Core Insights - The company achieved a cumulative revenue of 4.961 billion yuan in the first three quarters of 2025, representing a year-on-year growth of 10.83% [1] - In Q3 2025, the revenue reached 1.483 billion yuan, showing a significant year-on-year increase of 28.29% [1] - The growth was primarily driven by strong performance in the beauty segment and effective expansion of online channels [1] Revenue Breakdown - The beauty segment was the standout performer, with Q3 2025 revenue of 354 million yuan, a substantial year-on-year increase of 272.25% [1] - The personal care segment maintained a solid foundation, generating 606 million yuan in Q3 2025, up 13.83% year-on-year [1] - The innovation segment achieved a year-on-year growth of 4.50%, while the overseas segment saw a slight decline of 2.58% [1] - Online revenue in the domestic market grew by 1.7 times year-on-year, with online sales accounting for over 50% for the first time in Q3 2025 [1] Profitability and Cost Management - The gross margin for the first three quarters of 2025 was 62.81%, an increase of 3.39 percentage points year-on-year [2] - The increase in gross margin was attributed to a higher proportion of high-margin beauty products and a decrease in some raw material costs [2] - The net profit margin for the first three quarters of 2025 was 8.17%, reflecting a year-on-year increase of 4.54 percentage points [2] Strategic Outlook - In the short term, the company plans to deepen promotional efforts around core brands and key products, with increased brand investment in Q4 2025 to support growth targets for 2026 [2] - Long-term goals include focusing on core brands and online channels, aiming to position key categories at the forefront of niche markets through enhanced product strategies and increased investment in high-end and functional R&D [2] - The company expects EPS for 2025, 2026, and 2027 to be 0.62, 0.69, and 0.76 yuan, respectively, maintaining a "buy" rating [2]

Investment Rating - The investment rating for the retail industry is "Positive" (maintained) [1] Core Views - The retail industry is experiencing a shift towards quality growth and long-term strategies, moving away from reliance on traffic bonuses [25][26] - The industry is focusing on emotional consumption themes, with high-quality companies in sectors like gold jewelry, offline retail, cosmetics, and medical aesthetics being highlighted as investment opportunities [5][29][30] Summary by Sections Retail Market Review - The retail industry index rose by 3.45% during the week of November 24-28, 2025, outperforming the Shanghai Composite Index by 2.05 percentage points [4][13] - The multi-format retail sector showed the highest growth this week, with a 6.18% increase, while the jewelry sector led the year-to-date performance with a 22.11% increase [18][19] Retail Insights: Brand Building and Technological Aesthetics - The 2025 Cosmetics Annual Conference highlighted the importance of brand building and technological aesthetics for domestic beauty brands to achieve growth [25][26] - Companies like Shiseido and Shanghai Jahwa are focusing on quality and profitability, while Elysian Group is transitioning from operational to technological drivers [26][27] Investment Recommendations - **Gold Jewelry**: Focus on brands with differentiated product offerings and consumer insights, recommending companies like Chow Tai Fook and Lao Pu Gold [5][29] - **Offline Retail**: Highlighting companies adapting to trends and exploring AI-enabled cross-border e-commerce, with recommendations for Yonghui Supermarket and Aiyingshi [5][30] - **Cosmetics**: Emphasizing brands that meet emotional value and safety innovation, recommending companies like Maogeping and Proya [5][30] - **Medical Aesthetics**: Targeting differentiated product manufacturers and expanding medical chains, recommending companies like Aimeike and Kedi-B [5][30] Company-Specific Insights - **Chow Tai Fook**: Achieved revenue of HKD 38.986 billion in FY2026H1, with a slight decline in revenue but a stable profit margin [36][37] - **潮宏基 (Chao Hong Ji)**: Reported a revenue increase of 28.4% in Q1-Q3 2025, with a strong performance in Q3 [39][40] - **永辉超市 (Yonghui Supermarket)**: Experienced a revenue decline of 22.2% in Q1-Q3 2025, but is undergoing a transformation towards quality retail [43][44]

Group 1 - The cosmetics sector increased by 0.29% on November 28, with Jiaheng Jiahua leading the gains [1] - The Shanghai Composite Index closed at 3888.6, up 0.34%, while the Shenzhen Component Index closed at 12984.08, up 0.85% [1] - Jiaheng Jiahua's stock price rose by 6.45% to 40.28, with a trading volume of 67,100 shares and a transaction value of 266 million yuan [1] Group 2 - The cosmetics sector experienced a net outflow of 61.04 million yuan from institutional investors, while retail investors saw a net inflow of 76.64 million yuan [2] - Among individual stocks, Marubi Biological had a net outflow of 9.46 million yuan from institutional investors, while Shanghai Jahwa saw a net inflow of 5.63 million yuan [3] - The overall trading activity in the cosmetics sector indicates a mixed sentiment, with some stocks experiencing significant outflows while others attracted retail interest [2][3]

Core Insights - The report maintains an "outperform" rating for the retail sector, highlighting the potential for recovery in consumer demand and the importance of adapting to new market conditions [1][4][10] 2025 Industry Review - In the first three quarters of 2025, China's retail sales reached 365,877 billion yuan, growing by 4.5% year-on-year, with non-automotive retail sales increasing by 4.9% [2][10] - The cosmetics sector saw a stable growth of 3.9%, while gold and jewelry sales surged by 11.5% due to low base effects and rising gold prices [2][26] - Cross-border e-commerce imports and exports amounted to approximately 2.06 trillion yuan, reflecting a growth of 6.4% despite external pressures [2][33] 2026 Outlook - New markets will be explored, including offline channel adjustments and innovations in instant retail, alongside continued overseas expansion opportunities [3][61] - New consumer demands will focus on emotional and practical value, leveraging AI and IP for product innovation [3][66] - A platform-based approach is necessary to ensure sustainable growth amid intensifying competition and shorter product life cycles [3][66] Investment Recommendations - The report suggests focusing on leading companies in beauty care, gold and jewelry, cross-border e-commerce, and offline retail, with specific recommendations for companies like Up Beauty, Chow Tai Fook, and Yonghui Superstores [4][34] - The beauty care sector is expected to benefit from product innovation and platform capabilities, while gold and jewelry companies are advised to capitalize on differentiated designs [4][45] - Cross-border e-commerce firms are projected to thrive as external tariff impacts diminish, with recommendations for companies like Anker Innovations and Focus Technology [4][54] Consumer Behavior Trends - The report notes a structural shift in consumer preferences, with a growing emphasis on emotional value and product differentiation, particularly among younger demographics [3][78] - Instant retail is identified as a significant growth area, with the market expected to exceed 2 trillion yuan by 2030 [3][80] Cross-Border E-commerce Insights - Cross-border e-commerce continues to show resilience, with exports to the EU growing by 8.4% while exports to the US declined by 17% due to tariff impacts [33][87] - Successful brands in overseas markets are those that effectively combine global branding with localized operational strategies [87]

Core Viewpoint - Shanghai Jahwa is focusing on the CS channel after a significant increase in net profit in the first three quarters, aiming to leverage its product and channel strengths to reshape the entire value chain from brand to consumer [3][6]. Group 1: Market Insights - The CS channel has shown resilience and potential for growth, with many consumers still preferring in-store experiences and interactions with staff [4]. - The latest data indicates a recovery in the CS channel, with retail sales of cosmetics reaching 328.82 billion yuan in the first three quarters of 2025, a year-on-year increase of 3.9% [8]. - Despite a 2.8% decline in total sales, the decrease has narrowed significantly, indicating a shift towards the efficacy skincare era where in-store experiences are crucial for consumer trust [8][9]. Group 2: Strategic Initiatives - Shanghai Jahwa has recognized the importance of the CS channel and is implementing a dual strategy focusing on efficacy skincare and enhancing the in-store experience [11]. - The company has introduced the "Golden Chain Plan," a digital activation and incentive mechanism aimed at rebuilding the value chain of the CS channel [18][20]. - The plan addresses three key challenges: driving foot traffic to stores, simplifying product selection, and resolving pricing discrepancies between online and offline channels [19]. Group 3: Product Development - The new generation of peptide products from the brand "Dian Cui" is designed to meet the high demand for effective skincare solutions, drawing inspiration from medical beauty treatments [21]. - The unique technology behind the new products, such as the环二肽-1, offers significant advantages in terms of efficacy and penetration, enhancing the overall consumer experience [23][25]. - The comprehensive anti-aging system developed by the brand includes multiple active ingredients that work synergistically to improve skin quality, showcasing the brand's commitment to innovation [26]. Group 4: Future Outlook - The integration of the Golden Chain Plan and the new peptide series represents a systematic innovation around the CS channel, aiming to create a complete growth engine by aligning product, technology, experience, and data [29]. - This new operational structure is expected to enhance the CS channel's capabilities, making it more adaptable to modern retail demands [30]. - The anticipated launch of the new products in January 2026 is expected to generate significant market interest and potentially lead to the emergence of new bestsellers in the CS channel [30].

Core Viewpoint - The cosmetics sector experienced a 1.6% increase on November 27, with Keshare leading the gains, while the overall market showed mixed results with the Shanghai Composite Index rising by 0.29% and the Shenzhen Component Index declining by 0.25% [1] Group 1: Market Performance - The Shanghai Composite Index closed at 3875.26, up 0.29% [1] - The Shenzhen Component Index closed at 12875.19, down 0.25% [1] - The cosmetics sector's individual stock performance is detailed in a table, highlighting significant gainers such as Keshare with a 9.12% increase [1] Group 2: Individual Stock Performance - Keshare (300856) closed at 16.15 with a 9.12% increase and a trading volume of 310,700 shares, amounting to a transaction value of 489 million yuan [1] - Marubi Biological (603983) closed at 35.19, up 4.89%, with a trading volume of 87,200 shares and a transaction value of 304 million yuan [1] - Other notable performers include Water Sheep (300740) with a 2.72% increase and a transaction value of 580 million yuan [1] Group 3: Capital Flow Analysis - The cosmetics sector saw a net outflow of 25.34 million yuan from institutional investors and 82.57 million yuan from retail investors, while individual investors contributed a net inflow of 108 million yuan [2] - A detailed table shows the capital flow for individual stocks, indicating that LaFang (603630) had a net inflow of 5.96 million yuan from institutional investors [3] - Other stocks like Shanghai Jahwa (600315) and Huaye Fragrance (300886) also experienced varying degrees of net inflow and outflow from different investor categories [3]

Overview - The consumption of toner in China is expanding beyond female consumers as male skincare awareness increases, leading to a new growth point in the market [1][9] - The sales revenue of toner in China reached 20.863 billion yuan in 2021, with a year-on-year growth of 2.98%, but is projected to decline to 17.865 billion yuan in 2024, a decrease of 3.25% [1][10] - High-end toners account for approximately 55.47% of the market, while mass-market toners make up about 44.53% [1][10] Industry Development - The toner industry in China has evolved from basic cleansing products to a mature category with diverse sub-segments, entering a phase of high-quality development characterized by multiple innovations [4] - The rise of "ingredient-focused" consumers has led to the popularity of natural plant extracts and additive-free formulations, while new technologies like micro-ecological skincare and nano-encapsulation enhance product efficacy [4] - Online channels such as e-commerce and live streaming have emerged, allowing both domestic and international brands to expand their reach, while offline stores upgrade consumer experiences through smart skin testing [4] Market Policies - The Chinese government has implemented a series of regulations to enhance the development of the cosmetics industry, including guidelines for production quality management and safety assessments, pushing the toner industry towards standardization and sustainability [6] Industry Chain - The upstream of the toner industry includes suppliers of raw materials like glycerin, hyaluronic acid, and packaging materials, while the midstream involves research and production, and the downstream encompasses various sales channels including e-commerce and retail [4][8] Consumer Insights - The core consumer group for toners in China is predominantly female, accounting for 87.6%, but the male consumer segment is growing, with increasing acceptance of refreshing and non-greasy products [8] - The age demographic shows that consumers aged 18-35 represent over 68.3% of the market, with younger consumers particularly influenced by online marketing and product safety [8] Competitive Landscape - The toner market in China is highly competitive, featuring both international brands like L'Oréal and Shiseido, and domestic players such as Proya and Beitaini, with the latter gaining market share through high cost-performance ratios [10][11] - Proya, for instance, focuses on technology-driven skincare targeting young professional women, while Beitaini offers a range of skincare and cosmetic products, achieving significant revenue growth [11][12] Future Trends - The toner market is expected to move towards more specialized products catering to specific skin types and conditions, with a focus on "no-additive" formulations and the use of gentle, natural ingredients [14] - Brands will increasingly emphasize ingredient transparency and safety, enhancing consumer trust through clear sourcing and testing information [14]

Market Overview - The cosmetics sector experienced a decline of 1.1% on November 26, with Kesheng Co. leading the drop [1] - The Shanghai Composite Index closed at 3864.18, down 0.15%, while the Shenzhen Component Index closed at 12907.83, up 1.02% [1] Individual Stock Performance - Notable gainers included: - Shuiyang Co. (300740) with a closing price of 19.85, up 2.58% [1] - Fulejia (301371) also rose by 2.58% to 27.88 [1] - Major decliners included: - Kesheng Co. (300856) fell by 4.88% to 14.80 [2] - Marubi Bio (603983) decreased by 2.95% to 33.55 [2] - Jiahen Home (300955) dropped by 2.85% to 37.84 [2] Trading Volume and Capital Flow - The cosmetics sector saw a net inflow of 7.95 million yuan from institutional investors, while retail investors contributed a net inflow of 7.35 million yuan [2] - However, there was a net outflow of 15.30 million yuan from speculative funds [2] Detailed Capital Flow Analysis - Key stocks with significant capital flow: - Jiahen Home (300955) had a net inflow of 18.65 million yuan from institutional investors, but a net outflow of 19.54 million yuan from retail investors [3] - Fulejia (301371) saw a net inflow of 12.12 million yuan from speculative funds, despite a net outflow from retail investors [3] - Other stocks like Qingdao King (002094) and Shanghai Jahwa (600315) also experienced mixed capital flows, indicating varied investor sentiment [3]

Investment Rating - The report maintains a "Positive" outlook on the beauty and personal care industry, highlighting robust demand and the continued rise of domestic brands [2]. Core Insights - The beauty care industry is experiencing a stable demand phase, with domestic leading brands expected to grow during the industry consolidation period [3]. - The cosmetics sector showed resilience during the off-peak season, with retail sales reaching 98.2 billion yuan from July to September, reflecting a single-digit year-on-year growth and an acceleration compared to the first half of 2025 [2][3]. - The report emphasizes the strong performance of domestic brands during the Double 11 shopping festival, with Proya ranking first in Tmall's beauty sales [2][11]. Summary by Sections Cosmetics Sector Performance - The cosmetics sector's key A-share companies reported an average revenue growth rate of around 3% in Q3 2025, with overall improvement in net profit [2]. - Proya's cumulative revenue for the first three quarters of 2025 was 7.098 billion yuan, a year-on-year increase of 1.89%, while its Q3 revenue was 1.736 billion yuan, down 11.63% year-on-year [16]. - Other notable performances include: - Ruifucheng: Q1-Q3 revenue of 2.138 billion yuan, up 85.3% year-on-year, with Q3 revenue of 819 million yuan, up 123.4% year-on-year [16]. - Marubi: Q1-Q3 revenue of 2.45 billion yuan, up 25.5% year-on-year, with Q3 revenue of 686 million yuan, up 14.28% year-on-year [16]. Medical Aesthetics Sector Performance - The medical aesthetics sector showed slight fatigue but experienced marginal improvements in Q3 2025 [2]. - Notable performances include: - Aimeike: Q1-Q3 revenue of 1.865 billion yuan, down 21.49% year-on-year, with Q3 revenue of 566 million yuan, down 21.27% year-on-year [2]. - Longzi: Q1-Q3 revenue of 4.328 billion yuan, up 0.9% year-on-year, with Q3 revenue of 1.539 billion yuan, up 11.9% year-on-year [2]. Investment Recommendations - The report recommends focusing on companies with a well-established channel and brand matrix, such as Maogeping, Shangmei, and Shanghai Jahwa, which are expected to see high GMV growth [2][20]. - Companies anticipated to show marginal improvements in performance include Proya, Marubi, and Ruifucheng [2]. - In the medical aesthetics sector, the report highlights Aimeike as a key recommendation, with Longzi suggested for further observation [2]. Market Trends - The domestic market share of leading brands is increasing, with the top ten domestic brands capturing 16.6% of the market share in skincare, up from 11.8% in 2023 [4]. - The report notes that the cosmetics retail sales in October 2025 grew by 9.6% year-on-year, indicating a recovery in demand driven by promotional events [10][11].

Investment Rating - The report maintains a positive outlook on the beauty and personal care industry, indicating a "Buy" rating for key players in the sector [2]. Core Insights - The demand side of the beauty industry is showing robust growth, with domestic brands gaining market share and performing well during promotional events like Double 11 [3][4]. - The overall performance of the cosmetics sector is mixed, with some companies showing strong growth while others face challenges [3][4]. - The report highlights the increasing market share of domestic brands, with significant improvements in their competitive positioning against international brands [5][9]. Summary by Sections Industry Overview - The beauty industry is entering a stable growth phase, with domestic leading brands expected to grow during the industry consolidation period [4]. - The retail sales of cosmetics reached 98.2 billion yuan from July to September, showing a high single-digit year-on-year growth, and continued strong performance in October with a growth rate exceeding 9% [3][4]. Company Performance - **Polaire**: For the first three quarters of 2025, Polaire reported a cumulative revenue of 7.098 billion yuan (up 1.89% year-on-year) and a net profit of 1.026 billion yuan (up 2.65%) [18]. - **Ru Yuchen**: The company achieved a revenue of 2.138 billion yuan (up 85.3% year-on-year) in the first three quarters, with a net profit of 105 million yuan (up 81.6%) [18]. - **Marubi**: Reported a revenue of 2.45 billion yuan (up 25.5% year-on-year) for the first three quarters, with a net profit of 240 million yuan (up 2.1%) [19]. - **Shanghai Jahwa**: Revenue for the first three quarters was 4.961 billion yuan (up 10.8% year-on-year), with a net profit of 405 million yuan (up 149%) [20]. Market Trends - The report notes that domestic brands are increasingly capturing market share, with the top ten domestic brands holding five spots and a combined market share of 16.6%, up from 11.8% the previous year [5]. - The cosmetic sector's gross margin continues to improve, although rising sales expenses are impacting net profit margins [3][4]. Investment Recommendations - Key recommendations include focusing on companies with strong channel and brand matrices, such as Mao Ge Ping and Shangmei, and those expected to see marginal improvements in performance, like Polaire and Marubi [3][4]. - In the medical beauty sector, companies with high barriers to entry and strong profitability, such as Aimeike, are highlighted as potential investment opportunities [3][4].