瑞银-中国化妆品行业：应对K型分化市场-China Cosmetics Sector Navigating a K-shaped market-20261012

abc

GlobalResearch

12October2026

ChinaCosmeticsSector

NavigatingaK-shapedmarket

Equities

China

LeisureGoods&Services

IngridZhang

Analyst S1460517080003ingrid.zhang@+86-21-38668853

ThisreporthasbeenpreparedbyUBSSecuritiesCo.Limited.ANALYSTCERTIFICATIONANDREQUIREDDISCLOSURES,includinginformationontheQuantitativeResearchReviewpublishedbyUBS,beginonpage26.

Figure1:UBSChinaLeisureandTransportTeam

ChinaCosmeticsSector12October2026本UBS端银2

XinChen

ExecutiveDirector

HeadofChinaLeisure&Transport+86-21-38668864

xin.chen@

ChinaDuty-Free,Lodging,Tourism,andAirports

XinChen

ExecutiveDirector

HeadofChinaLeisure&Transport

+86-21-38668864

xin.chen@

BettyDu

ResearchAssociate

+86-21-38668753

betty-za.du@

WenChen

ResearchAssociate+86-21-38668259

wen.chen@

ChinaCosmetics,MedicalAesthetics,andHPC

IngridZhang

ExecutiveDirector

ChinaBeauty&

LeisureAnalyst

+86-21-38668853

ingrid.zhang@

JunyiZhang

ResearchAssociate

+86-21-38668355

Junyi.zhang@

ChinaLogisticsChinaAirlines

AaronLuo

Director

ChinaTransportAnalyst

+86-21-38668887aaron.luo@

BruceMi

AssociateDirector

ChinaTransport

Analyst

+86-21-38668851

bruce.mi@

Source:UBS-S

ChinaCosmeticsSector12October2026abc3

Figure2:Summaryofratingsandpricetargets

CompanyName

Ticker

MarketCap

(USDm)

Rating

Closeprice

(LC)

PriceTarget

(LC)

26-28EPS

CAGR

2026E

P/E(x)2027E

2028E

PEG

2027E

2026E

EV/EBITDA

2027E

2028E

2026E

ROE(%)2027E

2028E

2026E

FCFYield2027E

2028E

Botanee

300957.SZ

2,098

Neutral

32.69

34.50

10%

22.1

19.3

18.2

1.9

11.3

10.2

9.4

10.0

10.8

10.9

4.7%

4.9%

5.3%

Bloomage

688363.SH

2,511

Neutral

34.64

40.00

12%

43.5

39.5

34.7

3.3

25.2

21.6

19.3

5.3

5.6

6.2

3.0%

2.1%

2.8%

Marubi

603983.SH

1,744

Neutral

28.66

28.20

12%

44.4

37.5

35.5

3.2

31.1

26.2

24.7

7.4

8.6

8.9

2.4%

2.7%

2.9%

Jahwa

600315.SH

1,954

Sell

19.08

14.30

16%

40.4

34.5

30.2

2.2

45.5

37.9

32.5

4.6

5.1

5.6

2.4%

2.5%

2.9%

GiantBiogene

2367.HK

3,256

Neutral

23.08

32.20

7%

11.5

10.5

9.9

1.5

7.0

6.0

5.1

18.2

17.4

16.6

7.2%

9.1%

9.8%

Chicmax

2145.HK

1,113

Neutral

22.04

24.70

8%

16.5

14.5

13.8

1.8

8.8

7.7

7.2

15.9

16.2

15.6

7.6%

4.3%

5.7%

MaoGeping

1318.HK

2,904

Neutral

46.24

50.50

16%

13.7

11.5

10.0

0.7

8.5

6.9

5.6

27.7

26.5

25.1

5.7%

7.1%

8.5%

Shiseido

4911.T

8,309

Neutral

3286.00

3673.50

19%

29.8

23.2

20.9

1.2

10.6

9.3

8.8

7.2

8.9

9.4

3.6%

4.5%

4.7%

Ruoyuchen

003010.SZ

1,207

Buy

25.62

40.90

33%

21.1

15.4

12.0

0.5

17.3

12.6

9.7

44.2

44.4

43.0

2.1%

5.2%

6.4%

Average

15%

27.0

22.9

20.6

1.8

18.4

15.4

13.6

15.6

15.9

15.7

4.3%

4.7%

5.4%

Source:Reuters,Wind,UBS-Sestimates;Note:Priceanddataasof12Oct2026

ChinaCosmeticsSector12October2026abc4

Section1

2025-26recoveryonthemarginamidstructuraldivergence

ChinaCosmeticsSector12October2026abc5

1)Premium:Premiumbrandscontinuetakingshare

Premiumskincareandmakeupgrewstronglyin2025and1H26,drivenbyimprovingsentiment,wealtheffectsandfavourableplatformtraffic;persistentrankinggainsacrosspremiumbrandssuggesttherecoveryisstructural,withpremiumplayersincreasinglygainingsharefromthebroadermarket.

Figure3:Premiummakeupandskincarebrands'TmallGMV(YoY)–strongperformancein2025and1H26

Makeup

120%

YoY2022-24CAGR2025H126

44%

23%

57%

33%

-18%

Guerlain

5%

25%

9%

NARS

-4%

-8%

-29%

YvesSaintLaurentTomFord

-4%

-5%

-1%

10%

27%

5%

Chanel

ShuUemura

Skincare

YoY2022-24CAGR2025H126

-27%

-20%

-16%

1%

-1%

-19%

35%

4%

31%

54%

8%

49%

29%

26%

43%

%

%

EsteeLauder

Lancome

CPB

SkinCeuticals

5%

LaMerSK-II

Source:UBSEvidenceLab:OnlineMarketMonitor

Figure4:Thereboundcanbepartiallyexplainedbythestockmarketwealtheffect

StockMarketPerformanceandtheWealthEffect250

200

150

100

50

Jan-20

Apr-20

Jul-20

Oct-20

Jan-21

Apr-21

Jul-21

Oct-21

Jan-22

Apr-22

Jul-22

Oct-22

Jan-23

Apr-23

Jul-23

Oct-23

Jan-24

Apr-24

Jul-24

Oct-24

Jan-25

Apr-25

Jul-25

Oct-25

Jan-26

Apr-26

Jul-26

0

CSI300STAR50HSCI

Source:Wind

Figure5:Premiumbrandsales'rankingimproving

Premiumcorecohortavgrank(cohortsizeadjusted,festivalpaired)

20222023202420252026

Marginalimprovementwithacolargerslope

D11series:#11.15to#10.31(+0.84positions,mild)

618series:#13.00to#9.23(+3.77positions,monotonic)

D11series-Premiumcorecohortavgrank618series-Premiumcorecohortavgrank

9.09.510.010.511.011.512.012.513.013.5

Source:Beautyinsight,UBS-S

ChinaCosmeticsSector12October2026abc6

2)Premium:Internationalisoutpacinglocal

GlobalbeautyMNCsbegantorecoverfrom2H25through2Q26,whileChineselistedcompanieshavehadamuchweakerandmoreuneventrajectoryoverthesameperiod.Therecoveryisaccruingprimarilytointernationalpremiumbrands,ratherthantothelocalcohortasawhole.

Morenotably,thisweaknesshaspersisteddespiteaclearincreaseinsellingandmarketingintensityacrossthelocalcohortin1H26.

Figure6:ChinasalesperformancerecoveredforglobalbeautyMNCsin1H26

beautyMNCs

Salesgrowthofglobal

15%

10%

5%

0%

-5%

-10%

-15%

-20%

-25%

1Q24

3Q24

2Q24

1Q25

2Q25

3Q25

4Q24

1Q26

2Q26

4Q25

L'Oreal(NorthAsiaLFL)

EsteeLauder(MainlandChinaOSG)

Shiseido(China&TRLFL)

P&G(GreaterChinaOSG)

Source:Companydata,UBS

Figure7:Locallistcos'salesperformancefailedtore-accelerateinstepwithglobalbeautyMNCs

Salesgrowthoflocallistcos

60.0%

50.0%

40.0%

30.0%

20.0%

10.0%

0.0%

-10.0%

-20.0%

-30.0%

-40.0%

1Q242Q243Q244Q241Q252Q253Q254Q251Q262Q26

MarubiBotanee

JahwaBloomage

GiantBiogene(H1/H2only)

Source:Companydata,UBS

ChinaCosmeticsSector12October2026本UBS端银7

3)Premium:Pricingpowerstillworksforpremiumsegment

ASPexplains~50%offoreignbrands'2025growthvariance(R²=0.50),indicatingpricingpowerremainsastrongproxyforbrandequity;premiumforeignbrandsoutperformed,whilemassandnon-premiumforeignbrandslagged,resultingintheforeigntop20trailingthelocaltop

20overall.

Figure8:Regressionscatterofforeign-brandASPvs.2025salesgrowthYoY(onlinechannel)

RegressionofsalesYoYgrowthonASP

70%

60%

50%

40%

30%

20%

10%

0%

-10%

-20%

-30%

-40%

0

■SkinCeuticas

y=0.0007x-0.188

R²=0.5026

■LaRoche-Posay

YvesSaintLaurent.

■LaMer

HelenaRubinstein

SK-II

800900

G

Shiseido

Clarins

Chanel

■Lancome

■GuerlainEstéeLauder

ClédePeauBeauté

400500600700

□Dior

Kiehl's

■L'Oreal.

Olay

NARS

KérastasePantene

100200300

Source:BeautyinSight

Figure9:Sales-weightedYoYgrowthoftop20foreignbrandsonTmall

Brand

Sales(Rmbmn)

ASP

YoY(96)

SalesweightedYoY(96)

HelenaRubinstein

6,746

804.5

31.28%

LaMer

9,093

800.2

59.69%

SK-II

6,932

746.8

28.83%

Guerlain

2,048

496.7

-2.68%

36.90%

Clarins

4,109

486.6

12.71%

skinCeuticals

553

418.7

4899%

Chanel--

3,065

380.3

6.43%

EstéeLauder

9,427

374.6

-0.20%

Lancome

9,631

348.1

2.42%

ClédePeauBeauté

4,060

344.6

-0.93%

YvesSaintLaurent

5,634

326.7

11.30%

Dior

2,472

258.4

-1.91%

Kiehl's

2,937

224.5

-5.42%

NARS

1,797

201.4

-21.88%

-1.04%

shiseido

3,657

186.7

4.50%

Kérastase

3,700

182.1

-23.36%

olay

5,274

179.6

-5.09%

LaRoche-Posay

2,785

129.4

27.25%

L·Oréal

13,112

121.7

-2.39%

Pantene

2,108

64.5[

-28.95%

Source:BeautyinSight,UBS-Sestimates

ChinaCosmeticsSector12October2026abc8

4)Mass:Fadingchannelandingredienttailwinds

Socialmedia,livestreamingandingredient-ledmarketingoncefuelledlocalbrandgains,butwebelievetoughertrafficacquisition,weakerdifferentiationandrisingcompetitionareerodingtheseadvantages.

Figure10:Shorteningsingle-ingredientdividendcycles

Revenuegrowth(%)ofcosmeticsdrivenbyhyaluronicacidandrecombinantcollagen250%

200%

150%

100%

50%

0%

-50%

-100%

5-6year

Growthinthisperiodwasdrivenprimarilyby

anti-HPVbioproteinproducts

3-4year

Bloomage(SkinScienceInnovationandTranslationBusiness)GiantBiogene(Beauty,HealthandFitnessProduct)

JinboBio(TotalRevenue)

Source:Companydata,UBS-S

ChinaCosmeticsSector12October2026abc9

5)Mass:HighASPisnolongerenoughtodrivelocalbrandgrowth

ASPnolongerexplainsgrowthforlocalbrands(R²=0.08).Highpricinghasceasedtobeadefensivemoat,asperformanceisnowdeterminedbyinnovationspeedandexecutionratherthanpricepositioning.

Figure11:Regressionscatteroflocal-brandASPvs.2025salesYoY(onlinechannel)

RegressionofsalesYoYgrowthonASP

100%

80%

60%

40%

20%

0%

-20%

-40%

-60%

Chando

HBN

Pechoin

y=0.002x-0.1632

R²=0.0833

FlowerKnows

FanBeautyDiary

GrainRain

MaoGeping

KANS

Comfy

Proya

Vetes

Winona

TimageFlorasis

ZhibenSimpcareCarslan

RuyiOSM

Amortals

050100150200250

Source:BeautyinSight

Figure12:SalesweightedYoYgrowthoftop20localbrandsonTmall

BrandSales(Rmbmn)ASPYoY(%)

SalesweightedYoY(%)

206.8

187.1

170.5

168.6

151.1

141.4

132.6

105.4

105

100.4

97

94.8

93.2

84.4

76.9

73.1

70.2

60.1

55.1

33.4

3,773

4,129

2,911

10,450

1,349

5,049

2,257

1,787

4,266

1,709

5,060

1,155

11,375

2,532

2,285

3,849

972

876

947

967

36.99%

12.08%

4.18%

-2.66%

44.68%

26.08%

-22.10%

-25.92%

7.61%

50.83%

MaoGepingComfy

HBN

Proya

FanBeautyDiaryGrainRain

Florasis

TimageWinona

FlowerKnows

20.36%

-19.82%

30.35%

-27.14%

-20.53%

92.24%

Chando

SimpcareKANS

OSM

Carslan

Pechoin

-24.01%

-22.83%

5.59%

-40.48%

Ruyi

Zhiben

Vetes

Amortals

14.42%

Source:BeautyinSight,Tmall

ChinaCosmeticsSector12October2026本UBS瑞银10

6)Mass:Whitelabelsareemergingasastructuralcompetitor

Whitelabelsremainthefastest-growingsegment,withcohortGMVup52%YoYandaccountingfor71%ofnewTop-100entrants,suggestingscalegainsmorethanoffsetbrandturnover.Moreimportantly,leadingplayersareevolvingfromtrafi-cdrivenhero-SKUmodelstowardbrandbuilding,whileexpandingintotheRmb80-230ASPrange,bringingthemintodirectcompetitionwithlocallistedbrands.

Figure13:White-labeltier-coremetricbreakdown,2024vs.2025

Metries

Value

White-labelsintop-100,2024

16units

White-labelsintop-100,2025

24units

Netaddition

8units(+50%)

1-yearsuvivalrateof2024white-labels

43.75%

Newwhite-labelentrantsin2025

17units

White-labelsas%ofnewtop-100entrantsin2025

71%

Aggregatewhite-labelGMV,2024

~17.9Rmnbn

Aggregatewhite-labelGMV,2025

~27.2Rmnbn

White-labe/aggregateGMVYoY

52%

White-labe/shareoftop-100GMVchange

From6.6%to94%,+2.8ppts

Source:BeautyinSight

Figure14:White-labelASPthree-tierdistributionmappedagainstkeylocalbrands'ASPs(2025Tmalldata)

350

Pechoin73Timage105

Yoyu33Kans93Rorasis133

Wenboshi

PRAMY

Baiyunshan

Ruyi

BABI

C-Crystal

Kaweido

Xiukefu

DINESSR

Zaowuzhe

50100150

200300

Comfy187MaoGeping207

ASP■Tier1(Rmb30-80)■Tier2(Rmb81-140)■Tier3(Rmb141-280)

Source:BeautyinSight,Tmall

ChinaCosmeticsSector12October2026abc11

Section2

HowbeautycompaniesnavigategrowthchallengesinChina

ChinaCosmeticsSector12October2026abc12

1)GlobalMNCmoatsremaindurable

Premium-focusedportfoliosshouldbenefitfromtherecovery,whilehero-franchiseextensions,long-termbrandbuildingandmechanism-ledR&Dreinforcepricingpower.

Figure15:InternationalMNCsinnovatedaroundheroproductsin1H26

ParentGroup

Brand

ProductName

Price

CoreIngredients/Technology

ClaimedBenefits

IterationUpgrade/CategoryExpansion

EsteeLauder

EsteeLauder

Re-NutrivBlackMythCream

RMB1,980/30ml

Sirtuin™

Repairandanti-aging

Categoryexpansion

EsteeLauder

AdvancedNightRepairRevitalizingEssence

RMB510/100ml

175nmmicrocapsuledeep-deliverytechnology

Deeprepair

Categoryexpansion

LaMer

NewLaMerConcentrateSerum

RMB3,370/30ml

Neuralstress-calmingtechnology

Sensitive-skinrepairandanti-aging

Iterationupgrade

Lancôme

AdvancedGenifiqueIntensiveRepairBalm

RMB780/20ml

Mini-microcapsuleβ-glucoseextract

Emergencyrepair,wrinklereductionandanti-aging

Categoryexpansion

L'Oreal

Lancome

AbsolueMDAge-SpecificSupplementSerum

RMB1,180/50ml;

RMB1,750/50ml

Mito-Pure

Age-specificanti-aging

Categoryexpansion

LVMH

Helena

Rubinstein

6th-GenerationPowercellSerum

RMB1,580/50ml

Nano-scaleseafennelcellextract

Repairandanti-aging

Iterationupgrade

SkinCeuticals

NewlyUpgradedPhytoCorrectiveSerum

RMB650/30ml

PHYTOBOTANICALcomplexwithnewPDRN

Soothing,repairandacnecare

Iterationupgrade

Fresh

NewFreshCrèmeAncienne

RMB1,590/30ml

Chiosgoldenextract

Repairandanti-aging

Iterationupgrade

Guerlain

SuperVRecoveryCream

RMB1,650/50ml

BlackBeedeep-repairtechnology

Nighttimerepair

Categoryexpansion

Shiseido

CPB

NewSculptingCream

Approx.RMB3,280/50ml

Sculptingrevitalizationcomplex

Anti-aging

Categoryexpansion

Chanel

Chanel

N°1deChanelRedCamelliaEmulsion

RMB1,220/100ml

Camelliaresurfacingcompound

Hydration,oilcontrol,firmingandwrinkle

reduction

Categoryexpansion

Source:CosmeticsBusinessOnline

ChinaCosmeticsSector12October2026abc13

2)Localpremiumisationisunlikelytoscalewithinfiveyears

Sub-brandshavestruggledtoestablishameaningfulpresenceatRmb500+priceband,andmoststandalonelaunchesremainbelowRmb100minrevenuescale,constrainedbynon-compressibleheritage,persistentperceptiongapsandweakerpremium-channel,pricing,creativeandR&Dcapabilities.

Figure16:Brandequitybuildcycle–globalpremiumvs.Chinanewpremiumattempts

Brandequitybuildcycle:globalpremiumvs.Chinanewpremiumattempts

30-yearthrehold(1996)

Shiseido(Japan)Albion(Japan)CosmeDecorteSK-II(Japan)

Sulwhasoo(Korea,Amorepacific)

Whoo(Korea,LGH&H)Herbeast

Shuangmei(revival,Jahwa)Wenxian

BIOLAB(Boshe)Aoxmed(Botanee)

154

70

56

46

29

23

8

6

5

4

5

18701890191019301950197019902010

Source:Companydata,UBS-S

Figure17:Locallistcos'premiumself-incubationattempts–casesummary

Brand

Submode

Parent

FoundedTime

Status

Taichi

Premiumsubbrandunderexistingcorebrand

Herborist

~2010s

Limitedprogress

Tang

Premiumsubbrandunderexistingcorebrand

Inoherb

-

Limitedprogress

HBN

Premiumsubbrandunderexistingcorebrand

-

-

Limitedprogress

Aoxmed

standalonenewpremiumbrand

Botanee

2022

＜Rmb100mn

Shuangmei

standalonenewpremiumbrand

ShanghaiJahwa

2020

＜Rmb100mn

BIOLAB

standalonenewpremiumbrand

Yatsen

2021

＜Rmb100mn

Herbeast

standalonenewpremiumbrand

-

2018

＜Rmb100mn

Wenxian

standalonenewpremiumbrand

-

2021

＜Rmb100mn

Source:Companydata,UBS-S

ChinaCosmeticsSector12October2026abc14

Figure18:Age18-24skincarenetspendingfellsharplyto47%from58%

Netspendmorevsless6monthsagobyage

70%

58%

60%

50%

47%

Net%

39%33%

39%

40%

36%

30%

20%

10%

0%

Apr2022'Dec2022'Aug2023'Aug2024'Aug2025'May2026'Surveywave

Age18-24Age25-34Age35-44Age45+

Source:UBSEvidenceLab

Figure19:Age18-24spendingdriversbycategory

Age18–24spend-upreasonsbycategory

0%5%10%15%20%25%30%35%40%

Ipurchasemorepremiumproduct

TherearemoreproductsavailabletobuyIhavemoreneedsfortheseproductsthanbefore

AdditionalstepsinmybeautyroutineIamstilllookingforproductsthatsuitmyneedsIt'seasiertofindproductsIlike

Ihavemoremoneytospend

SkincareMakeupHaircare

Source:UBSEvidenceLab

ChinaCosmeticsSector12October2026abc15

3)Partnershipsmayofferabetterrisk-rewardprofilethanM&A

DurableM&Asuccessrequiresmeaningfulbrandequity,adiversifiedefficacy-ledportfolio,disciplinedtimingandvaluation,capabilityfitandtransfer,andfounderretention.Functionalorwhite-spacecategories—especiallypremiumandupper-masstigehaircare—offerbetteroddsthanlegacyluxury.

Partnershipmodelscanlowerexecutionriskwhilepreservingbrandcontrol,asseeninJuYi–FurtererandAnta–FILAChina.JuYi’sexclusiveChinarightsforFurtererretainIP,R&Dandpricingdisciplineupstreamwhilefocusingthelocalpartneronchannelexecution,localisationandKOLoperations.Anta’sGreaterChinamodelforFILAdemonstratesthatstronglocalexecutioncanscaleapremiumbrandwithoutfullownershipoftheglobalasset.

Figure20:SelectbeautyM&Atransactions–dealtermsandoutcomes(2016-24)

5.4x

7.7x

8.5x

N/A

3.2x

2.5X

N/A

1

2

3

4

5

6

7

$1.45bn

$1.3bn

$845mn

N/A

Rmb535.5mn,Pre-money

valuationRMB1bn

€49.5mn

N/A

100%

100%

100%

Seeleft

51%

90.05%

None

Nov2016

Mar2017

Oct2019

Oct2020-Mar2021

Nov2023

Jul2022

Jan2024

Underpressure

Majorsuccess

Fellshortofexpectations

Onaweakeningtrajectory

Fellshortofexpectations

Inprogress,

groupfinancialsunderpressure

Earlysuccess

EstéeLauder

L’Oréal

Shiseido

Yatsen

Botanee

S'Young

JuYiGroup

TooFacedCeraVe

DrunkElephant

Galénic(90%)andEVELOM(Majority)

Pure&MildplusZaoperatingright

EviDenSdeBeauté

RenéFurterer

(ExclusiveChinalicense)

DealDateAcquirerTargetConsiderationStakeTargetRevenue(atacquisition)ImpliedPSOutcome

2016:~$270mn

CeraVestandalone~$140mn2018:$75mn

N/A

2022:Rmb308mn

2021:€19.7mn

2022:Tmallchannel~RMB280mn

Source:Companydata,UBS-S

Figure21:2025top30brandpricetierdistribution–premiumdominatedbyfewandcrowdedmid-tier

X-axis:ASP(Rmb)vs.Y-axis:2025GMV(Rmb100mn)

40

35

30

25

20

15

10

5

0

MassMasstigePremium

Opportunitypriceband

Kérastase

L'Oréal

Pantene

Head&Shoulders

Schwarzkopf

SpesHexyEHD

ViddalSassoonQiechu

Vites

Adolph

Off&Relax

Ruoyhangfa

BanmuHuatian

Kangwang

Gelasige

Xiaozhai

Shiseido

Bee&

Furterer

Vichy

Flower

Clear

050100150200250

Source:Beautyinsight

ChinaCosmeticsSector12October2026abc16

4)Sustainableoverseasgrowthrequiresmorethanexecution

SkintificdemonstratesthatsuccessfuloverseasexpansionrequiresmorethanChina’smanufacturingadvantages,combiningsupplychainefficiency,localizedproductdevelopment,affordablemasstigepositioning,andcontent-commerceexecutiontoachieverapidgrowthinIndonesia.However,itsrelianceonplatform-drivengrowthandareplicableoperatingmodelenabledadjacentfollowersusingsimilarOEMsuppliersandmarketingplaybookstoquicklygainshare,underscoringthatsustainablelong-termgrowthultimatelydependsondifferentiatedinnovation,localbrandequity,andconsumerloyaltyratherthanexecutionalone.

Figure22:Indonesiaserumandessencecategoryshare–Skintificvs.Indonesianlocalbrands(3Q24)

Indonesiaserum&essencecategoryshare—Skintificvs.Indonesianlocalbrands(3Q24)

12.00%

10.00%

8.00%

6.00%

4.00%

2.00%

0.00%

10.10%

Indonesianlocalscombined:18.50%

insomemonthshaveexceededSkintific

5.90%

6.10%

4.00%

2.50%

SkintificElformulaSomethincY.O.UGlad2Glow

Source:Third-partyShopeetracking,UBS-S

ChinaCosmeticsSector12October2026abc17

Section3

Threeprovenpathstoscale:LessonsfromK-beauty

ChinaCosmeticsSector12October2026本UBS瑞银18

1)PathA:APR-styleorganicbuildisdifficulttoreplicate

APR'sdecade-longfounder-ledexpansion,hardwareandingredientintegration,andglobaldistributiondelivered75%+grossmarginsbutrequiredexceptionaltimeandmarketingintensity.ChineseplayerscanselectivelyadoptdevicesandupstreamIP,butwebelievethefullmodelisunlikelywithinthreetofiveyears.

Social-commerce

AprilskinvwralviaFB/IG/

2017

2014

Figure23:APR's10-yearcompoundingsequence-whypathAishardtoreplicateina3-to5-yearwindow

Hardwarejump

AGE-Rhomebeauty

2021

KOSPIIPO+in-

housePDRN

Verticalintegrationat

rawmateriallayer

2025

2024

USnational

AmazontoUS

Firstowned

2ndbrand

Medicubelaunch

factory

APFactoryGasan

10-yearfounder-ledcategory-extensionsequence

Source:UBS-S

Figure24:APR'sself-builddeliveredstable75%+grossmarginatscaleasatraditionalbeautycompany

APR'sfinancialsfrom2023to2025

1,800

90%

1,600

80%

1,400

70%

1,200

60%

1,000

50%

800

40%

600

30%

400

20%

200

10%

0%

2023

2024

2025

Revenue(Wonbn)

Netprofit(Wonbn)

——Gross

margin(%)——Net

margin(%)

Source:Companydata,UBS-S

ChinaCosmeticsSector12October2026本UBS瑞银19

Figure25:Aggregationdelivershigh-marginscalewithoutowningmanufacturing-Goodai'sasset-lightplatformmodel

2)PathB:Goodai-styleaggregationisthemostactionable

Goodaiscaledan11-brand,asset-lightportfoliothroughdisciplinedacquisitionswhilepreservingbrandautonomy.WethinkChineselistcosshouldtargetpre-breakoutODM-0EMhybridswithrealconsumerinsight,productteamsandSKUiteration,supportedbyscalablesharedinfrastructureandwillingnesstodivest.

Goodai'sfinancialsfrom2023to2025

1,600

70%

1,400

60%

1,200

50%

1,000

800

40%

600

30%

400

20%

200

10%

0%

2023

2024

2025

Revenue(Wonbn)

Netprofit(Wonbn)——

Grossmargin(%)——Netmargin(%)

Source:Compan