According to reports, Shenwan Hongyuan Group Co., Ltd. has analyzed the performance of the cosmetics and medical aesthetics industry. From July to August 2025, the growth rates of retail sales for cosmetics were 4.5% and 5.1%, outperforming the broader retail market's growth of 3.7% and 3.4%, highlighting the alpha property during the Q3 off-season. Looking ahead to Q4 2025, driven by the Double Eleven sales event and a relatively low comparative base last year, it is expected that retail sales growth for cosmetics will see further improvement. Domestic brands continue to leverage their online channel advantages, consistently achieving top rankings through platforms like Taobao and Douyin in Q3. Notable performances were recorded by MAO GEPING on these channels, aligning with expected outcomes for Q3.

In the medical aesthetics sector, macroeconomic factors are expected to slightly dampen the performance of upstream pharmaceutical and medical equipment markets, as well as downstream institutions. However, the maternal and infant care segment is experiencing increased attention, spurred by national parental subsidies and other favorable factors.

Key observations by Shenwan Hongyuan include:

- The cosmetics and medical aesthetics sectors remain robust in demand. For the period of January to August 2025, the total retail sales of consumer goods reached 32.4 trillion yuan, reflecting a year-on-year growth of 4.6%. Retail sales of cosmetics above the designated size totaled 291.5 billion yuan, marking a growth rate of 3.3%, which was slightly below overall retail growth. Compared to the same period in 2024, which saw a decline of 0.5%, this reflects significant improvement, confirming a steady recovery in consumer demand.

- For July to August 2025, cosmetic retail sales growth was recorded at 4.5% and 5.1%, again outperforming the broader market. This Q3 performance indicates a distinct alpha property. Expectations for Q4 2025 indicate that the growth will be further aided by Double Eleven promotions and last year's low-performance baseline.

- Performance disparities are likely to continue, with strong brands maintaining robust growth in a season typically characterized by slow sales. Data shows that MAO GEPING ranked first in skin care sales on Douyin for Q3, achieving over 2 billion yuan in gross merchandise value (GMV), while sub-brands such as Juguang White also experienced rapid growth.

- Additionally, Ruoyu Chen's beauty health product brand Feicui has shown continued outperforming results, contributing to significant revenue growth in Q3, with its GMV on Douyin exceeding 20 million yuan in a month. Shanghai Jiahua's three major brands combined recorded a GMV growth exceeding 50% through both Taobao and Douyin.

- Marginal improvements in profitability are evident, with companies like Shuiyang Share and Beitaini expected to turn profitable in Q3 following losses in Q4 2024 due to macroeconomic factors and strategic adjustments.

- In the medical aesthetics domain, the overall performance is anticipated to remain slightly lackluster due to economic conditions, with both upstream and downstream exhibits expected to show weak performance. Companies are actively exploring breakthroughs beyond product cycles and enhancing their product matrices.

- The maternal and infant sector equally benefits from favorable governmental policies, with King Baby's robust development and new acquisitions boosting business coverage. It is projected that Q3 profits will increase significantly, with a growth rate around 50%.

Investment targets highlighted include: - For cosmetics: Core recommendations include MAO GEPING (01318), CHICMAX (02145), and Shanghai Jiahua (600315.SH) for their extensive channels and substantial GMV growth. Watch for improving performance in Perlay (603605.SH), Marubi Bio (603983.SH), and others. - For the maternal and infant segment: Focus on SAINT BELLA (02508) and King Baby (301078.SZ). - For medical aesthetics: Emphasize companies with strong R&D and profitability potential, such as AiMeiKe (300896.SZ) with a focus on high-unit products; also consider Longzi (002612.SZ). - E-commerce and personal care brands such as Ruoyu Chen (003010.SZ) and Shuiyang Share (300740.SZ) are also recommended for investment.

Investment risks include less-than-expected consumer spending impacts, high channel costs, intensified competition, reliance on leading influencers, and stricter compliance in medical aesthetics.