Summary of Mao Geping Cosmetics Co. (1318.HK) Conference Call Company Overview - Company: Mao Geping Cosmetics Co. (1318.HK) - Market Cap: HK$48.1 billion / $6.1 billion - Current Price: HK$98.15 - 12-Month Price Target: HK$86.00, indicating a downside of 12.4% [9] Key Financial Highlights - 1H25 Profit Alert: - Net Income (NI): Expected to be between RMB665-675 million, representing a year-over-year increase of 35-37%, with a midpoint of RMB670 million, up 36% year-over-year, aligning with Goldman Sachs estimates of RMB666 million [1] - Sales: Expected to be between RMB2,570-2,600 million, reflecting a year-over-year growth of 30-32%, which is weaker than Goldman Sachs' estimate of RMB2,647 million at 34% year-over-year growth [1] - Net Profit Margin (NPM): Expected to expand by 0.9-1.0 percentage points to 25.9%-26.0%, above Goldman Sachs' estimate of 25.1% [1] Market Concerns - Sales Performance: The weaker sales in 1H25 may indicate slower than expected growth in the skincare segment, which could impact the company's structural upside, as the color makeup business has limited growth potential [2] - Brand Recognition: Despite concerns, the market acknowledges MGP's niche brand premium, evidenced by better-than-expected NPM and healthy offline growth estimated at over 20% due to accelerated store expansion in high-end commercial districts in Tier 1 cities [2] Focus Areas for Upcoming Results - Sales and Margin Details: Breakdown of sales growth by skincare and color cosmetics, as well as online versus offline performance [3] - 2025 Outlook: Expectations for the full year 2025 [3] - Double 11 Strategies: Plans regarding discounts, product offerings, channels, and KOL collaborations [3] - Skincare Strategy: Expansion plans for the skincare category and online channels [3] - Fragrance Line Performance: Updates on the performance of the fragrance line and new product pipelines [3] Investment Rating - Current Rating: Neutral [4] Valuation Methodology - Target Price Methodology: Based on a 25x 2027E PE, discounted back to mid-2026E at an 8.9% cost of equity [5] Risks and Considerations - Key Risks: - Variability in beauty consumption penetration in China - Online penetration rates - Development of new star SKUs, particularly in skincare - ROI on expanding consumer base into higher-tier markets and online channels - Key person risk [8] Financial Projections - Revenue Forecasts: - 2024: RMB3,884.7 million - 2025E: RMB5,136.9 million - 2026E: RMB6,524.6 million - 2027E: RMB7,925.4 million [9] Conclusion Mao Geping Cosmetics Co. is facing challenges with weaker sales in the first half of 2025, raising concerns about growth in the skincare segment. However, the company maintains a strong net profit margin and brand recognition. The upcoming results will be critical in assessing the company's strategies and outlook for the remainder of the year.
毛戈平_利润预警_2025 年上半年销售未达预期，净利润符合预期；潜在的护肤品 weakness 受关注Mao Geping Cosmetics Co. (1318.HK)_ Profit alert_ 1H25 sales miss while NI in line; Potential skincare weakness in focus