Mao Geping’s strong online 618 growth, healthy ROI, and balanced channel execution support future momentum

Overview

This company research report was prepared by Goldman Sachs following an online discussion with Mao Geping management during APAC Consumer & Leisure Corporate Day 2026. The report focuses on 618 promotion performance, platform support, price discipline, online ROI, offline channel resilience, product pipeline, overseas expansion, and shareholder returns. The overall conclusion is positive: the company delivered strong online growth while keeping the expense ratio under control, maintained stable offline growth, and has support for future growth from new products and category expansion.

Core views

Key views include: first, online GMV grew 40%+ YoY during 618, broadly in line with management expectations, with growth accelerating in June; second, despite international brands increasing discounts and marketing investment, the company maintained its brand positioning and ROI through vertical KOLs, product-efficacy content, and price discipline; third, platforms have placed greater strategic importance on Mao Geping and provided better traffic and resource placements during 618; fourth, color cosmetics new products continue to scale, skincare may catch up after entering the autumn/winter peak season, and fragrance, while small, helps enhance the premium brand positioning; fifth, Goldman Sachs maintains a Buy rating and HK$106.00 target price.

Analysis framework

The report analyzes management discussion notes, 618 operating data, observations of online platforms and KOL channels, product-category expansion, offline same-store growth, financial forecasts, and the valuation model. Valuation uses a 2027E P/E multiple approach discounted to the end of 2026 using the cost of equity.

Methodology notes

• Valuation methodology2027E P/E discounted target price

  The 12-month target price is based on 28x 2027E P/E discounted to the end of 2026 using an 8.9% COE.

  Goldman Sachs sets a 12-month target price of HK$106.00. The 28x target exit multiple is derived from industry benchmark multiples and adjusted for the company’s higher-growth characteristics.

• Investment rating frameworkGoldman Sachs Buy rating

  The Buy rating reflects a positive investment view relative to the coverage universe.

  The report rates Mao Geping Buy and shows 96.3% upside from the current price of HK$54.00 to the target price of HK$106.00.

• Factor frameworkGS Factor Profile

  The framework compares stock characteristics across growth, financial returns, valuation multiples, and composite dimensions.

  The report discloses that the GS Factor Profile calculates relative percentiles using metrics including sales, EBITDA, EPS, ROE, ROCE, CROCI, P/E, P/B, and EV/EBITDA to provide investment context.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• MaoGepingCosmeticsCo. (01318.HK)

  Covered company; Goldman Sachs assigns a Buy rating.

  Strengths

  Online GMV growth of 40%+ during 618, stronger platform support, strict price discipline, healthy ROI, stable offline channels, and continued expansion of color cosmetics new products and the skincare product matrix.

  Weaknesses

  Skincare growth was slower than color cosmetics in 1H26, fragrance remains at an early stage and the Chinese fragrance market is relatively small, and overseas expansion still requires market-by-market validation.

  Comparison

  Compared with some international brands that rely on traditional media and leading KOLs, the company places greater emphasis on vertical KOLs, product-efficacy content, and makeup-technique demonstrations. Management believes competitive pressure has eased somewhat from last year.

  Risks

  Skincare expansion below expectations, penetration of mid- to high-end beauty products below expectations, higher-than-expected marketing expenses for new star SKUs and categories, and more intense competition from overseas premium brands.

Key data

• 12-month target priceHK$106.00Goldman Sachs target price.
• Current priceHK$54.00Price shown on the report cover.
• Implied upside96.3%Calculated from the target price and current price provided in the report.
• 618 online GMV growth40%+ YoYManagement stated that online GMV grew more than 40% YoY, broadly in line with expectations.
• Full-year revenue growth guidance30% YoYManagement remains confident in achieving full-year revenue growth guidance of 30% YoY.
• Offline SSSgSlightly above approximately 12% full-year guidance in 1H26Offline growth remained resilient during the promotional period.
• Online membership base10mn+KOL livestreaming and new products expanded the online membership base to more than 10 million.
• 2026E revenue forecastRMB6,552.5mn2026E revenue in the GS Forecast table.
• 2027E revenue forecastRMB7,977.0mn2027E revenue in the GS Forecast table.
• 2027E EPSRMB3.732027E EPS in the GS Forecast table.
• Valuation multiple28x 2027E P/ETarget exit multiple used in the target-price methodology.
• Dividend policyPayout ratio of no less than 30%Management stated that it will continue returning capital to shareholders through dividends.

Impact & implications

If management guidance is achieved, Mao Geping may continue to gain share within premium domestic Chinese beauty. Strong 618 growth without a significant increase in the expense ratio suggests that the company is not relying solely on deep discounts to drive growth, but is supported by platform resources, content efficiency, KOL investment, and product strength. Successful expansion of skincare and fragrance would improve the category mix and open up longer-term growth potential; however, if skincare scales more slowly than expected or competition intensifies, the valuation premium could come under pressure.

Risks

• Skincare category expansion may be slower than expected.
• Penetration of mid- to high-priced beauty products in China may improve more slowly than expected.
• Sales and marketing expenses required to promote new star SKUs and categories may be higher than expected.
• Competition with overseas premium brands may be stronger than expected.
• Fragrance and overseas markets remain at an early stage; if market education or store-model validation is unsuccessful, the pace of long-term expansion may slow.

What to watch

• Whether skincare growth improves as management expects during the 2H26 autumn/winter peak season.
• The continued scaling of new products and core SKUs, including the Huahua series, Primer Cream, and Light Silk Powder Compact.
• Whether resource support from platforms including Tmall, Douyin, and JD.com can continue.
• Whether online ROI, the expense ratio, and return rates remain healthy.
• Whether offline SSSg remains above or close to the full-year growth guidance of approximately 12%.
• Progress in opening a Hong Kong makeup school, Hong Kong store efficiency, and validation of potential overseas markets including Singapore, Japan, and Europe.
• The impact of dividend payments and potential overseas M&A on capital allocation.