Investment Rating - The report maintains a "Buy" rating for the company [6] Core Insights - The employee stock ownership plan demonstrates the company's confidence in long-term development and aims to enhance employee motivation while aligning the interests of shareholders, the company, and employees [2][3] - The company achieved high-quality growth in the first three quarters of 2025, with revenue reaching 3.41 billion yuan, a year-on-year increase of 12%, and net profit attributable to shareholders of 140 million yuan, up 44% year-on-year [3] - The company continues to advance as a high-end beauty group, with a dual business strategy of proprietary and CP brands, focusing on high-end and global expansion [4] Financial Performance Summary - Revenue for 2025 is projected at 4.98 billion yuan, with a growth rate of 17.53% [5] - Net profit for 2025 is estimated at 241 million yuan, reflecting a growth rate of 118.75% [5] - Earnings per share (EPS) for 2025 is expected to be 0.62 yuan, with corresponding price-to-earnings (P/E) ratios of 33, 25, and 19 for 2025, 2026, and 2027 respectively [4][5] Business Strategy and Market Position - The company is leveraging multi-brand and multi-channel strategies to drive growth, with significant performance improvements noted across various platforms [3] - The report highlights the successful product upgrades and strong sales momentum for key brands, indicating a robust market presence [3][4] Valuation Metrics - The report provides a detailed forecast of financial metrics, including revenue, net profit, and EPS for the years 2025 to 2027, indicating a positive outlook for the company's financial health [5][10][12]

Core Insights - The company reported a revenue of 2.5 billion yuan for the first half of 2025, representing a year-on-year increase of 9.02% [1] - The net profit attributable to shareholders reached 123 million yuan, up 16.54% year-on-year, while the net profit excluding non-recurring items was 121 million yuan, a slight increase of 1.04% [1] - The company is focusing on high-end brand development, with self-owned brand revenue accounting for over 40% of total revenue [1] Financial Performance - The gross margin for the first half of 2025 was 64.61%, an increase of 3.13 percentage points year-on-year [2] - In Q2 2025, the gross margin improved to 65.27%, up 3.67 percentage points year-on-year [2] - The net profit margin for the first half of 2025 was 4.93%, an increase of 0.32 percentage points year-on-year, while the net profit margin excluding non-recurring items was 4.82%, a decrease of 0.38 percentage points [2] Brand Development - The company is establishing a high-end brand matrix, with brands like Ifidan, PA, and RV contributing to long-term growth [3] - Ifidan is positioned as a French luxury skincare brand, enhancing market recognition through innovative product combinations and experiential retail [3] - RV's flagship product "One Night Rejuvenation Oil" continues to lead sales on platforms like Tmall, indicating strong brand presence [3] Investment Outlook - The company is projected to achieve net profits of 250 million, 340 million, and 430 million yuan for the years 2025 to 2027, with year-on-year growth rates of 129.6%, 32.7%, and 28.0% respectively [4] - Corresponding price-to-earnings ratios are expected to be 33X, 25X, and 20X for the same years [4]

Group 1: Company Overview and Strategy - The company aims to build a "new high-end luxury beauty brand management group" through high-end and global strategies, focusing on brand globalization and optimizing business structure [2][3][8]. - In 2024, the company achieved a revenue of 4.237 billion CNY, with self-owned brands generating 1.651 billion CNY, maintaining a stable revenue share [3][8]. Group 2: Self-Owned Brands Performance - The self-owned brand segment achieved a revenue of 1.651 billion CNY, with a gross margin of 74.27% in 2024, indicating an improvement in product structure and profitability [3][9]. - The French luxury skincare brand EDB saw significant growth, with a focus on high-net-worth customers and successful marketing campaigns, leading to a strong brand presence [4][17]. - The brand PA, acquired in 2024, experienced over 300% growth, with expectations for continued expansion in both domestic and international markets [6][20]. Group 3: CP Brands Performance - The CP brand segment consists of five main categories, with a focus on quality and resource allocation, although the performance of the Kefu (formerly Johnson & Johnson) brand declined significantly [8][9]. - Other CP brands, such as ESI and Mistique, reported good growth, with ESI's GMV doubling year-on-year [8][9]. Group 4: Financial Performance - The company reported a net profit of 110 million CNY in 2024, a decrease of 62.63% year-on-year, attributed to increased market expenses and external economic pressures [9][12]. - The overall gross margin improved to 63.01%, up from 58.44% in 2023, driven by a higher proportion of high-margin products [9][12]. Group 5: Research and Development - The company applied for 28 patents and published 15 papers in 2024, emphasizing its commitment to R&D and innovation [10][11]. - R&D expenses accounted for 4.98% of self-owned brand revenue, aligning with international standards for leading beauty companies [9][11]. Group 6: Market Outlook and Challenges - The company anticipates a focus on high-end brands and a strategic reduction in lower-end brands to improve profitability [27][30]. - The external economic environment remains challenging, but the company is committed to maintaining a strong brand presence and sustainable growth [11][30].