Investment Rating - The report does not explicitly provide an investment rating for the beauty industry Core Insights - The Chinese beauty industry is witnessing a strategic shift towards technology and upstream investments, with leading companies like Proya investing in biopharmaceuticals to enhance raw material R&D capabilities and build technological barriers [4] - The oral care market is experiencing significant growth, with Q1 2025 sales reaching 1.72 billion yuan, a year-on-year increase of 27.7%, driven by innovative products that address diverse consumer needs [4] - Starbucks is transitioning its strategy to include beauty products, appointing a former executive from E.L.F. to enhance its marketing efforts, aiming to alleviate growth anxieties in the North American market through sensory marketing [7] - Sephora has introduced six domestic beauty brands, aiming to attract younger consumers while facing challenges related to its high-end positioning [7] - Huaxizi has made a significant entry into the U.S. market by partnering with Ulta Beauty, marking a milestone for Chinese beauty brands in global expansion [8] - Lin Qingxuan is set to become the first "high-end domestic skincare stock" listed on the Hong Kong Stock Exchange, with a projected revenue of 1.052 billion yuan in the first half of 2024, reflecting a 98.3% year-on-year growth [8] Industry Trends - The beauty industry is increasingly focusing on building an ecological closed loop through investments in upstream technology and new brands, enhancing competitiveness [4] - The oral care segment is evolving with new product innovations that cater to health needs and technical upgrades [4] - The trend of cross-industry collaboration is evident, as brands like Starbucks seek to redefine their market presence through beauty products [7] - The introduction of domestic brands in high-end retail spaces indicates a shift in consumer preferences and retail strategies [7] - The global expansion of Chinese beauty brands highlights their growing international competitiveness and cultural integration [8]

Group 1 - The investment focus of Chinese beauty brands is shifting towards upstream pharmaceutical sectors to enhance raw material research and development capabilities, as seen with Proya's investment in Beijing Huaguan Biotechnology [3] - The overall trend in the Chinese beauty industry indicates that leading companies are investing in upstream technologies and new brands to build an ecological closed loop and enhance competitiveness [3] Group 2 - The oral care market is experiencing continuous upgrades, with Q1 2025 sales reaching 1.72 billion yuan, a year-on-year increase of 27.7%, driven by innovative products that meet diverse consumer needs [5] - New products include usmile whitening toothpaste, ice spring mouthwash, BOP teeth whitening strips, and others that utilize advanced technology for oral health [5] Group 3 - Starbucks is transitioning its strategy from sporadic collaborations to a systematic approach in the beauty sector, appointing a former E.L.F. executive to enhance its marketing efforts and address growth stagnation in North America [6] - This strategic shift reflects a trend of blurred brand boundaries in response to consumer upgrades, aiming to transform Starbucks into a lifestyle symbol [6] Group 4 - Sephora has introduced six domestic beauty brands, including Yeoseo and BABI, to adjust its product selection logic amid performance pressures, despite some consumer concerns about diluting its high-end positioning [7][8] - The introduction of these brands aims to attract younger consumers and shift from a "channel brand" to a "user brand," although it faces challenges in consumer perception [7][8] Group 5 - Huaxizi has become the first Chinese beauty brand to enter Ulta Beauty, marking a significant breakthrough in the U.S. market and showcasing the international competitiveness of Chinese beauty brands [9] - The brand combines traditional Chinese craftsmanship with modern technology, focusing on cultural and quality exports, and has products available in over 110 countries [9] Group 6 - Lin Qingxuan is set to become the first "high-end domestic skincare stock" listed on the Hong Kong Stock Exchange, with a projected revenue of 1.052 billion yuan in the first half of 2024, reflecting a year-on-year growth of 98.3% [10] - The company has a strong product line, including the best-selling camellia oil, and plans to use IPO funds for brand building and channel expansion, targeting Southeast Asian markets [10]