Shenwan Hongyuan: It is expected that the overall performance of the cosmetic medical beauty industry in Q3 2025 will meet expectations, with a continued upward trend in Q4

According to Zhitong Finance APP, Shenwan Hongyuan released a research report stating that in July-August 2025, the retail sales growth of cosmetics was 4.5%/5.1%, outperforming the overall retail sales growth of 3.7%/3.4%. The Q3 off-season highlights the alpha attributes. It is expected that in Q4 2025, driven by the Double Eleven shopping festival and the dual benefits of a relatively low base compared to the same period last year, the retail sales growth of cosmetics will increase again. Domestic brands are steadily leveraging their advantages in online channels, with Taobao and Douyin continuing to dominate the rankings in Q3. The performance of MaoGeping on Taobao and Douyin is impressive, and Q3 performance is expected to meet expectations. In the medical beauty sector, influenced by macroeconomic factors, both the upstream pharmaceutical and medical device sectors and the downstream institutional sectors are expected to show slight weakness. Additionally, the maternal and infant sector is gaining attention due to β factors such as national childcare subsidies.

Shenwan Hongyuan's main points are as follows:

Cosmetics and Medical Beauty Sector: Demand Side is Stable, July-August Cosmetics Retail Sales Growth Outperforms the Market

From January to August 2025, the total retail sales of consumer goods reached 32.4 trillion yuan, a year-on-year increase of 4.6%. Among them, the retail sales of cosmetics above the designated size totaled 291.5 billion yuan, a year-on-year increase of 3.3%, slightly underperforming the overall retail sales market. However, compared to the -0.5% in the same period of 2024, there is significant improvement, confirming the overall stable recovery of the demand side. Specifically, in July-August 2025, the retail sales growth of cosmetics was 4.5%/5.1%, outperforming the overall retail sales growth of 3.7%/3.4%, highlighting the alpha attributes in the Q3 off-season. It is expected that in Q4 2025, driven by the Double Eleven shopping festival and the dual benefits of a relatively low base compared to the same period last year, the retail sales growth of cosmetics will increase again.

Sector Performance Expected to Continue to Differentiate, Strong Players Maintain High Growth in Q3 Off-Season

Domestic brands are steadily leveraging their advantages in online channels, with Taobao and Douyin continuing to dominate the rankings in Q3. According to data from Chanmama/Mojing, Han Shu ranked first in GMV on Douyin's skincare sales list in Q3, achieving over 2 billion GMV, with sub-brands such as Jifang, Anmiyou, and Juguangbai also rapidly increasing their volume. Ify Chen's beauty and health products continue to exceed expectations, driving rapid revenue growth in Q3, with Douyin channel's Ify Chen achieving a single-month GMV exceeding 200 million yuan, showing continuous upward momentum and breaking through category boundaries. Shanghai Jahwa's three major brands achieved a combined GMV growth of over 50% on Taobao and Douyin in Q3, with major products like Liushen's mosquito repellent egg, Baicaojiyu's new skincare oil, and Yuze's spokesperson Fan Zhendong contributing to high revenue growth in Q3. MaoGeping's performance on Taobao and Douyin is impressive, and Q3 performance is expected to meet expectations.

Significant Trend of Marginal Improvement in Performance, Q3 Year-on-Year Turnaround to Profit, Shuiyang Co., Ltd., BTN and Other Companies Embrace New Journey

In Q3 2024, due to macroeconomic reasons combined with strategic adjustments, some companies faced losses. Since 2025, with improvements in macro trends and initial results from strategic transformations, Shuiyang Co., Ltd., BTN, and other companies have shown significant quarter-on-quarter improvements, and it is expected that they will turn a profit in Q3 2025. Meanwhile, Shuiyang Co., Ltd. has initially formed a high-end brand matrix, with Ify Dan's online and offline GMV growing rapidly, and PA+RV building a second growth curve, indicating broad prospects for future performance and stock price. BTN's collaboration with multiple brands for Double Eleven with Li Jiaqi is expected to continue marginal improvement in performance in Q4 The medical beauty sector is affected by macroeconomic factors, with both upstream pharmaceutical and device sectors and downstream institutions expected to perform slightly weakly.

Affected by macroeconomic conditions, competitive landscape, and product cycles, Aimeike is expected to have weak performance in Q3. The company is breaking through product cycle limitations and enriching its product matrix through internal research and external procurement, lying in wait for opportunities. The performance of institutions is differentiated, with heavy medical beauty monetization being poor, while light medical beauty, especially the cost-effective model represented by Xinyang, is recognized by consumers. It is expected that cost-effective light medical beauty will become the main force for opening stores in the future.

The maternal and infant sector is catalyzed by national childcare subsidies and other β factors, leading to increased attention.

Kid Kingdom's main business is developing steadily, and the acquisition of Siyi Hair Care and other businesses has enriched its coverage. It is expected that profits will significantly increase in Q3 2025, with an expected growth rate of 50%. Meanwhile, the high-end confinement service Shengbeila's performance in H1 2025 meets expectations, with the number of new stores slightly exceeding expectations. Q3 is expected to develop steadily, helping the company achieve its annual profit target smoothly.

Regarding the targets

Cosmetics: Core recommendations: 1) Brands with a complete channel/brand matrix and high GMV growth such as Mao Ge Ping (01318), Shangmei Co., Ltd. (02145), Shanghai Jahwa (600315.SH); 2) Expecting marginal improvement in performance growth for Proya (603605.SH), Marubi Biotechnology (603983.SH), Runben Co., Ltd. (301459.SZ), Juzi Biotechnology (02367), BTN (300957.SZ), and Bloomage Biotech (688363.SH). 3) Maternal and infant sector: Shengbeila (02508), Kid Kingdom (301078.SZ), recommended to pay attention to: Different Group (06090).

Medical beauty: Focus on upstream companies with high R&D barriers and strong profitability, particularly those driven by big products and with a wide product pipeline; recommended: Aimeike (300896.SZ); suggested to pay attention to: Langzi Co., Ltd. (002612.SZ). E-commerce agency + personal care private brands recommended: RuYuchen (003010.SZ), SYG (300740.SZ), suggested to pay attention to: YiWangYiChuang (300792.SZ), Qingmu Technology (301110.SZ).

Risk Warning

The effect of boosting consumption may be less than expected; high channel costs; intensified competition; reliance on top influencers; stricter compliance in medical beauty