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<Research> BofAS Cuts MAO GEPING (01318.HK) TP to HKD105, Cautious on Sustainability of Post-618 Color Cosmetics GMV Growth
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BofAS released a beauty sector report noting that online growth has accelerated from 2Q to date compared with 1Q, mainly driven by a stronger-than-expected start to the 618 shopping festival and the earlier launch of spot sales. During the early stage of last year’s 618 campaign, the model mainly relied on pre-sales and deposit-only payments, which suppressed early GMV. After a weak performance in April this year, online beauty growth re-accelerated to around 11% in May. By category, color cosmetics outperformed skincare in 10 of the past 12 months. Notably, subsidy spending has been more back-end loaded this year, with most of the budget concentrated in the core period of June 16-18. However, given the still subdued consumption environment, the broker remains cautious about the sustainability of growth after the 618 campaign. The broker therefore slightly adjusted its earnings forecasts and revised target prices for the beauty sector. It reiterated a Buy rating on MAO GEPING (01318.HK), citing its unique positioning that better withstands competition, and cut its TP from HKD125 to HKD105. It maintained a Neutral rating on PROYA (603605.SH) due to balanced risk-reward, raising its TP from RMB64.2 to RMB70. It rated SH JAHWA (600315.SH) Underperform given limited earnings visibility, lowering its TP from RMB21.6 to RMB19. (ha/u) Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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