Core Insights - The company reported Q3 2025 earnings that met market expectations, with a revenue of 3.464 billion yuan for the first three quarters, a year-on-year decline of 13.78%, and a net profit attributable to shareholders of 272 million yuan, down 34.45% [1] - In Q3 2025, the company achieved a quarterly revenue of 1.092 billion yuan, a 10% year-on-year decline, but managed to turn a profit with a net profit of 25 million yuan and a non-recurring net profit of 1 million yuan [1] - The improvement in Q3 sales expense ratio significantly contributed to the company's turnaround from loss to profit [1] Financial Performance - For the first three quarters of 2025, the gross margin was 74.33%, a year-on-year increase of 0.60 percentage points, while the net profit margin was 7.97%, a decrease of 2.10 percentage points [1] - In Q3 2025, the gross margin was 70.68%, a year-on-year decrease of 5.67 percentage points, with a net profit margin of 2.52% [1] - The sales expense ratio for Q3 2025 was 50.65%, a year-on-year decrease of 9.76 percentage points, while the management expense ratio was 12.34%, a decrease of 1.21 percentage points [1] Market Outlook - The Double 11 shopping festival is expected to improve Q4 performance, with the main brand, Winona, ranking 8th in beauty sales on Tmall during the event [2] - The company is focusing on brand building and member operations, implementing differentiated member and brand operation strategies [2] - The revenue growth forecast for the skincare segment has been adjusted downwards for 2025-2027, with expected revenues of 5.354 billion, 5.804 billion, and 6.467 billion yuan respectively [3] Strategic Initiatives - The company is enhancing its product structure and profitability by focusing on core products and reducing promotional activities [2] - The organization is undergoing structural adjustments to drive positive changes, particularly in the sensitive skin product category [3] - Research and development efforts are being strengthened through partnerships with various research institutes to innovate and develop effective cosmetic products [2]