Summary of Chicmax Conference Call Company Overview - **Company**: Chicmax - **Industry**: Cosmetics - **Market Position**: Ranked among the top ten domestic cosmetics companies in China and top 15 in the overall beauty and personal care market in 2024 with a market share of 1.4% and retail sales of Rmb7.7 billion [12][17] Key Points and Arguments - **Long-term Vision**: Chicmax aims to be the No.1 domestic cosmetics group and one of the top 10 global cosmetics groups, supported by a clear strategic roadmap focusing on cosmetics, multi-brand operations, and globalization [1][12] - **Multi-brand Portfolio**: The company operates a multi-brand portfolio covering six categories: mass skincare, maternity & childcare, toiletries, color cosmetics, functional skincare, and high-end skincare [1][12] - **Financial Performance**: - Adjusted EPS for 2026E increased from Rmb3.56 to Rmb3.67 [5] - Revenue growth expected at a CAGR of 23% from 2025 to 2027E, with earnings growth at 32% CAGR [13][18] - Operating margin projected to rise from 10.9% in 2024 to 14.1% in 2027E, driven by gross margin expansion from 75.2% to 78.4% [13][18] - **Brand Performance**: - KANS brand is the number one cosmetics brand on Douyin with over Rmb6.5 billion GMV in 2024 [12][17] - Newpage brand sales increased by 147% in 1H25 to Rmb397 million, exceeding 2024 levels [7] - **Sales Target**: Chicmax targets Rmb30 billion in sales by 2030, with specific targets for its brands: KANS (Rmb20 billion), growth brands (Rmb8 billion), and seed brands (Rmb2 billion) [7] Financial Estimates - **Revenue Projections**: - FY24A: Rmb6,793 million - FY25E: Rmb8,638 million - FY26E: Rmb10,839 million - FY27E: Rmb12,673 million [11] - **Adjusted Net Income**: - FY25E: Rmb1,148 million - FY26E: Rmb1,462 million - FY27E: Rmb1,778 million [11] - **Valuation**: DCF-based price target of HK$114 implies a P/E of 30x for 2026E and 24x for 2027E [14][19] Risks and Catalysts - **Downside Risks**: Include product quality deterioration, inflation, challenges in new brand incubation, and government regulations [21] - **Upside Catalysts**: Success in new brand incubation and better-than-expected growth in core brands [21] Additional Insights - **Market Trends**: Chicmax is expected to benefit from the fast growth and local pride trend in China's cosmetics industry, leveraging its multi-brand portfolio and strong R&D capabilities [13][18] - **Corporate Structure**: The Brand BU Autonomy structure allows brand GMs full autonomy on operations, enhancing responsiveness to market dynamics and operational efficiency [7] This summary encapsulates the key insights from the conference call regarding Chicmax's strategic direction, financial performance, market positioning, and potential risks and opportunities in the cosmetics industry.