Investment Rating - The investment rating for the social services industry is "Positive" (maintained) [1] Core Insights - The report highlights significant differentiation within the industry, particularly noting that the card category is under pressure. The performance of various segments, such as the toy industry and light medical beauty, shows strong growth, with companies like Xiaocaiyuan and Xinyang achieving notable revenue and profit increases [4][45] - The report indicates that the social services sector has underperformed compared to the broader market indices, with specific recommendations for investment in tourism, education, catering, and beauty care sectors [5] Summary by Sections 1. Toy Industry - In July 2025, the online sales of the toy category maintained steady growth, with a total sales amount of 1.23 billion yuan, representing a year-on-year increase of 29% [16] - The performance of various toy subcategories was strong, with blind boxes and anime peripherals showing significant growth rates of 55% and 70% respectively [17][21] - The number of offline toy stores reached 3,865, with a net increase of 131 stores, and the overall offline store efficiency grew by 8% year-on-year [28] 2. Xiaocaiyuan - Xiaocaiyuan achieved a revenue of 2.714 billion yuan in the first half of 2025, a year-on-year increase of 6.52%, and a net profit of 382 million yuan, up 35.66% [34][35] - The company’s gross margin improved to 70.46%, a historical high, and employee costs as a percentage of revenue decreased to 24.56% [34][40] - The company plans to accelerate its store opening pace, aiming to exceed 800 stores by the end of 2025 and reach a thousand-store scale by 2026 [34][42] 3. Xinyang - Xinyang's light medical beauty chain business saw revenue of 144 million yuan in Q2 2025, a remarkable year-on-year increase of 426% [45] - The company has expanded its operational scale, with 31 stores across 9 cities, and 25 stores generating positive cash flow [45][48] - The upcoming launch of the NAN beauty brand is expected to enhance market presence, with five new products set to be released [56][59] 4. Travel and Consumer Services - The report notes that the social services sector has lagged behind the broader market indices, with specific sectors like education and sports showing stronger performance [5][26] - Domestic air travel has seen a slight increase, while international flights have decreased, indicating a mixed recovery in the travel sector [60][64] - Visitor numbers to Hong Kong from the mainland and globally have shown positive trends, with a week-on-week increase of 15.4% and 16.9% respectively [65][67]

Investment Rating - The report maintains a "Buy" rating for the high-end domestic cosmetics brand Mao Geping, projecting a net profit of 1.184 billion, 1.542 billion, and 1.953 billion yuan for 2025-2027, with year-on-year growth rates of +34%, +30%, and +27% respectively [15]. Core Insights - The cosmetics and medical beauty sector underperformed the market, with the Shenwan Beauty Care Index growing by only 0.1% from August 8 to August 15, 2025, lagging behind the Shenwan A Index by 3.0 percentage points [6][7]. - Domestic brands are actively preparing for the upcoming consumption peak, with significant announcements from brands like Proya and Up Beauty, indicating a strategic focus on high-end markets [12]. - Mao Geping's performance in H1 2025 shows a strong revenue forecast of 2.57 billion to 2.6 billion yuan, reflecting a year-on-year growth of 30.4% to 31.9%, and a net profit of 665 million to 675 million yuan, indicating robust profitability in the high-end domestic makeup segment [13][14]. Summary by Sections Industry Performance - The cosmetics and medical beauty sector's performance was weaker than the overall market, with specific indices showing minimal growth [6][7]. - The top-performing stocks in the sector included Baiya Co. (+11.0%) and Nuobang Co. (+6.0%), while the worst performers were Beijia Co. (-13.1%) and Mao Geping (-9.4%) [8]. Recent Developments - The report highlights the upcoming earnings season for key domestic brands, with expectations for significant financial disclosures from companies like Runben Co. and Marubi Biological [12]. - New Oxygen Group reported a Q2 revenue of 379 million yuan, with its light medical beauty chain business showing a remarkable year-on-year growth of 426% [24][25]. E-commerce and Market Trends - The report provides insights into the e-commerce performance of domestic brands, with notable growth in GMV for brands like Proya and Up Beauty, indicating a strong online presence [18]. - The retail sales of cosmetics in July 2025 showed a year-on-year growth of 4.5%, suggesting a recovery in consumer spending [19][22]. Market Share and Competitive Landscape - The domestic cosmetics market is becoming increasingly competitive, with local brands gaining market share against international competitors, as evidenced by the performance of brands like Proya and Natural Hall [31][36]. - The report notes that the market for skincare products is projected to reach 271.2 billion yuan in 2024, despite a slight decline in growth [31].

Core Viewpoint - The launch of NAN beauty, a high-end makeup brand co-created by Shangmei Co. and renowned makeup artist Chun Nan, marks a significant expansion into the professional makeup sector for Shangmei, following its successful ventures in skincare, maternal and infant products, and hair care [1][2][10]. Group 1: Brand Launch and Product Offering - NAN beauty was officially unveiled at a brand launch event in Shanghai, featuring Chun Nan as the brand ambassador and partner, showcasing the initial product line including "Black Coffee Primer Essence," "CP Concealer Palette," "Beginner Powder Cream," "Stick Foundation," and "Smart Research Honey Powder Cake" [1][2]. - The first batch of NAN beauty products is set to be available for purchase on Douyin starting September 9, coinciding with Chun Nan's first live streaming event [2]. Group 2: Brand Positioning and Philosophy - NAN beauty is positioned as a mid-to-high-end professional makeup brand, representing Chun Nan's first makeup brand after 25 years in the industry, emphasizing a philosophy of showcasing natural beauty without excessive effort [4][7]. - The brand's design philosophy, "Deconstructing Modern Beauty with Eastern Wisdom," aims to meet consumer desires for natural and authentic makeup experiences, encapsulated in the concept of "Eastern Light and Transparent Aesthetics" [4]. Group 3: Product Innovation and Technology - NAN beauty's product line focuses on technology to restore the skin's natural beauty, utilizing micron-level powder to reflect natural light, breathable membrane technology for oil control and moisture retention, and light-reflecting particles for precise concealing [5]. Group 4: Strategic Team and Talent - The collaboration between Chun Nan and retail expert Gu Mai creates a "golden combination," combining top-tier aesthetic and product expertise with commercial success capabilities, enhancing NAN beauty's competitive edge [6][8]. - Chun Nan's extensive experience and influence in the industry, along with Gu Mai's background in e-commerce and brand management, provide NAN beauty with a unique positioning in the market [7][8]. Group 5: Strategic Goals and Market Position - The establishment of NAN beauty signifies Shangmei's strategic upgrade, entering the mid-to-high-end makeup market and supporting its goal of reaching 30 billion by 2030 and 100 billion by 2035 [10]. - NAN beauty is positioned as a key driver for achieving these ambitious targets, leveraging the current market dynamics where international brands are retracting, and domestic brands with professional makeup artist endorsements are emerging as strong contenders in the high-end market [10].