Shenwan Hongyuan Group Co., Ltd. released a research report indicating that the retail sales growth rate of cosmetics outperformed the broader market in January-February 2026, with year-on-year growth momentum remaining largely stable, reflecting the industry's steady development. In the cosmetics sector, brand-side revenue and profits showed steady growth, while the manufacturing side exhibited marginal improvement. E-commerce outsourcing services attracted significant attention, with related companies expected to achieve high profit growth. In the medical aesthetics sector, both upstream and downstream performance is projected to be slightly weaker due to macroeconomic factors. In the future, cost-effective light medical aesthetics are expected to become the main driver for new clinic openings by institutions. Shenwan Hongyuan's key views are as follows:
Cosmetics and Medical Aesthetics Sector: Steady demand-side growth; cosmetics retail sales growth outperformed the broader market in January-February 2026. Total retail sales of consumer goods reached 8.61 trillion yuan in January-February 2026, a year-on-year increase of 2.8%. Within this, retail sales of cosmetics above the designated size amounted to 75.3 billion yuan, up 4.5% year-on-year, outperforming the overall retail sales growth by 1.7 percentage points. Compared to the 4.4% growth rate in the same period last year (January-February 2025), the growth momentum remained largely stable, confirming the industry's steady development trend.
Cosmetics: Brand-side revenue and profits show steady growth, manufacturing side exhibits marginal improvement. 1) Ruoyuchen: The acquisition of the international high-end brand Erno Laszlo has enhanced its brand portfolio. The beauty and health supplement brand Feicui continued to exceed expectations, contributing to the company's high revenue growth in Q1. Feicui's GMV on Douyin saw triple-digit growth in Q1, with upward momentum and continuous category expansion. 2) Shanghai Jahwa: The combined GMV of its three major brands on Taobao and Douyin achieved high growth in Q1. Key products such as Liushen's mosquito repellent eggs, Herborist's new herbal oil, and Dr.Yu's dry-sensitive and oil-sensitive creams drove significant revenue growth. 3) Runben Co., Ltd.: Demonstrating strong market insight, the company continues to launch new products based on market demand. The egg yolk oil cream was the core product for autumn and winter. The sunscreen series introduced a children's water-based sunscreen gel, which is gentle and lightweight, adding a strong contender in children's sun protection. To expand its consumer base, the company also launched an oil-control and acne-fighting series targeting teenage skin. 4) QingSong Co., Ltd.: The mask business serves as the core growth pillar, with strong growth certainty driven by high margins, strong technical barriers, and returning orders from international clients. The skincare business focuses on high-growth segments such as efficacy skincare, oil nourishment, sun protection, and single-use essences, building a second growth curve.
E-commerce outsourcing services attract high attention; companies like Yiwangyichuang and Qingmu Technology are expected to achieve high profit growth. Due to plateauing e-commerce traffic and brands' increasing self-operation, the outsourcing sector entered a performance downturn after 2020. After several years of adjustment, companies including Yiwangyichuang and Qingmu Technology have collectively entered a reversal phase. Yiwangyichuang utilizes AI+ to enhance cost efficiency and efficiency, with GEO unlocking performance potential; Q1 2026 profit growth is projected at 30%. Qingmu Technology collaborates with trendy toy brands and develops its own brands; Q1 2026 profit growth is also estimated at 30%.
Medical aesthetics sector affected by macroeconomic factors; both upstream and downstream performance expected to be slightly weaker. Increased supply of pharmaceutical devices is expected, with more new products anticipated to drive consumer interest in the latter part of 2026. IMEIK Technology Development Co., Ltd. experienced slightly weaker performance in 2025 due to macroeconomic conditions, competitive landscape, and product cycle factors. In Q1 2026, the company's transformation efforts are expected to show initial results, with revenue recovering to double-digit growth. Subsequently, through internal R&D and external acquisitions, it aims to break through product cycle limitations, enrich its product portfolio, and prepare for a rebound. The institutional side is still in a recovery phase, with light medical aesthetics, particularly cost-effective models represented by SoYoung, gaining consumer acceptance. Cost-effective light medical aesthetics are projected to become the main driver for new clinic openings. Langzi Holding Co., Ltd. is expected to achieve double-digit growth in both revenue and net profit attributable to shareholders through improved internal operational efficiency and recovery in its high-end women's apparel segment.
Investment Analysis Recommendations: Cosmetics: Core recommendations: 1) Companies with well-established channels/brand portfolios and high GMV growth: MaoGeping, Shanghai JMU Co., Ltd., Shanghai Jahwa. 2) Companies expected to show marginal improvement in earnings growth: Proya, Marubi, Runben Co., Ltd., Genscript Biotech, Botanee, Bloomage BioTechnology. 3) Mother and baby sector: SANPELLE, Kidswant.
Medical Aesthetics: Focus on upstream companies with high R&D and certification barriers and strong profitability; prioritize companies driven by key products and with broad product pipelines. Recommendations: IMEIK Technology Development Co., Ltd., Langzi Holding Co., Ltd.
E-commerce outsourcing + personal care own brands: Recommendations: Ruoyuchen, Yiwangyichuang, Shu Yang Co., Ltd., Qingmu Technology.
Risk warnings: Consumer stimulus measures may fall short of expectations; high channel costs; intensifying competition; reliance on top live-streamers; tightening regulatory compliance in medical aesthetics.