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TECHTRONIC IND(669)
Analysis：
Techtronic Industries delivered a robust performance in the first half of 2025, achieving a record-breaking sales revenue of US$7.8 billion, up 7.5% in local currency terms and 7.1% in reporting currency terms. During the period, the MILWAUKEE business grew by 11.9%, while RYOBI saw an 8.7% increase. Non-core business sales strategically declined compared to the first half of 2024, as the group focused on executing its business plan to streamline its product portfolio and enhance profitability in these areas. By region, North America recorded an 8.1% sales growth, Europe saw a strong 10.4% increase, while other regions experienced a 3.4% decline.
In the first half of 2025, the gross margin improved by 34 basis points to 40.3%, primarily driven by the group’s focus on enhancing consumer brand profitability, improving operational efficiency, the positive impact of the high-margin MILWAUKEE business growth, and increased productivity across its production and procurement network. As a percentage of sales, total selling, general, and administrative expenses decreased by 18 basis points to 31.3% compared to the first half of 2024, reflecting the group’s emphasis on optimizing and reducing non-strategic administrative expenses while investing in research and development, new product development, and commercialization.
The group’s first-half net profit rose 14.2% to US$628 million, with earnings per share increasing 14.1% to 34.37 US cents. It also recorded a positive free cash flow of US$468 million, ending the period in a net cash position, enabling continued investment and business expansion while navigating macroeconomic changes. Looking ahead, the group will continue to pursue three key initiatives: growing existing businesses and verticals, exploring new businesses and verticals, and expanding global market coverage. Currently, the group’s core verticals span multiple industries, including mechanical, electrical, plumbing, renovation, public utilities, transportation maintenance, general contracting, landscaping, energy, and mining, each encompassing sub-sectors with unique applications and needs. Close collaboration with these users helps the group identify solutions to customer challenges and develop practical, innovative products. The group’s growth extends beyond verticals to cross-border opportunities, with mining in regions like Australia and Latin America, which have global influence, aiding faster market expansion in these areas.(I do not hold the aforementioned stock.)
Strategy：
Buy-in Price: $101.00, Target Price: $111.00, Cut Loss Price: $95.50
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Xinquan(603179)
Analysis：
Xinquan mainly produces a series of automotive interior and exterior parts assembly products, with the ability to develop synchronously with the host factory. The company's revenue for Q1 2025 was 3.519 billion yuan, with a year-on-year increase of 15.5%. Among downstream core customers, the global production of Chery/Geely/Ideal/Tesla 25Q1 increased by 17%/+48%/+16%/-13% year-on-year, respectively. The net profit attributable to the parent company in Q1 25 was 213 million yuan, a year-on-year increase of 4.4%, with a gross profit margin of 19.5% and a year-on-year increase of 2.0 pcts. The gross profit margin remained stable, but the net profit margin fluctuated in the short term, mainly due to: 1) the overseas business is in a period of capacity ramp up, and personnel expenses are mismatched with per capita production; 2) The current employee welfare expenses have increased. The company has recently entered the automotive seat business, and it is expected that the new business will help the company's bicycle matching value continue to increase. According to the company's plan, the seat business will generate billions of revenue within 5 years. The company's overseas market is progressing rapidly in 2024, and the Slovak production base is expected to be put into operation by 2025, further expanding into the European market.
Strategy：
Buy-in Price: $47.90, Target Price: $56.50, Cut Loss Price: $43.50
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Proya Cosmetics (603605.CH) - Revenue exceeded 10 billion for the first time, and valuation remains attractive
OverviewAs a leading domestic cosmetics company, Proya Cosmetics primarily engages in R&D, production, and sales of cosmetic products. Its offerings span skincare, makeup, cleansing & personal care, and more. The company owns brands such as Proya, Hapsode, Timage, Off&Relax, CORRECTORS, INSBAHA, UZERO and Anya. Performance reviewIn 2024, the company achieved revenue of RMB 10.78 billion with a year-on-year (YoY) increase of 21.04%, surpassing the RMB 10 billion mark for the first time, primarily driven by growth in online channel revenue. Operating costs were RMB 3.08 billion (YoY +15.18%). Selling expenses reached RMB 5.16 billion (YoY +29.93%), mainly due to increased brand promotion and marketing expenses. R&D expenses were RMB 210 million (YoY +21.21%), with an R&D expense ratio of 1.95%, remaining largely flat YoY. Net profit attributable to shareholders was RMB 1.55 billion (YoY +30%). Net cash flow from operating activities was RMB 1.12 billion (YoY -24.6%), primarily due to increased payments for goods, marketing expenses, taxes, and employee compensation. Basic earnings per share (EPS) were RMB 3.93 (YoY +30.56%). In Q1 2025, the company recorded revenue of RMB 2.36 billion (YoY +8.13%). Net profit attributable to shareholders was RMB 390 million (YoY +28.87%). Net cash flow from operating activities was RMB 675 million (YoY +56.78%). Basic EPS was RMB 0.99 (YoY +30.26%). The Q1 revenue growth rate was notably slower than the full-year 2024 growth. We attribute this primarily to Q1 not being the peak season for cosmetics consumption, which is typically concentrated in the summer months (June-August) and during major year-end promotional events (October-December). Outstanding 618 Performance: Topping Platform Brand RankingsAccording to National Bureau of Statistics data, China's total retail sales of consumer goods in H1 2025 reached RMB 2,4545.8 billion (YoY +5%). Retail sales of cosmetics amounted to RMB 229.1 billion (YoY +2.9%), exceeding the H1 2024 growth rate, demonstrating the industry's resilience and sustained upward trend. Data from Qingyan Intelligence shows that the total GMV across four major platforms (Taobao/Tmall, Douyin, JD.com, Kuaishou) during the 2025 618 shopping festival period (May 13 - June 18) reached RMB 65.91 billion with a YoY increase of over 10%. This year, Tmall simplified its promotions, replacing complex tiered discounts with a straightforward ൗ% Official Instant Discount," supplemented by category and general consumption coupons. This approach maintained competitive pricing while avoiding excessive "cutthroat price competition." The company delivered an outstanding 618 performance across its brands:
Proya: Topped multiple platform rankings, including Tmall Beauty (Full Period), Douyin 618 Good Things Festival (Skincare), JD.com Domestic Beauty Brand, and Pinduoduo Domestic Beauty Brand.
Timage: Experienced strong growth across three major platforms, ranking first in Tmall Color Cosmetics, second in JD.com Domestic Color Cosmetics, and fifth in Douyin Domestic Color Cosmetics, with GMV growth 10%+, 20%+, and 30% YoY respectively. Key products like the Little Round Tube Foundation, Primer, Trio Contour Palette, and Trio Concealer topped their categories.
Off&Relax: Achieved over 148%+ YoY growth across all channels, hitting new record high. Tmall dual-store GMV grew over 110%+ YoY, Douyin dual-store GMV surged over 200%+ YoY, and JD.com dual-store GMV jumped over 270%+ YoY. Star products like the OR Anti-Hair Loss Serum, Volumizing Shampoo, and Hair Oil performed exceptionally well.
Hapsode: GMV grew 23.5% YoY on Douyin, 69% on JD.com, and 23% on Pinduoduo.
INSBAHA: Achieved over 106%+ YoY GMV growth across all platforms and is rapidly emerging as one of the company's fastest-growing new brands, poised to contribute significantly to future incremental growth. Strategic Collaboration with Bota Bio: Exploring Synthetic BiologyIn May 2025, Proya signed a strategic cooperation agreement with Bota Bio, marking its first partnership with a synthetic biology enterprise. The collaboration will focus on integrating synthetic biology and AI technologies for the innovative development and application of cosmetics and biomedical aesthetic materials. The partners aim to jointly build an innovation matrix for bio-based functional active ingredients, accelerating breakthroughs and enabling diverse applications in cosmetics and biomedical materials. This will provide consumers with more effective, green, and safe products. The collaboration is expected to enhance Proya's competitiveness in bio-based ingredient innovation, product technology barrier creation, and sustainability. Strategic Partnership with Ant Group: AI Empowering BeautyIn May 2025, Proya entered a strategic partnership with Ant Group's Beijing Digital Mali Technology Co., Ltd. Beijing Digital Mali Technology will assist Proya in enhancing consumer experience through AI-powered cloud customer service, AI smart inspection, and full-chain user experience solutions. It will also leverage AI to boost Proya's competitiveness in enterprise digital operations, energy conservation, emission reduction, and green initiatives. This collaboration is a key step in Proya's digital transformation, aiming for short-term cost reduction and efficiency gains through AI customer service and smart quality inspection, better supporting operational stability during peak sales seasons. Partnership with Top-Tier Hospital: Collaborative R&D on Mitochondrial Anti-AgingIn July 2025, the company signed an agreement with West China Hospital of Sichuan University focusing on "mitochondrial anti-aging" research. This aims to leverage cutting-edge medical research to empower cosmetic innovation, establishing a full-chain "industry-academia-research-medicine" collaborative model. Mitochondrial research is becoming a crucial frontier in tech-driven anti-aging. The partnership will integrate West China Hospital's advanced research resources to deeply investigate the intrinsic link between mitochondrial function and skin aging at the cellular level, identify key pathways and targets, accelerate R&D and screening of potent anti-aging actives, and lay a solid foundation for future product applications. However, mitochondrial anti-aging research involves complex biological mechanisms, and the path from basic research to marketable products is lengthy, carrying risks of delayed or unsuccessful technology translation. Valuation and Investment RecommendationThe competitive landscape of the beauty industry is undergoing a reshuffle. Only brands with strong product competitiveness and adept platform resource utilization will thrive. Proya possesses robust product innovation and channel operation capabilities within the domestic beauty sector. Its consistent execution of the "hot product strategy" and continuous portfolio enrichment solidify its leadership position. We anticipate the company will gradually transition from high growth to a more stable phase, but double-digit revenue growth is still expected in the near term.
We forecast the company's operating revenue for 2025-2027 at RMB 12.39 billion, RMB 14.10 billion, and RMB 15.79 billion, respectively. EPS is projected at RMB 4.56, RMB 5.31, and RMB 6.02 for 2025-2027. This translates to P/E ratios of 18.11x, 15.54x, and 13.72x for 2025-2027. We assign a target price of RMB 114, representing 25x our projected 2025 P/E, and maintain a "Buy" rating. Risk Factors1) Downward macroeconomic situation;
2) Intensified industry competition;
3) Management changes;
4) New product promotion failing to meet expectations. Financial Data
Current Price as of: 11 Aug 2025
Source： PSHK Est. Download PDF Version Here...
| Recommendation on 14-8-2025 | | Recommendation | Buy | | Price on Recommendation Date | $ 82.580 | | Suggested purchase price | N/A | | Target Price | $ 114.000 |
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