Core Viewpoint - Guojin Securities has initiated coverage on Shumei Co., Ltd. (02145), recognizing it as a leading player in China's beauty and personal care industry, with a multi-brand matrix across skincare, baby care, and hair care sectors. The company primarily utilizes online channels and is expected to achieve strong growth, particularly with its main brand, Han Shu, and new brand development, leading to a target price of HKD 109.78 based on a 2025 PE of 30 times, with a "Buy" rating assigned [1]. Group 1: Company Development and Strategy - The company's multi-brand expansion strategy shares similarities with Anta Sports, focusing on market-driven approaches, precise brand positioning, and effective marketing to quickly address consumer pain points [2]. - The trend of refined channel operations is evident as the company restructures its channel strategy around Douyin, leveraging innovative marketing and increasing self-broadcasting to achieve significant revenue and profit growth [2]. - The company ensures a steady supply of core management talent through a dual approach of internal training and external recruitment, which supports differentiated development across its brands [2]. Group 2: Growth Projections and Market Position - The company is expected to achieve substantial growth in its three main segments: skincare, baby care, and hair care, with Han Shu projected to exceed CNY 10 billion in revenue within three years [3]. - In the skincare segment, Han Shu has seen a significant market share increase through Douyin, with projected revenue growth of over 80% in 2024, despite a slowdown in H1 2025 due to channel adjustments [3]. - The baby care brand, Yiye, is experiencing rapid growth with a unique "medical research co-creation" model, expected to achieve a compound annual growth rate of over 50% in the next three years [3]. - The hair care segment is anticipated to produce major brands, with a focus on clear positioning and consumer mindset development, as well as entering faster-growing segments like anti-hair loss [3]. Group 3: Financial Forecasts - The company achieved an online sales ratio of nearly 93% in H1 2025, with Han Shu's rapid growth through Douyin contributing to projected revenues of CNY 5.591 billion in 2024, reflecting an 80.9% year-on-year increase [4]. - New brands like Yiye are also rapidly gaining traction, with projected growth rates of 498% for 2023 and 146% for H1 2025 [4]. - Earnings per share (EPS) forecasts for 2025-2027 are estimated at CNY 2.68, CNY 3.33, and CNY 4.09, respectively, with a valuation of 24 times for 2026 [4].

Core Viewpoint - Guojin Securities has initiated coverage on Shangmei Co., Ltd. (02145), recognizing it as a leading player in China's beauty and personal care industry, with a multi-brand matrix across skincare, baby care, and hair care sectors. The company is primarily focused on online channels, and given the strong growth potential of its multi-brand strategy, it has set a target price of HKD 109.78 based on a 30x PE valuation for 2025, rating it as "Buy" [1]. Group 1: Company Development and Strategy - The company's multi-brand expansion strategy shares similarities with Anta Sports, focusing on market-driven approaches that quickly identify consumer pain points and launch targeted products while leveraging impactful marketing and top-tier IP collaborations [1]. - The trend of refined channel operations is evident as the company restructures its channel strategy around Douyin, enhancing revenue and profit growth through innovative marketing and increased self-broadcasting [1]. - The company ensures a steady supply of core management talent through a dual approach of internal training and external recruitment, which supports differentiated development across its brands [1]. Group 2: Growth Projections - The company is expected to achieve significant growth in its three main segments: skincare, baby care, and hair care, with projections indicating that Han Shu could surpass CNY 10 billion in revenue within three years [2]. - In the skincare segment, Han Shu has seen a notable increase in market share through Douyin, with projected revenue growth exceeding 80% in 2024. Despite a slowdown in H1 2025 due to channel adjustments, Q3 2025 GMV is expected to grow by 50% year-on-year [2]. - The baby care brand, Yiye, is experiencing rapid growth with a projected compound annual growth rate (CAGR) exceeding 50% over the next three years, while the hair care segment is anticipated to produce major brands by leveraging clear positioning and consumer engagement strategies [2]. Group 3: Financial Forecasts - The company is projected to achieve a revenue of CNY 5.591 billion in 2024, reflecting an 80.9% year-on-year increase, with H1 2025 revenue expected to grow by 14.3% to CNY 3.344 billion [3]. - New brands like Yiye are rapidly gaining traction, with annual growth rates of 498% in 2023 and 146% in 2024, and a continued strong performance expected in H1 2025 [3]. - Earnings per share (EPS) forecasts for 2025-2027 are estimated at CNY 2.68, CNY 3.33, and CNY 4.09, respectively, with a valuation of 24x for 2026 [3].

Core Insights - Unilever has made a strategic investment in the hair care brand Messy, leading a $5 million funding round, with over $3 million already received [1][3] - Messy, founded by Alli Webb, is recognized as a prominent independent hair care brand, having launched five core products and planning to expand its product range [3] - Unilever's recent activities in the hair care sector indicate a focus on high-growth and high-margin beauty and health segments, with significant investments in brands like NEXXUS [4] Company Developments - Messy has gained attention for its innovative approach in the hair care market, with plans to introduce mini products, hair accessories, and travel kits [3] - Unilever's investment in Messy is likely influenced by Webb's extensive entrepreneurial experience in the hair care industry [3] - The company has been actively enhancing its brand portfolio in China, as seen with the launch of NEXXUS and its marketing strategies [4] Industry Trends - The hair care market in China is experiencing rapid growth, with a projected market size exceeding 30 billion yuan in 2024, reflecting a year-on-year growth rate of over 33% [5] - Competition in the hair care sector is intensifying, with both international and domestic brands entering the market, including recent moves by Proya and other local brands [5] - The market is characterized by a high level of maturity, making it challenging for new entrants unless they can offer significant technological differentiation and strong branding [5]

Core Insights - The acquisition of Color Wow by L'Oréal marks a strategic move to expand its high-end hair care portfolio and enter the growing Chinese market [1][4] - The hair care market in China is rapidly expanding, with significant competition among beauty brands to capture market share [7][8] Group 1: Acquisition Details - L'Oréal has signed an agreement to acquire Color Wow, a professional hair care brand founded in 2013, known for addressing stubborn hair issues [4] - Color Wow's sales have reportedly doubled over the past three years, with total sales exceeding $300 million and a target valuation of $1 billion [4] - The acquisition is seen as a way for L'Oréal to strengthen its position in the hair care and styling categories [4][5] Group 2: Market Dynamics - The Chinese hair care market is projected to grow from 581.4 billion yuan in 2021 to an estimated 668-691 billion yuan by 2025, driven by scalp care, premiumization, and export growth [7] - L'Oréal's professional hair care division has shown consistent growth, with a 5.3% increase in sales in 2024 and a 2.7% increase in Q1 2025 [5] - Competitors like Proya and Juhua Group are also expanding their presence in the hair care sector, indicating a highly competitive landscape [7][10] Group 3: Competitive Landscape - The hair care market in China is characterized by established brands like Procter & Gamble and Unilever, with L'Oréal ranking behind them in market share [10] - New entrants face challenges in a mature market, requiring strong technological differentiation and effective branding to succeed [11] - The competitive pressure is evident as brands like Proya and others are rapidly launching new products and expanding their market reach [7][10]