JP Morgan: Maintaining a "overweight" rating on MAO GEPING (01318) is seen as the top choice for the Chinese beauty and cosmetics sector.

JPMorgan Chase released a research report stating that they roughly maintained their profit forecast for MAO GEPING (01318) for the years 2026 and 2027, with a target price of 130 Hong Kong dollars, corresponding to a forecast P/E ratio of 31 times for 2027. They maintained a "buy" rating and considered it as the top stock in the Chinese beauty and cosmetics sector. MAO GEPING had strong performance last year, with sales and profits increasing by 30% and 37% respectively, outperforming company guidance. Management remains confident for 2026, with sales and profit growth targets of 30% each, planning to add 20 to 30 new stores, with same-store sales growth target of 12%. The bank pointed out that MAO GEPING's gross profit margin is as high as 84%, and the impact of rising raw material prices on profits is limited. There is huge potential for membership growth, with offline membership reaching 6.4 million (target customer group of 40 million) and online membership reaching 15.6 million (target customer group of 300 million to 400 million). The company remains flexible in seeking merger and acquisition opportunities to build a multi-brand portfolio. JPMorgan Chase also believes that the company's growth visibility this year is strong, with strong performance in the first quarter, mainly benefiting from its best position in the experiential consumption trend, a clear roadmap for store network expansion, and brand awareness enhancement.