According to the Zhitong Finance APP, China Merchants Securities released a research report stating that the performance differentiation in the cosmetics sector will continue in 2024 and Q1 2025. Leading domestic brands are still achieving good growth due to advantages such as cost-effectiveness, differentiated products and positioning, a single product strategy, and refined online operations. The personal care sector performed notably well in Q1 2025, with leading domestic brands showing stronger performance due to product upgrades and channel expansion. Looking ahead to Q2, the 618 shopping festival is expected to further catalyze the growth of domestic brands. In the cosmetics sector, it is recommended to continue focusing on Marubi (603983.SH), Giant Biogene (02367), MAO GEPING (01318), and Runben (603193.SH); in the personal care sector, it is recommended to continue focusing on BAIYA CORPORATION (003006.SZ), Dencare (001328.SZ), Wondfo (300888.SZ), and Haoyue Nursing (605009.SH).
<h2>The main viewpoints of China Merchants Securities are as follows:</h2>
Cosmetics: Performance differentiation continues in 2024 and Q1 2025, leading domestic brands still achieve good growth
In 2024, key companies in the Hong Kong stock market are expected to see rapid growth in both revenue and profit, with MAO GEPING's revenue/net profit increasing by +35%/+33%, Giant Biogene +57%/+42%, and Shangmei's +62%/+69%. These three companies represent new positioning (mid-to-high-end skincare + makeup), new ingredients (recombinant collagen), and new marketing and cost-effectiveness (Douyin + gift boxes), which are three important growth paths for current domestic beauty brands.
Among A-share companies, Marubi and Runben are expected to see stable growth in 2024 and Q1 2025; Proya's revenue growth has slowed significantly, but it shows strong resilience in profits, with good gross margin and expense control; Huaxi Bio, Betaini, and Shanghai Jahwa are experiencing performance declines/losses, with Shanghai Jahwa's losses in 2024 mainly due to strategic adjustments and large goodwill impairment provisions. In terms of profit margins and expense ratios, most key companies have seen improvements in gross margins and sales expense ratios. Overall, most companies maintain stable or declining gross profit margins and net profit margins, with Proya showing a noticeable improvement in Q1 2025.
Q2 focus on promotional catalysts, leading domestic brands expected to maintain high growth
The Tmall 618 pre-sale started on May 13, a week earlier than last year. According to the first-day pre-sale rankings disclosed by Tmall, the overall performance of domestic beauty brands in 2025 shows an upward trend compared to 2024, with Proya maintaining the first place, Kefu Mei rising from sixth to third, and MAO GEPING ranking eleventh in its first appearance.
China Merchants Securities stated that, as expected, the domestic substitution is deepening further, and leading domestic brands have: 1) Price advantages, as most domestic brands are positioned for the mass market, with price ranges below 300, showing clear cost-effectiveness advantages compared to international mid-to-high-end brands; 2) Ingredient innovation, with new ingredients such as recombinant collagen and cyclic peptides becoming new market hotspots, and domestic brands seizing the opportunity; 3) Efficient operations on online platforms such as Douyin and Tmall. Under comprehensive driving forces, it is still expected to achieve rapid growth while maintaining good momentum in the current rising brand growth cycle.
It is recommended to focus on Giant Biogene (02367) and Marubi (603983.SH), which have a single product logic and new ingredient backgrounds, MAO GEPING (00170) with differentiated positioning and strong brand power, and Runben (603193.SH), which stands out in the summer peak season with new products and product cost-effectiveness
Personal Care: Leading Domestic Brands in 2024 &amp; Q1 2025 Show Strong Performance Through Product Upgrades and Channel Expansion
From the revenue perspective, thanks to resilient demand, major personal care companies are expected to maintain year-on-year revenue growth in 2024, with Q1 2025 showing overall impressive revenue performance. In Q1 2025, BAIYA CORPORATION / Wenjian Medical / Haoyue Nursing / Keli Co., Ltd. / Dencare achieved year-on-year revenue growth of 30% / 36% / 42% / -1% / 19%, respectively. Domestic brands are performing stronger than OEM companies due to brand momentum, product upgrades, and online channel expansion.
There is a divergence in profit growth trends: BAIYA CORPORATION's high revenue growth and optimized gross margin led to a continued rapid increase in net profit attributable to the parent company in 2024, with Q1 2025 achieving an unexpected year-on-year net profit growth of 27% after reducing expenses; Dencare's high-end product offerings and rapid online growth have steadily boosted performance, with year-on-year net profit growth of 14% / 16% in 2024 / Q1 2025; Wenjian Medical's revenue growth in 2024, scale effects, and reduced goodwill impairment contributed to double-digit year-on-year profit growth.
Online Expansion and Mid-to-High-End Branding Trends Remain Unchanged, Each Personal Care Company Has Its Highlights
Sanitary Napkin Industry: Domestic brands are more aggressive in marketing investment, with richer product innovation and promotional packages, and stronger multi-platform operational capabilities, expected to benefit significantly from the 618 shopping festival. It is recommended to continue focusing on BAIYA CORPORATION (003006.SZ) (successful nationwide offline expansion, major products driving product structure upgrades, e-commerce gradually shifting to profit orientation), Wenjian Medical (300888.SZ) (equity incentive plan leading, effects of consumer goods business reform gradually emerging, brand momentum increasing), and Haoyue Nursing (605009.SH) (gradual improvement in demand from main OEM clients, and the consolidation of Jieting's efforts in the sanitary napkin self-owned brand).
Oral Care: Consumers are increasingly demanding efficacy care based on basic cleaning, creating development opportunities in niche segments. Dencare is expanding its online platform through Douyin and feeding back into offline channels, with continued realization of product research and development benefits from major products, driving performance growth in Q4 2024 and Q1 2025 through channel expansion and product upgrades. It is recommended to pay attention to Dencare (001328.SZ).
Risk Warning
Risks of promotional sales falling short of expectations, risks of online emerging channel expansion not meeting expectations, risks of intensified competition among enterprises, risks of marketing investment effectiveness not meeting expectations, risks of new product research and development and sales not meeting expectations

01318

001328

603983

003006

02367

CITIC Securities released a research report indicating that the performance differentiation in the cosmetics sector will continue in 2024 and Q1 2025, with leading domestic brands achieving good growth through cost-effectiveness and product upgrades. The 618 shopping festival is expected to further catalyze the growth of domestic brands, and it is recommended to pay attention to cosmetics companies such as Marubi, GIANT BIOGENE, and MAO GEPING, as well as personal care brands like BAIYA CORPORATION and Dencare. Overall, leading domestic brands are performing strongly in the market

Zhitong

MAO GEPING

Dencare

Marubi

BAIYA CORPORATION

GIANT BIOGENE

Proya

CMSC

Haoyue Care

Shanghai Jahwa

Coco Healthcare

ByteDance

BABA-W

Bloomage Biotech

Winner Medical

CITIC Securities: The 618 promotion is expected to further catalyze the growth of domestic products, focusing on opportunities in the cosmetics and personal care sectors