Investment Rating - The report upgrades the investment rating to "Buy" for the company [5] Core Views - The company is transitioning towards a multi-brand beauty group, with a focus on operational efficiency and data-driven strategies to enhance growth certainty [14][15] - The main brand, Han Shu, has shown significant revenue growth through effective channel strategies, particularly on Douyin, and is expected to continue this trend [5][15] - The company has successfully launched new brands and product lines, contributing to its revenue and market presence [5][14] Summary by Sections 1. Transition to a Multi-Brand Beauty Group - The company is evolving into a multi-brand beauty group, with Han Shu as its main brand, achieving revenue of 41.1 billion RMB in 25H1, a year-on-year increase of 17.3% [14] - The net profit for the same period was 5.6 billion RMB, reflecting a year-on-year growth of 34.7% [14] 2. Channel Strategy - The company has leveraged its historical experience to capitalize on sales and marketing opportunities, particularly through Douyin, which has become a key growth driver [24][31] - The transition from B2B to B2C has led to a significant increase in online self-operated channels, with Douyin's contribution to revenue rising sharply [19][22] 3. Product Development - The company has focused on developing high-quality products with competitive pricing, exemplified by the success of the "Red Waist" series, which has become a best-seller [52][54] - The introduction of the "X Peptide" series has also shown promising sales, with total sales exceeding 200 million RMB [61] 4. Operational Efficiency - The company's operational strategies have shifted towards a platform model, emphasizing top-tier resources and talent to enhance brand development [5][14] - The focus on data-driven decision-making has improved the company's ability to respond to market trends and consumer preferences [31][32]

Core Insights - The report highlights the adjustments in China's tariff strategy in response to U.S. non-tariff measures, including export controls on rare earths and threats of increased tariffs by Trump, indicating a growing division in U.S. political circles regarding tariff strategies [2][10] - It discusses the strategic flaws in Trump's tariff approach, emphasizing the need for a more nuanced strategy that includes non-tariff barriers and targeted measures rather than broad high tariffs [3][10] - The report suggests that U.S. policymakers are more focused on strategic and security issues rather than just economic outcomes, indicating a potential shift in how trade agreements with China may be structured [3][10] Summary by Sections Section 1: Adjustments in China's Tariff Strategy - The uncertainty surrounding tariffs has increased due to U.S. non-tariff measures since September, including expanded sanctions and new export controls on rare earths [2][10] - China has adopted a more proactive approach compared to the previous tariff phase, utilizing tactical agreements to gain strategic space without compromising core interests [10] - The U.S. political landscape shows bipartisan concern over China's export control measures, indicating a significant shift in strategy [10] Section 2: Flaws in Trump's Tariff Strategy - Trump's historical pattern of releasing strong pre-meeting signals to pressure opponents is noted, with a critique of the economic viability of reciprocal tariffs [3][10] - Recommendations for a refined approach include maintaining conditional tariffs and focusing on targeted export control lists to minimize collateral damage to domestic supply chains [3][10] Section 3: Desired Trade Agreements with China - U.S. policymakers express a preference for smaller, more manageable trade agreements rather than large-scale deals, which may require geopolitical concessions [3][10] - The urgency for Trump to secure a trade agreement is highlighted, as the economic costs of a non-agreement primarily impact the U.S. [3][10] - The report indicates that while formal agreements may not be reached, the ongoing negotiations have already led to some tariff easing effects for China [3][10]

Core Insights - Shanghai Shangmei Cosmetics Co., Ltd. announced international superstar Jackson Wang as the global ambassador for its core brand, Han Shu, marking Wang's first endorsement of a domestic beauty brand [1] - Han Shu, founded in 2003, achieved a revenue of 5.591 billion yuan in 2024, representing a year-on-year growth of 80.9%, and maintained the top position in Douyin's beauty category with a GMV of 6.784 billion yuan [1] - The brand's success is attributed to its continuous investment in research, product development, and brand building, establishing a strong presence in various channels [1][2] Brand Development - Han Shu has developed a multi-category matrix including skincare, makeup, hair care, and personal care, with several products achieving top positions in their respective categories [2] - The flagship product, Han Shu Red Waist Set, has sold over 16.5 million sets across all channels, consistently ranking first in Douyin's skincare set category [2] - The brand's marketing strategy includes signing popular figures like Ding Yuxi, Tian Xuning, and Jackson Wang to connect deeply with younger consumers [2] Global Strategy - The appointment of Jackson Wang is a significant step in Shangmei's globalization strategy, which aims to enhance the brand's international presence and reach broader audiences [2][3] - The company is expanding its global footprint through various cooperation models in countries such as Russia, Vietnam, Mongolia, Malaysia, and Indonesia [3] - Shangmei aims for substantial growth, targeting revenues of 10 billion yuan and eventually 30 billion yuan, as it navigates the global beauty market [3]

Group 1 - The company reported a robust revenue growth of 17.29% year-on-year, achieving an operating income of 4.108 billion yuan in H1 2025 [1] - The net profit attributable to the parent company reached 524 million yuan, reflecting a significant increase of 30.65% year-on-year [1] - The gross margin for H1 2025 was 75.52%, a slight decrease of 0.99 percentage points, while the net profit margin improved by 1.74 percentage points to 13.52% [1] Group 2 - The main brand, Han Shu, generated revenue of 3.344 billion yuan in H1 2025, marking a 14.3% increase, with significant sales from the Hong Man Yao and X Peptide series [2] - The second brand, Newpage, saw a remarkable revenue growth of 146.5% year-on-year, reaching 397 million yuan, achieving its annual sales target for 2024 [2] - The company is actively enhancing its online sales strategy, with self-operated online channels generating 3.421 billion yuan in revenue, a 24.6% increase, and accounting for 83.3% of total revenue [2] Group 3 - The company is expected to achieve net profits of 1.025 billion yuan, 1.286 billion yuan, and 1.566 billion yuan for the years 2025, 2026, and 2027, respectively, with corresponding PE ratios of 32, 26, and 21 [3]

Investment Rating - The report maintains a "Buy" rating for the company [4][7]. Core Insights - The company reported a robust revenue growth of 17.29% year-on-year, achieving a total revenue of 4.108 billion yuan in H1 2025. The net profit attributable to the parent company reached 524 million yuan, reflecting a significant increase of 30.65% [1]. - The gross margin for H1 2025 was 75.52%, a slight decrease of 0.99 percentage points year-on-year, while the net profit margin improved by 1.74 percentage points to 13.52% [1]. - The company effectively managed its expenses, with a sales expense ratio of 56.88%, down by 0.69 percentage points, and a management expense ratio of 3.72%, up by 0.47 percentage points [1]. Revenue Breakdown - The main brand, Han Shu, generated revenue of 3.344 billion yuan in H1 2025, marking a year-on-year growth of 14.3%. The secondary brand, Newpage, saw a remarkable revenue increase of 146.5% to 397 million yuan [2]. - The company launched several new products across various categories, including a high-end anti-aging skincare brand, and is preparing to introduce a well-known IP licensed baby brand [2]. Online Sales Strategy - The company has strengthened its online sales strategy, particularly on the Douyin platform, where the Han Shu brand consistently ranks first in GMV. Online self-operated channels generated 3.421 billion yuan in revenue, a 24.6% increase year-on-year, accounting for 83.3% of total revenue [3]. Profit Forecast - The company is projected to achieve net profits of 1.025 billion yuan, 1.286 billion yuan, and 1.566 billion yuan for the years 2025, 2026, and 2027, respectively, with corresponding P/E ratios of 32, 26, and 21 [4].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1][4][12] Core Views - The company reported a 30.7% year-on-year increase in net profit for H1 2025, achieving a revenue of 4.108 billion yuan (up 16.0% year-on-year) [4][5] - The main brand, Han Shu, continues to lead the market, while multiple brands are contributing to long-term growth [4][5] - The company maintains its profit forecast, expecting net profits of 1.006 billion, 1.258 billion, and 1.532 billion yuan for 2025, 2026, and 2027 respectively, with corresponding EPS of 2.53, 3.16, and 3.85 yuan [4][8] Financial Summary - Revenue for 2023 was 4.191 billion yuan, projected to grow to 8.496 billion yuan in 2025, reflecting a year-on-year growth of 25.1% [8] - Net profit for 2023 was 461 million yuan, expected to reach 1.006 billion yuan in 2025, indicating a year-on-year growth of 28.8% [8] - The gross margin is projected to remain stable at around 75.8% in 2025, with a net margin of 12.2% [8] - The company’s P/E ratio is expected to decrease from 33.1 in 2025 to 21.8 by 2027, indicating improving valuation [8]

Core Viewpoint - The report from CICC maintains the profit forecast for Shangmei Co., Ltd. (02145) for 2025-2026, with the current stock price corresponding to a P/E of 30/23x for those years, and raises the target price by 8% to HKD 106, indicating a potential upside of 17% [1] Group 1: Financial Performance - In 1H25, the company's revenue reached CNY 4.11 billion, a year-on-year increase of 17.3%, aligning with the upper limit of the previous earnings forecast [1] - The net profit for 1H25 was CNY 560 million, up 34.7% year-on-year, also exceeding the prior forecast range [1] - The attributable net profit was CNY 520 million, reflecting a year-on-year increase of 30.6%, meeting the expectations of the report [1] Group 2: Brand and Product Performance - The brand Han Shu achieved revenue of CNY 3.34 billion in 1H25, a year-on-year increase of 14%, with successful expansion across multiple product lines [2] - The brand Yipai saw a significant revenue increase of 146% year-on-year, reaching CNY 400 million, with strong sales of its star product [2] - The brand Hongse Xiaoxiang generated CNY 160 million in revenue, indicating initial success in its brand transformation [2] Group 3: Channel and Operational Efficiency - The company's gross margin improved by 1.7 percentage points to 75.5% in 1H25, while the sales expense ratio decreased by 0.7 percentage points to 56.9% [3] - The increase in the proportion of lower-cost external sales channels contributed to the optimization of the sales expense ratio [3] - The attributable net profit margin rose by 1.3 percentage points to 12.8% in 1H25, reflecting improved profitability [3] Group 4: Future Growth Strategy - The company continues to expand its brand matrix, having launched new brands in May and August, with positive initial results [4] - Plans for 2H25 include launching new brands targeting specific markets, such as a maternal and infant IP brand and a professional makeup brand [4] - The company aims to follow a "2+2+2" strategy over the next three years, focusing on skincare, hair care, and maternal-infant products to build a diverse brand portfolio [4]

Core Viewpoint - Shanghai Shangmei Cosmetics Co., Ltd. (02145.HK) has released a positive profit forecast for the first half of 2025, indicating strong revenue and net profit growth driven by its main brand Han Shu and the second growth curve brand New Page [1][2] Group 1: Financial Performance - For the first half of 2025, the company expects revenue to be between RMB 4.09 billion and RMB 4.11 billion, representing a year-on-year growth of 16.8% to 17.3% [1] - The net profit is projected to reach between RMB 540 million and RMB 560 million, showing a significant year-on-year increase of 30.9% to 35.8% [1] Group 2: Brand Strategy - The company is advancing a "single focus, multi-brand, globalization" strategy, creating a multi-brand matrix that includes the main brand Han Shu and the second curve brand New Page, achieving comprehensive layout across multiple categories and price ranges [2][10] - Han Shu has achieved a breakthrough in all-channel growth, with GMV on Douyin exceeding RMB 3.63 billion in the first half of 2025, maintaining its position as the top-selling beauty brand on the platform [4] Group 3: Product Innovation - The Han Shu brand has successfully launched innovative products, such as the Hong Man Yao series, which sold over 14 million sets, and the Bai Man Yao series targeting the whitening market, reinforcing the brand's market recognition for "functional skincare" [4] - New Page has shown strong growth since its launch in 2022, with a strategic upgrade focusing on "effective skincare" for all age groups, achieving a sales increase of 106% during the 618 shopping festival [6] Group 4: Competitive Advantage - The Anminyou brand targets the sensitive skin segment with its core ingredient "Artemisia Oil AN+", providing a gentle solution for sensitive skin, enhancing the company's professional skincare portfolio [8] - The company has established a complete innovation matrix in the hair care sector, launching differentiated brands like Jifang and Han Shu Hair Care, focusing on functional hair care and scalp anti-aging [8] Group 5: Research and Development - The company emphasizes R&D as a strategic priority, having established a 3.0 innovation R&D system and an "1+N open innovation platform" to integrate global scientific resources [11] - In 2024, Han Shu achieved a significant technological breakthrough with the approval of its self-developed cyclic peptide-9 anti-aging ingredient by the National Medical Products Administration [13] Group 6: Manufacturing and Future Goals - The company has built an international and intelligent production system, with a smart factory that operates fully automated processes from raw material scheduling to finished product delivery [14] - The company aims to reach a strategic target of RMB 30 billion by 2030, leveraging clear strategic planning and continuous R&D investment to transition from following international brands to leading industry development [16]

Core Insights - The strategic vision of Up Beauty Co., led by CEO Lv Yixiong, emphasizes long-term focus and multi-brand matrix, which is increasingly evident in the cosmetics industry development in the first half of 2025 [1] - Up Beauty Co. leverages a "single focus, multi-brand, globalization" approach to navigate challenges in the global beauty market, achieving record sales during the 618 shopping festival [1] Group 1: Main Brand Performance - The main brand, Han Shu, has maintained a leading position in the competitive beauty market, ranking as the top beauty brand on Douyin for two consecutive years [2] - During the 618 period, Han Shu achieved significant sales growth across major platforms, with Tmall sales increasing by over 46% and Douyin sales reaching top rankings in multiple categories [2][7] - The Han Shu X Peptide series achieved over 100 million in sales during the 618 event, showcasing the brand's strong research and innovation capabilities [4] Group 2: New Brand Growth - Newpage, a brand focused on infant skincare, reported a revenue of 376 million yuan in 2024, marking a year-on-year growth of 146.3% [11] - During the 618 shopping festival, Newpage saw triple-digit growth across major e-commerce platforms, with Tmall sales increasing by 106% within the first 3.5 hours [11] - The brand's "medical-research co-creation" model has proven effective, leading to significant sales of its star product, the infant soothing cream [12] Group 3: Emerging Brand Success - Anminyou, a brand targeting sensitive skin, experienced a sales increase of over 65% during the 618 period, with notable growth across various platforms [21] - The brand's star product, Qinghao Soothing Essence, ranked second on Douyin's anti-wrinkle essence list during the 618 event, indicating strong market presence [26] Group 4: Strategic Development and Innovation - Up Beauty Co. aims to reach a target of 30 billion yuan by 2030, focusing on a multi-brand and multi-category business model [27] - The company has invested in AI-driven smart factories, enhancing production capacity and efficiency, with a daily output of 2 million bottles [27] - Up Beauty Co. has established a robust research and development framework, including a scientific committee of over 300 researchers, to drive innovation and product development [29]

Investment Rating - The report maintains an "Overweight" rating for the retail industry [1] Core Insights - The 2025 618 shopping festival has been extended compared to 2024, with simplified discount rules, leading to strong performance from domestic beauty brands [3][8] - Tmall's overall GMV (Gross Merchandise Volume) during the 618 festival is expected to grow by 10% year-on-year, marking the highest quality growth in three years, with total e-commerce sales reaching 855.6 billion yuan, a 15.2% increase [3][9] - The beauty sector on Tmall is projected to see a year-on-year growth of 11.1%, accounting for 41.3% of the overall market [3][9] - Key domestic brands like Proya and Han Shu have secured top positions on Tmall and Douyin, while international brands are also regaining market share [3][9][11] - The pet food segment continues to show high growth, with significant increases in sales for various pet food categories [3][12] Summary by Sections Industry Trends - The 2025 618 shopping festival features a more refined promotional timeline, with a focus on simplified discount rules and stable promotional intensity [3][8] Sales Performance - Tmall's beauty sales during the 618 festival are expected to grow by 11.1%, with Proya and Han Shu leading the rankings on Tmall and Douyin respectively [3][9][11] - The overall e-commerce sales during the 618 festival reached 855.6 billion yuan, reflecting a 15.2% year-on-year growth [3][9] Investment Recommendations - The report suggests focusing on companies with upward momentum and new product catalysts, such as Ruoyu Chen, Shangmei Co., Guibao Pet, and Zhongchong Co., as well as those with attractive valuations like Maogeping, Proya, and Juzibio [3][12] Market Review - The report notes a decline in the retail index by 2.75% for the week of June 16-20, 2025, with a year-to-date decline of 7.89% [13][17] Company Valuation Table - The report includes a valuation table for various companies, indicating their market capitalization, closing prices, and projected earnings [19]