [5][14]. - The snack sector rose by 2.9%, with specific companies benefiting from the new consumption trend [5][14]. - The cosmetics sector experienced a 1.8% increase, with strong growth reported on e-commerce platforms [5][14]. - Conversely, the overseas sportswear sector declined by 0.5%, reflecting concerns over the U.S. economic cycle and competitive pressures [5][14]. Valuation Analysis - The expected PE ratios for various sectors in 2025 indicate that most are below their five-year historical averages, suggesting potential for future growth [17]. - For instance, the overseas sportswear sector has a projected PE of 31.8, which is 51% of its historical average, while the domestic sportswear sector is at 13.0, or 75% of its historical average [17]. - The jewelry sector's expected PE is 27.9, representing 49% of its historical average, indicating a favorable valuation compared to past performance [17].

Core Viewpoint - The company expects revenue in the first half of 2025 to reach between 4.09 billion and 4.11 billion RMB, representing a year-on-year growth of 16.8% to 17.3%, and net profit is projected to be between 540 million and 560 million RMB, showing a significant year-on-year increase of 30.9% to 35.8% [1] Group 1 - Growth drivers include the continuous contribution of the Han Shu brand's multi-category layout across all channels and a significant year-on-year increase in revenue from the infant skincare brand Newpage [1] - The main brand's promotional self-broadcasting performance is impressive, and the ongoing expansion of product categories is expected to support high growth [1] - According to Qingyan data, Han Shu ranked first in the Douyin beauty and skincare category in June and has maintained this position for eight consecutive months, with self-operated sales contributing 60.4% of its revenue in June [1] Group 2 - The company plans to build a six-part matrix in the long term, including mass skincare, personal care, maternal and infant products, skin medical beauty, makeup, high-end skincare, and instruments over the next decade [1] - The main brand Han Shu has strong momentum and has successfully established a strong brand presence on the Douyin channel, with other brands likely to replicate this successful model, further contributing to performance growth [1][2] - Based on the company's strong online sales performance, net profit forecasts for 2025-2027 are 1.02 billion, 1.28 billion, and 1.55 billion RMB, with year-on-year growth rates of 31.1%, 25.2%, and 20.9% respectively [2]

Investment Rating - The investment rating for the company is "Buy" (maintained) [4] Core Views - The company is expected to achieve a revenue of RMB 40.9 billion to RMB 41.1 billion in the first half of 2025, representing a year-on-year growth of 16.8% to 17.3%. The net profit is projected to be between RMB 5.4 billion and RMB 5.6 billion, showing a significant increase of 30.9% to 35.8% year-on-year. Key growth drivers include the multi-category layout of the Han Shu brand and significant revenue growth from the new baby skincare brand Newpage [8] - The company plans to build a matrix of six major segments over the next decade, including mass skincare, personal care, maternal and infant products, medical aesthetics, color cosmetics, and high-end skincare. The main brand Han Shu has shown strong momentum, particularly on Douyin, and other brands are expected to replicate this success, contributing to performance growth [8] - The company is projected to achieve net profits of RMB 10.2 billion, RMB 12.8 billion, and RMB 15.5 billion from 2025 to 2027, with year-on-year growth rates of 31.1%, 25.2%, and 20.9% respectively. The strong brand momentum of Han Shu and the successful establishment of a self-broadcasting system are expected to drive steady growth [8] Financial Summary - The company's revenue is forecasted to grow from RMB 6.79 billion in 2024 to RMB 11.70 billion in 2027, with growth rates of 62.1%, 27.8%, 16.8%, and 15.5% respectively [9] - The net profit attributable to the parent company is expected to increase from RMB 781 million in 2024 to RMB 1.55 billion in 2027, with growth rates of 69.4%, 31.1%, 25.2%, and 20.9% respectively [9] - The company's return on equity (ROE) is projected to be 23.0%, 35.7%, 31.9%, 28.5%, and 25.7% from 2023 to 2027 [6][9]

Core Viewpoint - The company expects a significant increase in net profit for the first half of 2025, driven by optimized channel and brand structures, leading to better-than-expected profit margins. Group 1: Revenue and Profit Forecast - The company forecasts revenue for 1H25 to be between 4.09 billion and 4.11 billion yuan, representing a year-on-year increase of 16.8% to 17.3% [1] - The expected net profit for 1H25 is projected to be between 540 million and 560 million yuan, indicating a year-on-year growth of 30.9% to 35.8% [1] - The anticipated net profit margin for 1H25 is 13.4%, calculated based on the midpoint of the profit forecast [1] Group 2: Brand and Product Performance - The Han Shu brand has successfully expanded its product lines, with the proportion of its main product series decreasing to over 60%, while the share of secondary products has increased to approximately 15% [1] - Newpage continues to show strong growth, with a GMV increase of over 140% across major platforms in 1H25 [1] - The company is also seeing growth in its new brands, such as Anminyou and Hongse Xiaoxiang, which are progressing well [1] Group 3: Profitability and Channel Optimization - Han Shu has optimized its channel structure, resulting in a significant improvement in profit margins, with the proportion of GMV from Douyin decreasing by 30 percentage points to 20% [2] - The overall profit margin for the company is expected to improve by 1.6 percentage points year-on-year to 13.4% due to the increased share of higher-margin brands like Newpage [2] Group 4: Future Growth and Brand Expansion - The company plans to continue expanding its brand matrix, having launched new brands in May and August, with further launches planned for the second half of 2025 [3] - The long-term strategy includes focusing on six major brands across skincare, hair care, and maternal and infant products over the next three years [3] - The company aims to establish a multi-brand, multi-category cosmetics group, indicating a broad growth potential in the market [3] Group 5: Earnings Forecast and Valuation - The company has raised its net profit forecasts for 2025 and 2026 by 13% each, now estimating 1.13 billion and 1.39 billion yuan respectively [3] - The current stock price corresponds to a P/E ratio of 27x for 2025 and 22x for 2026, with a target price increase of 15% to 98 HKD, suggesting a 20% upside potential [3]

Core Viewpoint - The company has released a positive earnings forecast, expecting significant revenue growth in the first half of the year, with profits expected to exceed revenue growth substantially [1][2] Group 1: Earnings Forecast - The company anticipates revenue between 4.09 billion and 4.11 billion yuan, representing a year-on-year growth of 16.8% to 17.3% [1] - Profit is expected to be between 540 million and 560 million yuan, showing a year-on-year increase of 30.9% to 35.8% [1] - The net profit margin for the first half is projected to be between 13.1% and 13.7%, indicating a significant improvement [1] Group 2: Growth Drivers - The revenue growth is primarily driven by the main brand, Han Shu, and the rapid growth of the infant and child brand, Yi Ye [1] - The company has adjusted its reliance on Douyin for sales, leading to a maintained industry-leading position for Han Shu in Douyin sales [1] - The market has underestimated the company's operational capabilities in the high-cost performance sector and its flexible cooperation model [1] Group 3: Long-term Growth Potential - The company is one of the few local cosmetics groups with a mature multi-brand and multi-category development strategy [2] - The main brand, Han Shu, is expected to maintain a compound annual growth rate (CAGR) of nearly 20% over the next three years [2] - The mid-to-high-end infant brand, Yi Ye, is projected to grow by over 100% this year, with a future CAGR of over 50% [2] - New brands and product lines, such as the hair care brand Ji Fang and skincare brand ATISER, are expected to contribute to future growth [2] Group 4: Earnings Adjustment - The earnings forecast has been adjusted, with expected earnings per share for 2025-2027 being 2.71, 3.42, and 4.19 yuan respectively [2] - A target price of 97.72 HKD has been set for 2025, based on a 33 times price-to-earnings ratio [2]

Core Viewpoint - The company, Shangmei Co., Ltd., has released a positive earnings forecast for the first half of 2025, indicating significant growth in both revenue and net profit, driven by strong performance from its main brand, Han Shu, and its smaller brand, Yi Ye [1][2]. Group 1: Earnings Forecast - For the first half of 2025, the company expects revenue to be between 4.09 to 4.11 billion yuan, representing a year-on-year growth of 16.8% to 17.3% [1]. - The net profit is projected to be between 540 to 560 million yuan, showing a year-on-year increase of 30.9% to 35.8% [1]. Group 2: Brand Performance - During the 2025 618 shopping festival, Han Shu maintained its position as the top-selling beauty and skincare brand on Douyin, with significant sales growth across multiple platforms: 46% on Tmall, 81% on JD, 40% on Vipshop, and 229% on Pinduoduo [2]. - The Yi Ye Newpage brand also saw impressive sales increases, with growth rates of 106% on Tmall, 190% on Douyin, and 158% on JD, ranking high in various categories within the baby care sector [2]. Group 3: Profitability Outlook - The company has raised its profit forecasts for 2025 to 2027, with expected net profits of 1.16 billion, 1.46 billion, and 1.76 billion yuan respectively, reflecting increases of 10%, 6%, and 1% from previous estimates [2]. - The projected price-to-earnings (PE) ratio for 2025 is 27 times, indicating continued confidence in the company's multi-brand development and upward trend in net profit margins [2].