MAO GEPING (01318) has received an "Outperform" rating with earnings forecasts maintained for FY25-26. The current stock price corresponds to 25-26x P/E ratios of 41x/31x. The target price of HK$127 represents 25-26x P/E ratios of 50x/38x, indicating 22.5% upside potential.
Recent post-earnings investor communications revealed strong progress across multiple fronts. The company's product category expansion is proceeding smoothly, with Q3 seeing the launch of new skincare products in the Spark Origin series, supplementary color cosmetic items, and well-received new fragrance products. Channel-wise, offline expansion includes entry into premium counter locations, while online channels maintain high growth momentum. Additionally, the company is establishing its international presence, opening up medium to long-term growth opportunities.
**Skincare Product Matrix Continues to Expand, New Fragrance Products Receive Positive Market Response**
The company has built MAO GEPING's brand recognition around Eastern aesthetic concepts, facilitating successful category extensions. 1) Skincare: The product matrix of serums and creams continues to expand. 1H25 saw the launch of Black Gold Water, with the entire Black Gold series gradually gaining traction. September witnessed the introduction of the new Spark Origin series, targeting compound early-aging issues specific to Eastern skin types, supplementing the mid-to-high-end price segment with anti-aging creams, serums, lotions, and essence waters. 2) Cosmetics: Color product offerings have been enriched, with 1H25 launching new Star Dome eyeshadow and Q3 introducing new earth-tone eyeshadow series. 3) Fragrance: 13 new products launched in May continued to experience supply shortages in July-August, demonstrating strong market reception.
**Offline Entry into Premium Counters Validates Brand Momentum Strengthening, Online Young Consumer Segment Breakthrough Successful**
1) Offline: Following 1H25 entries into Beijing SKP and Hangzhou Lakeside Pedestrian Street, new counter openings are expected at Hangzhou MixC in 2H25, with gradual planning underway for Shenzhen MixC, Hang Lung, and Swire properties. Same-store growth significantly outperformed the offline market average at approximately 18% in 1H25, demonstrating outstanding advantages in product strength, offline service systems, and membership operations capabilities. Q3 offline performance has met company expectations. 2) Online: Self-broadcasting and influencer broadcasting structures remain balanced and healthy. Since the beginning of the year, the company has continuously engaged young online consumer segments through events such as the Sanya Base Makeup Festival and Super Brand Day. According to monitoring data, combined Tmall and Douyin GMV for MAO GEPING increased 47% year-over-year in July-August, maintaining high growth momentum.
**International Brand Expansion Layout, Optimistic About Growth Opportunities as Rare Premium Domestic Beauty Group**
The company has already entered Sephora in Hong Kong and expects to open its first counter at Harbour City in Hong Kong in October. Starting from 2026, expansion into Southeast Asia, Japan, and European-American markets is anticipated. The outlook remains positive for the company's growth certainty and broad opportunities as a rare high-end domestic beauty group.