Key Takeaways:
JPMorgan reiterated its ‘Overweight’ rating on Maogeping (01318.HK), designating it the top pick in the China beauty sector with a HKD130 price target.
The investment bank’s confidence follows Maogeping’s strong 2025 performance, which saw sales and profits climb 30 percent and 37 percent year-on-year, respectively, outperforming the company's own guidance.
JPMorgan maintained its HKD130 price target, which corresponds to a price-to-earnings ratio of 31 times its forecast for 2027. The bank’s report highlighted Maogeping's impressive 84 percent gross margin and the significant growth potential of its membership program, which currently includes 6.4 million offline and 15.6 million online members.
The endorsement underscores the company’s solid growth visibility for the current year, bolstered by a strong first-quarter performance. Management is targeting 30 percent growth in both sales and profits for 2026, planning to open 20 to 30 new stores while aiming for 12 percent same-store sales growth.
Maogeping's growth strategy hinges on expanding its customer base. The company targets a potential offline customer base of 40 million and an online base of 300 to 400 million, indicating substantial room for growth from its current membership levels. The firm's high gross margin provides a cushion against rising raw material costs, supporting profit stability.
JPMorgan noted that Maogeping is well-positioned to capitalize on the trend of experiential consumption in China. The company also remains open to acquisition opportunities to build out a multi-brand portfolio, adding another potential avenue for future growth.
The strong analyst rating and clear growth strategy signal continued momentum for Maogeping. Investors will be watching for the execution of its store expansion and membership growth targets throughout 2026.
This article is for informational purposes only and does not constitute investment advice.
