Guotai Junan: Double 11 beauty sales surpass expectations, focusing on product potential.

Guotai Junan released a research report stating that the GMV of Double 11 in the 24th year achieved double-digit growth exceeding expectations. It is expected that the beauty market will achieve double-digit growth, continuing the trend of improved demand from the 618 festival. According to data from Qingyan, as of November 11th, the estimated GMV of beauty products in the online channels during Double 11 was 123.78 billion yuan, up 27% year-on-year. The overall performance of the beauty market GMV exceeded previous expectations and continued the trend of improved demand from the 618 festival. It is recommended to increase holdings in: 1) high-speed elastic targets; 2) strong brand momentum leaders; 3) targets expected to bottom out and turn the corner; 4) targets with overseas expansion combined with acquisition catalysts. Key points from Guotai Junan are as follows: Double 11 full network GMV achieved double-digit growth in the 24th year exceeding expectations. According to Xingtu data, the GMV of the full network during Double 11 in 2024 was 1.4418 trillion yuan, up 27% year-on-year (calculated from October 24, 2023 to November 11, 2024 compared to October 24, 2023 to November 11, 2023), with comprehensive e-commerce GMV of 1.1093 trillion yuan, up 20% year-on-year, and live e-commerce GMV of 332.5 billion yuan, up 55% year-on-year. By category, GMV year-on-year growth rates for comprehensive e-commerce in appliances, mobile digital, clothing, beauty and personal care, shoes and bags, food and beverage, computers and office supplies, furniture and building materials, mother and baby toys, sports and outdoor were 27%, 23%, 21%, 23%, 15%, 12%, 7%, 15%, 13%, 19%. Overall, the Double 11 GMV growth rate exceeded market expectations, and it is estimated that due to the prolonged sales periods, subsidies, and large coupons, the competition between platforms remains fierce. It is expected that the beauty market will achieve double-digit growth, continuing the trend of improved demand from the 618 festival. According to Qingyan data, as of November 11th, the estimated online channel GMV for beauty products during Double 11 was 123.78 billion yuan, up 27% year-on-year. The overall performance of the beauty market GMV exceeded previous expectations and continued the trend of improved demand from the 618 festival. It is expected that the recovery in transactions with Tmall, extended promotional periods, and increased bundling ratios are factors influencing this growth. However, it is expected that the return rate will further increase year-on-year due to bundling and platform price comparisons. Platform-wise, it is predicted that Tmall will continue to improve, and Douyin will experience faster growth. Key companies to watch: Proya Cosmetics with a stable main brand and multiple sub-brands performing well, Giant Biogene with outstanding growth for its subsidiaries, and Guangzhou Ruoyuchen Technology with accelerated growth of its flagship home brand products. 1) Proya Cosmetics (603605.SH): Proya Cosmetics' main brand grew by more than 10% on Tmall, over 60% on Douyin, and over 30% on JD, maintaining the top spot in both Tmall and Douyin for beauty products, and the top spot for Chinese beauty products on JD. Cai Tang grew by over 30% on Tmall and JD, but decreased by 30% on Douyin. OR showed high growth rates of over 150% on Tmall, over 450% on Douyin, and over 200% on JD. Yuefuti grew by over 20% on Tmall, stayed consistent on Douyin, and grew by over 80% on JD and over 100% on Pinduoduo. 2) GIANT BIOGENE (02367): The GMV of all channels for Ke Fu Mei increased by over 80%, with over 50% growth on Tmall, over 100% growth on Douyin, over 200% growth on JD, and over 100% growth on VIP.com, maintaining the top spot for facial essence on Tmall. The GMV of all channels for Ke Li Jin grew by over 150%, with over 100% growth on Tmall, over 500% growth on Douyin, over 200% growth on JD, and over 100% growth on VIP.com. 3) Guangzhou Ruoyuchen Technology (003010.SZ): The flagship store of the home brand on Tmall ranked first in the brand list, and ranked 4th in the clothing cleaning category on Douyin. According to data from Chongma, the GMV of the home brand on Douyin during Double 11 was around 60 million yuan, more than doubling, mainly driven by the popular Four Seasons Fuchsia Laundry Detergent with increasing trend in big-ticket items. Risk warning: Decline in industry prosperity; intensification of brand competition; underperformance of new products, etc.