Optional consumer sectors such as beauty, medicine, gold and jewelry are weakening and internal demand is intensifying. Emotional consumption is leading the market, and the trendy game market continues to expand.
The Zhitong Finance App learned that Guojin Securities released a research report saying that in '24, consumer expectations were cautious. Optional consumer sectors such as beauty, medicine, gold and jewellery weakened, and internal influence intensified, emotional consumption led the market, and the trendy gaming market continued to expand. Looking ahead to 25 years, beauty, medicine, and gold jewelry are expected to continue to be fierce. We can focus on structured investment opportunities — competing for “new,” “different,” and “strong”; driving for “new”; driving for new products; competing for “different” means differentiated competition to meet the needs of target consumers; and competing for “strong” means outstanding comprehensive strength and strong cyclical resistance. Trendy games are in line with emotional consumption trends, and the resonance between supply and demand is expected to continue.
The main views of Guojin Securities are as follows:
Beauty: Involvement intensifies, competition escalates
The sentiment of the industry weakened, and retail sales of cosmetics were outstanding in October, driven by the advance of Double Eleven. According to the National Bureau of Statistics, retail sales of cosmetics grew at -4.5%/+5.1%/-1% in '22/'23/1-3Q24, and the growth rate was zero. 10M24 had a growth rate of 40.1%. Tmall is improving, and the mentality of the big promotion is still strong. The growth rate of Douyin is shifting gears and stabilizing. 1-10M24 Tmall + Douyin skincare & makeup perfume increased 12% year over year, an improvement over 23 single-digit growth. Among them, Tmall surpassed Tmall in the month of the big promotion. In the month of the big promotion, Douyin beauty sales surpassed Tmall, and Tmall maintained a dominant position during the big promotion month.
Skin care: The ingredient party is still leading the market trend. The competitive dimension of brands upgraded to “exclusive ingredients” and brand power, and the restructuring of the collagen circuit showed a high level of prosperity.
Makeup: Domestic brands are moving towards core makeup, and domestic makeup artist brands (Mao Geping/Caitang) have broken through the relatively high barriers of foundation makeup categories such as concealer and highlighter, and the market share of products such as strengthening foundation is expected to increase further in the future.
Investment suggestions: 1) A leader leading industry transformation, promoting exclusive core components/strong brand power, etc.; 2) Giant Biotech (02367), which still has an excellent financial model for high-boom segmentation circuits. 603605.SH
Medical and aesthetic consumables: seize investment opportunities in new products
Consumption of high-end alternatives has been suppressed in the short term. Old customers in medical and aesthetic institutions are resilient, making it more difficult to attract new customers. Passenger flow and customer unit prices are under pressure. Large single products are differentiated due to different life cycles, old hyaluronic acid/regenerative products slow down, and shipments of new recombinant collagen/regenerative products are strong.
Investment advice: Looking ahead to 25 years, recombinant collagen medical and aesthetic injections will be approved at an accelerated pace, and feedback on indications will expand, and I am optimistic about related layout companies such as Giant Biotech.
Trendy game: emotional consumption leads the market, supply and demand boost prosperity
Trendy games are an important expression of emotional consumption. Combining high-quality new IPs, new categories, and new scenarios on the supply side to promote consumption, the resonance of supply and demand is expected to maintain a high boom. Referring to overseas pan-entertainment IP leaders, IP is the basic market for growth. Diversified monetization (new category/new service/new content supply) and overseas search for a second curve are the keys to continuous growth.
Investment proposal: A comprehensive operating platform for the entire trendy toy IP industry chain with multi-category and multi-regional expansion.
Gold jewelry: Fluctuations in gold prices affect sales, increasing the importance of product strength and innovation
The rise in the price of gold jewelry has curtailed enthusiasm for gold jewelry consumption. Since March, the boom has weakened, and “not just needed” consumption has been reduced. Self-wearing is still the main consumption scenario, but compared to '22, it has declined. Ancient French gold and hard pure gold are loved by young consumers because of their beautiful design, and the trend of weight reduction is obvious. Product-oriented brand-driven companies focus on product differentiation. Consumers are more able to accept product premiums, are less sensitive to gold prices, and have had relatively outstanding performance in 24 years; channel-driven companies have poor product differentiation and are greatly affected by industry beta, putting pressure on revenue and profits.
Investment advice: Product brand-driven companies with strong products, high premiums, and low sensitivity to gold prices, focus on Laoshop Gold (06181) and Chaohongji (002345.SZ).
Risk warning: New product/marketing/Douyin channel development falls short of expectations, customer churn brings short-term performance fluctuations, franchise expansion/terminal retail falls short of expectations, gold prices fluctuate sharply, and industry competition intensifies.
