GF Securities Maintains Buy Rating on MAO GEPING (01318) with Fair Value of HK$73.68, Expects Third Quarter Revenue to Rise 22%-24% Year-on-Year

Stock News
11/10

GF Securities has issued a research report maintaining its "Buy" rating on MAO GEPING (01318) with a fair value of HK$73.68 per share. The brokerage forecasts the company to achieve net profit attributable to shareholders of 1.79 billion yuan in 2027.

The company has released its operating conditions and financial performance for the third quarter of 2026, with third quarter revenue expected to grow 22%-24% year-on-year and net profit expected to grow 22%-24% year-on-year, with profit growth accelerating compared to the first half. For the first three quarters, revenue is expected to grow 24%-26% year-on-year, while net profit is expected to grow 20%-22% year-on-year, with the net profit margin remaining stable. The brokerage believes the company has deep brand equity and solid consumer mindshare for its core hero products, and is optimistic about continued growth during the peak season.

The main views of GF Securities are as follows:

Third Quarter Revenue Continues Double-Digit Growth, Profit Margin Remains Stable

The company has released its operating conditions and financial performance for the third quarter of 2026, with third quarter revenue expected to grow 22%-24% year-on-year and net profit expected to grow 22%-24% year-on-year, with profit growth accelerating compared to the first half. For the first three quarters, revenue grew 24%-26% year-on-year, while net profit grew 20%-22% year-on-year, with the net profit margin remaining stable. Against the backdrop of intensifying industry competition, the company's ROI and profitability remain robust, highlighting its professional brand mindshare and channel operation advantages.

Classic Products See Steady Repeat Purchases, New Products Continue to Contribute Incremental Growth

The company continues to refine its product matrix around its foundation makeup strengths, launching "Primer Powder Wear" and "Primer Sunscreen Wear" after "Skin Wear," covering different skin types and pre-makeup needs. In skincare, the company is expanding into repair and premium care scenarios through its Black Cream, Caviar Series, and Radiant Revitalizing Series, driving the extension of its color cosmetics customer base into skincare categories. The Fantasy Flower Realm makeup collection, inspired by panda Huahua, integrates Eastern aesthetics with youthful expression into product design, with new products performing impressively. Combined with stable repeat purchases of classic products, the company continues to enrich its sources of brand growth.

Professional Services Reinforce Brand Mindshare, Omnichannel Operations Enhance Consumer Reach

The company continues to densify its presence in high-tier cities and advance counter upgrades, using professional beauty advisors, makeup trial experiences, and personalized services to strengthen product effect demonstrations and accumulate user trust and brand reputation. On the online front, the company captures consumer demand through content operations and influencer partnerships, and has improved membership points and tier interconnection between Tmall and Douyin, enhancing member interaction and repeat purchases, extending its professional service advantages to omnichannel operations.

Risk Warning

Weak terminal demand; limited offline store expansion; sales falling short of expectations.

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