1H25子品牌节省的收益；维持买入

1H25earnings saved by sub-brands; MaintainBUY Target PriceRMB129.83(Previous TPRMB133.86)Up/Downside54.9%Current PriceRMB83.83 Proya delivered 1H25 revenue and attributable NP growth of +7.2% and +13.8%YoY respectively,missing BBG consensus by 3%/4%primarily driven bysustained momentum across sub-brands and continued pressure on core brandProya. GP margin improvementwaspartly offset by heavier selling expenseson 618 promotion and sub-brands marketing. The company announced HKlisting plan to accelerate overseas expansion. We trim our TP by 3% toRMB129.83 toreflect lower earnings forecast, based on 30x 2025E P/E,Maintain BUY. China Consumer StaplesMiao ZHANG(852) 3761 8910zhangmiao@cmbi.com.hk Sub-brands growthcushioned pressureofcore brand.Rev. ofcorebrandProya dropped 0.1% YoY in 1H25 on a high base and fiercercompetition.Sub-brandsTIMAGE/OR/ INSBAHAsustained high growth withrevenue up 21/102/80% YoY,withtheir combined revenuecontributionliftedto 20.2%in 1H25, up 4.7pptsYoY. Lookingforward,management has laidout a clear plan to enrich the product matrices across sub-brands:TIMAGEwilliterate base-makeup technologies;OR will focus on anti-hair-losssolutions with aromatherapy concepts; andINSBAHA will deepen nichecolor cosmetics. International expansion is set to accelerate, with ORlaunchesplanned in Hong Kong and Japan and Hapsode rollout inSoutheast Asia. The proposed HK listing shouldalsoprovide capital andbranding support to scale overseas and consolidate the company’s multi-brand advantages.7M25 saleslargelyin line with the industry.In 1H25,offline sales dropped 21.3% YoYwhileonline salesgrew steadily at9.2% YoY(self-operated+4.2% /distribution+25.9%). Basedon our tracked cosmeticsdatabase,Proya’s GMV(covered Proya/Timage/OR)onTaobao&Douyincombinedgrew4%YoY in7M25,slightly slower than industry’s 5%.Cost savings outcome partly offset by rising marketing expenses. Gross margin expanded by3.6ppt YoYto 73.4% in 1H25thanks to costcontrol efforts suchusshifting freebies from “mini” to “mid-size”toreducepackaging&unit marketing costs.SG&Aratio rose by2.6ppt YoYgivenheavier 618 promotionscostand celebrity endorsements for sub-brands.With 2H marketingwilllikely remain elevated around11.11shopping festival,we expect the full-year sellingexpense ratio to trend higher.MaintainBUY.We maintain our BUYrating,withTPcut3% toRMB 129.83, Source: FactSet on30x2025EP/E.Risks:worse-than-expected consumption sentiment,intensifying competition,andrawmaterial price hike etc.Earnings Summary Disclosures& Disclaimers Analyst CertificationThe research analyst who isprimary responsible for the content of this research report, in whole or in part, certifies that with respect to the securities or issuer that the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal viewsabout the subject securities or issuer; and (2)no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific views expressed by that analyst in this report.Besides, the analyst confirms that neither the analystnor his/her associates (as defined in the code of conduct issued by The Hong Kong Securities and Futures Commission) (1) have dealt in or traded in the stock(s) covered in this research report within 30 calendar days prior to thedate of issue of this report; (2) willdeal in or trade in the stock(s) covered in this research report 3 business days after the date of issue of this report; (3)serve as an officer of any of the HongKong listed companies covered in this report; and (4) have any financial interests in the Hong Kong listed companies covered in this report. CMBIGM RatingsBUY : Stock with potential return of over 15% over next 12 months: Stock with potential return of +15% to-10% over next 12 months: Stock with potentialloss of over 10% over next 12 months: Stock is not rated byCMBIGM HOLDSELLNOT RATED :Industry expected to outperform the relevant broad market benchmark over next 12 months:Industry expected to performin-line with the relevant broad market benchmark over next 12 months:Industry expected to underperform the relevant broad market benchmark over next 12 months CMB InternationalGlobal MarketsLimited Address: 45/F,Champion Tower, 3 Garden Road, Hong Kong, Tel: (852) 3900 0888 Fax: (852) 3900 0800CMB InternationalGlobal MarketsLimited (“CMBIGM”) is a wholly owned subsidiary of CMB International Capital Corporation Limited (a wholly ownedsubsidiary of ChinaMerchants Bank) Important DisclosuresThere are risks involved in transacting in any securities. The information contained in this report may not be suitable forthe purposes of all investors.CMBIGM does not provide individually tailored investment advice. This report has been prepared without regard to the individual investment objectives, financial positionor special requirements. Past performance has no indication of future performance, and actual events may differ materially from that