Guide to this report: Strengthen dominant channels, increase emerging channels, and drive a recovery in revenue growth through channel optimization. The optimization of advertising has led to a sharp drop in sales expenses, and profit growth has exceeded expectations. The product and brand matrix is expected to continue to be enriched, driving continued growth. Key investment points: Investment suggestions: Channel and efficiency optimization to accelerate growth, brand upgrading, high-end and rejuvenation. Maintain the 2018-2020 EPS of 0.92/1.11/1.32 yuan, maintain the target price of 27.59 yuan, and increase the holdings. The performance growth rate increased quarter by quarter, and the performance exceeded expectations. 2018H1's revenue/net profit was 442/083 million yuan, up 2.78% year on year (growth rate +14.43 pct year on year)/57.84% (growth rate +70.11 pct year on year), net profit after deducting non-return mother increased 65.94%, showing an inflection point in performance. 2018 Q2 revenue/net profit increased 13.31%/104.75% year on year. The category change caused gross margin to drop slightly by 0.38 pct to 59.77%. However, due to the shift from hard marketing to social e-commerce, etc., the advertising cost ratio dropped sharply by 6.79 pct, and the net margin increased 6.59 pct to 18.90% year on year. Strengthen superior channels, increase emerging channels, and continue to advance channel optimization. 2018H1's strong channel KA channel revenue increased 10.33% year-on-year, accounting for 30.42%. At the same time, the company is focusing on promoting sales for offline CS and online mainstream and emerging e-commerce channels. It participated in Suqian Baibao (20%) and Honey Makeup Information (26.8%). 2018H1 Suqian Baibao's revenue/profit was 192 million yuan/14.82 million yuan, and Honey Makeup revenue/profit was 942/3.71 million yuan. The product and brand matrix is constantly being enriched, and the brand is being upgraded to younger and more high-end. On the one hand, the company consolidated its original brand market position, and on the other hand, further expanded the product line matrix by acting as an agent for imported products such as “Reboxi” and “Delper” and information on participating in honey makeup. Among the main brands, Midos 2018H1, which is positioned as the middle and high-end, achieved revenue of 964.06 million yuan, an increase of 32.48% over the previous year, accounting for 21.83%. Sales of the agent imported brand “Mansna” increased significantly, and revenue increased by 502.24% and 18.42% year on year. Risk warning: economic decline inhibits consumption; industry competition intensifies; new product promotion costs increase, etc.