Financial Data and Key Metrics Changes - Total net revenues for Q3 2025 increased by 47.5% year-over-year to RMB 998.4 million, up from RMB 677 million in the prior year [11] - Gross profits rose by 51.9% to RMB 780.5 million, with gross margin increasing to 78.2% from 75.9% [11][12] - Net loss narrowed to RMB 70.4 million, improving the net loss margin to 7% from 17.9% in the prior year [16] Business Line Data and Key Metrics Changes - Skincare brands saw a significant revenue increase of 83.2% year-over-year, contributing 49.2% of total revenue [4][11] - Color cosmetics brands experienced a 25.2% year-over-year revenue increase [11] - Perfect Diary's base makeup category exceeded 40% of total sales, reflecting strong performance [9] Market Data and Key Metrics Changes - The beauty market in China is showing signs of recovery, particularly in the skincare category, which is driving overall industry growth [4] - The company observed increased competition from foreign high-end brands during the Double 11 shopping festival, with some brands struggling due to deep price cuts [22][23] Company Strategy and Development Direction - The company is focused on building a competitive brand portfolio anchored in R&D and innovation, aiming for sustainable growth and profitability [4][10] - There is a commitment to optimizing product and channel mix to improve gross margins and marketing ROI [30] - The company plans to continue investing in innovation while balancing growth with profitability [5][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in reaching profitability, emphasizing the importance of balancing growth and profitability [23] - The company expects total net revenues for Q4 2025 to be between RMB 1.32 billion and RMB 1.49 billion, representing a year-over-year increase of approximately 15% to 30% [18] Other Important Information - The company had cash, restricted cash, and short-term investments of RMB 1.16 billion as of September 30, 2025, down from RMB 1.36 billion at the end of 2024 [17] - Net cash used in operating activities for Q3 2025 was RMB 126.8 million, an improvement from RMB 175.9 million in the prior year [17] Q&A Session Summary Question: Performance during Double 11 Festival and competition from foreign brands - Management indicated that overall performance during Double 11 was in line with expectations, with some brands exceeding them. They noted significant competition from foreign high-end brands, which are facing challenges due to price cuts [21][22][23] Question: Sustaining skincare business growth and improving profitability - Management highlighted R&D as a key driver for skincare growth, along with product line expansion and improved marketing ROI. They emphasized the importance of optimizing product and channel mix for profitability [27][28][30][31] Question: Future expenses and competition in online channels - Management expects stable general and administrative expenses with operational leverage as revenue grows. They believe that continued investment in R&D and brand building will help navigate fierce online competition [34][40]