1、 Disclosures&Disclaimer This report must be read with the disclosures and the analyst certifications in the Disclosure appendix,and with the Disclaimer,which forms part of it.Issuer of report:HSBC Qianhai Securities Limited View HSBC Qianhai Securities at:https:/ Equity Research Report Listen to our

2、 insightsFind out moreHSBC Global Research Podcasts 2Q25 results a mixed bag;in 2H25 we expect a decreasing base,new product contributions,and margin improvement Lower our earnings estimates and TP for Proya;lower earnings estimates for Botanee Maintain our ratings for Proya(Buy),Botanee(Hold),and J

3、ahwa(Reduce)1H25 results a mixed bag.According to Wind consensus,of the 13 listed cosmetics companies reporting,eight experienced downward revisions to consensus estimates during the 1H25 earnings season,and five upward revisions.This indicates that the majority of cosmetics companies reported weake

4、r-than-expected 2Q25-1H25 results.For the nine A-share listed companies(see Exhibit 3),their combined revenue and net profit grew 3%and 11%y-o-y in 2Q25,down from 6%and 12%in 2Q24.Outlook for 2H25.For our covered names(Proya/Botanee/Jahwa),we expect their growth pressure to ease slightly in 2H25 on

5、1)a low base in 2H24,and 2)rich new product pipeline and/or continued promotion of products released recently in 1H25.In addition,we expect their net profit margins(NPM)to improve y-o-y in 2H25,mainly thanks to gross profit margin expansion(for Proya and Jahwa)and operating expense savings(for Botan

6、ee and Jahwa).Maintain our ratings for Proya(Buy),Botanee(Hold),and Jahwa(Reduce).In 2Q25,Proyas main brand experienced weaker sales growth,and higher marketing expense for new products and brand promotions offset the GPM expansion from cost savings.We lower our 2025-27 earnings estimates and TP to