[Oriental Retail Beauty] Beauty & Personal Care Sector Review - 20260729

English summary

# Institutional holdings fall to decade-low, pessimistic expectations and sector valuation clearing sufficient. In Q2, fund holdings in the retail beauty sector plummeted to a decade-low, with the actual allocation ratio for the beauty sector falling to 0.04% and the overweight ratio at -0.12%, leaving the capital structure extremely clean. # June social retail and 618 promotion bucked the trend, demonstrating strong anti-cyclical resilience of the beauty track. In June, retail sales of cosmetics above designated size surged 12.6% YoY in a single month; meanwhile, during this year's 618 promotion against the backdrop of canceled pre-sale normalcy, online beauty market total transaction volume still achieved steady growth of 11.4%. # Focus on the 'low valuation + marginal improvement' mainline: 1) Giant Biogene: 618 omni-channel GMV improved significantly (Comfee/Keratin+ up 25%+/30%+), and with a low base in H2, new products are expected to release high earnings elasticity; 2) Lance Co., Ltd.: proactive operational adjustments bring marginal improvement in profit margins. # Retail sector recommendations: Small Commodity City, Sumec, CHJ, Chongqing Department Store Group, etc.