Zhongtai: Overseas mapping product upgrades and increased competition 25Q3 domestic personal care manufacturing going global accelerate

Zhongtai released a research report stating that the competition in the North American personal care market intensified in 25Q3, with Procter & Gamble's profitability outperforming its revenue, and Kimberly-Clark's transformation improving efficiency. In the domestic market, upstream supply chain companies Yanjiang, Jieya, and Nobang saw growth of 17%, 107%, and 23% respectively in 25Q3, accelerating revenue growth and preliminary validation of overseas orders. However, due to industry competition, personal care companies increased sales expenses, resulting in weaker profit growth in the first three quarters than revenue. Considering adjustments in e-commerce strategy, brand profitability is expected to recover in Q4. From an investment perspective, based on the upgrade trend of overseas disposable hygiene product industry under the impact of international brands + demonstration effect of industry giants + overseas production capacity & local supply barriers, the prospects of the upstream non-woven fabric supply chain targets are expected to reverse the predicament. Key points from Zhongtai are as follows: Overseas: Procter & Gamble's profitability outperforms its revenue, and Kimberly-Clark's transformation improves efficiency, intensifying competition in the North American personal care market. Procter & Gamble: Better profitability, financial reports reflect increased competition in domestic sanitary napkins and North American diapers. In FY26Q1, Procter & Gamble's global revenue was $22.39 billion, and net profit was $4.75 billion, up +3% and +20% year-on-year respectively. Focusing on the personal care sector, 1) Baby care products: Low single-digit growth in FY26Q1, achieving positive growth in FY26Q1 after declining in the 25 fiscal year, successful product strategy in Greater China, while North American business remains under pressure. 2) Female care products: Declining sales in Greater China, with increased market competition. Overall revenue decreased by low single digits in FY26Q1, with core sales affected by declining sales in Greater China and the IMEA region. Kimberly-Clark: Transformation adjustment, revenue turning positive. In 25Q3, revenue was $4.15 billion, and net profit was $450 million, up +0.1% and -50.8% year-on-year respectively. Net profit was affected by transformation plans and a high base, excluding the above effects, Q3 profits were basically flat year-on-year. 1) Focus on the personal care sector: decline in baby and female care business revenues narrowed. In 25Q1-3, Kimberly-Clark's baby/female care revenues were $5.09 billion and $1.29 billion, down -4.1% and -2.4% year-on-year, with a narrowing decline in Q3. 2) International market achieved positive growth in Q3, while North American market decline narrowed. North American Q3 revenue declined by 0.8% in a single quarter. Operating profit fell by 0.2%. International personal care market saw a 1.9% increase in Q3 revenue and a 6.5% increase in operating profit. Domestic: Supply chain overseas orders increase, bottom reversal; intense competition on the brand side. Upstream supply chain: Non-woven fabric companies see revenue growth accelerating and bottom reversal, with accelerated overseas expansion. Yanjiang, Jieya, and Nobang grew by 17%, 107%, and 23% respectively in 25Q3, with revenue growth speeding up and preliminary validation of overseas orders. In 25Q3, Yanjiang, Jieya, and Nobang grew by 209%, 336%, and 21% respectively, with the opening of overseas market space and profitability better than domestically. Downstream brands: Intense competition in the short term, profitability under pressure. In 25Q3, Winner Medical, Baiya, Dengkang, Runben, Jierou, and Haoyue saw revenues grow by 27.7%, 8.3%, 10.5%, 16.7%, 11.1%, and 31.6% respectively year-on-year, with net profits of +42.1%, -3.9%, +11.4%, -2.9%, +335%, and -45%. Due to industry competition, personal care companies increased sales expenses, resulting in weaker profit growth in the first three quarters than revenue. Considering adjustments in e-commerce strategy, brand profitability is expected to recover in Q4. Investment recommendations: Upgrade of global disposable hygiene material surface materials, moving from "internal roll" to "outer roll," and acceleration of non-woven fabric manufacturing overseas Based on the trend of upgrading the overseas disposable hygiene product industry under the impact of international brands + demonstration effect of industry giants + overseas production capacity & local supply barriers, the upstream non-woven fabric supply chain targets are expected to reverse the predicament. 1) Manufacturers with rare completed global supply chain layout in the industry, under the trend of major upgrades in overseas sanitary napkin and diaper materials, it is recommended to actively focus on Xiamen Yanjan New Material (300658.SZ); and 2) Tangling Jieya Biologic Technology (301108.SZ), benefiting from outsourcing of non-core businesses and increased orders in the wet wipes business; 3) Winner Medical (300888.SZ), with diversified business volume, reform efficiency, and stable profitability. Risk warning Significant increase in raw material prices; fluctuation in tariff policy; outdated information in the research report; intensified competition.