Huaxi Securities released a research report stating that the cosmetics sector maintained its recovery trend during this year's Double 11 shopping festival, with various platforms implementing multiple measures to stabilize and boost the market. Foreign brands showed improvement, while domestic brands demonstrated steady performance, with leading brands consistently ranking high on major lists. Domestic brands with core technology, unique cultural positioning, and strong branding, product quality, and operational capabilities are expected to outperform amid intense competition.

Key recommendations include: 1) Stable growth brands with solid earnings: MAO GEPING (01318), Marubi (603983.SH). 2) Brands with sustained recovery and margin improvement: Yunnan Botanee Bio-Technology (300740.SZ), Shanghai Jahwa (600315.SH). 3) Brands with core technological advantages and clear long-term prospects: Giant Biogene (02367). 4) Cost-effective daily chemical brands excelling in emerging channels: Runben (603193.SH), DenCare (001328.SZ).

**Market Overview: Steady Growth, Strong Instant Retail Performance** With promotions becoming normalized, platforms extended campaign periods and increased discounts to drive sales. According to Syntun data, total e-commerce GMV during Double 11 reached ¥16.95 trillion, up 14.2% YoY. Major platforms saw significant improvements: - Tmall recorded its best growth in four years, with strong contributions from 88VIP members. - JD.com achieved record-high transaction volume, with user orders up 40% and order volume surging nearly 60%. - Douyin leveraged content and livestreaming synergy, with beauty brands exceeding ¥10M in livestream sales increasing by 313%. Instant retail sales surged 138.4% YoY to ¥67B, driven by e-commerce apps boosting DAU growth. The sector is gaining consumer traction and expanding product categories, indicating strong future potential.

**Cosmetics: Outperforming E-Commerce, Sentiment Rebounds** Syntun data shows beauty and skincare GMV reached ¥99.1B, while fragrance and makeup sales hit ¥33.4B, both growing at double-digit rates, far exceeding the overall market. October sales (Taobao, Douyin, JD) rose 11.7% (skincare) and 10.6% (makeup), signaling a clear industry recovery.

**Brand Performance: Domestic Leaders Strengthen, International Brands Recover** **Tmall:** Proya retained its top position, while MAO GEPING entered the top 20. Domestic brands secured five spots in the top 20, including Winona (No. 8), Chando (No. 19), and Giant Biogene (No. 20). International brands like L'Oréal saw declines, while functional skincare brands such as SkinCeuticals rose sharply. Estée Lauder, SK-II, and others achieved double-digit growth through enhanced promotions and influencer collaborations.

**Douyin:** JMsolution and Proya led the rankings, with domestic brands holding five top 10 spots. In skincare, only HR ranked among the top five foreign brands, while YSL led the makeup category. Domestic brands dominated due to superior operational strategies and marketing adaptability.

**Risks:** 1) Intensified competition; 2) Slower-than-expected consumption recovery; 3) Rising e-commerce traffic costs; 4) Regulatory uncertainties.