CITIC Securities: Optimistic about domestic cosmetics based on organizational evolution, product enhancement, and marketing operation advantages to increase market share

CITIC Securities pointed out that, based on the selected sample of international beauty and personal care listed companies, the beauty and personal care industry operates with fluctuations on a global scale, and the performance of international brands has shown divergence. Focusing on the China region, almost only L'Oréal has achieved sustained sales growth, while some companies have optimized their operating models after strategic restructuring, but their sales momentum has yet to recover, and some international companies continue to face operational pressure. From a short-term perspective, the operational fluctuations of international brands in the China region provide better growth space for domestic products, especially in the high-end beauty and personal care sector where domestic brands have less presence. In the medium term, the operational fluctuations and divergence of international beauty and personal care companies further illustrate that the beauty and personal care industry requires multi-dimensional comprehensive capabilities in organization, products, channels, and marketing to support growth. Against this backdrop, we remain optimistic about domestic cosmetics increasing market share based on organizational evolution, product enhancement, and marketing operational advantages. We maintain an "outperform the market" rating for the beauty and personal care industry