Shanghai Jahwa United (600315.SS): Earnings review: Encouraging online & cosmetics growth but higher selling expenses weigh on Margins; Downgrade to Neutral

Research evidence excerpt

Equity Research

21 August 2026 | 7:30AM HKT

Shanghai Jahwa United (600315.SS)

Earnings review: Encouraging online & cosmetics growth but higher selling expenses

weigh on Margins; Downgrade to Neutral

600315.SS

12m Price Target: Rmb20.00

Price: Rmb18.40

Upside: 8.7%

Shanghai Jahwa reported 2Q26 on Aug 19 after market close;

recurring NP was in-line with higher investment income offsetting a

17% OP miss on higher selling expenses. Overall, sales/NP/recurring

NP grew by 12%/227%/196% yoy in 2Q26.

We downgrade Shanghai Jahwa from Buy to Neutral given limited

upside (+9% on last close) after factoring in 1) -7% earnings revision

in 2027E on a more conservative margin expansion trajectory in the

context of intensifying market competition; we now look for 10%

yoy sales growth/7.4% NPM in 2027E vs 10% growth/7.9% NPM

respectively prior; 2) unchanged valuation methodology at 24x

2027E PE discounted back but rolling over to mid-2027, to reflect

the Company’s efforts on sales growth initiatives and efficiency

improvement. That said, we remain constructive on the Company’s

sales growth profile into 2H26 at 12% yoy and better margin into

2027E after its skincare segment growing faster at 33%/26% yoy in

26E/27E, with implied personal care NPM at mid-teens% and

cosmetics at MSD%. Our new TP is Rmb20 vs Rmb21 prior (-5%

revision).

The company hosted a results briefing on the same day. Key

takeaways include:

1) Mgmt expressed confidence in achieving FY26 operating

targets; 2H26 growth to be supported by new-product ramp-up

and front-loaded investment: Management expects 2H26 growth

to be driven by continued growth of Herborist/Dr. Yu and incubation

of core SKUs. While 1H26 selling expenses rose due to front-loaded

branding, new-product and channel investment, management views

channel expenses as manageable and remains confident in future

profitability improvement.

2) Liushen’s online momentum and new-product pipeline should

underpin growth: Liushen’s online revenue grew c.70% YoY in

1H26/2Q26, with Douyin sales more than doubling. Meanwhile,

NEUTRAL

Valerie Zhou

Goldman Sachs (Asia) L.L.C.

Key Data _____________________________________

Market cap: Rmb12.4bn / $1.8bn

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