Cosmo Lady reported a 25.1% yoy fall in FY20 revenue, and net loss of Rmb118m, recovering from a loss of Rmb1.30bn in FY19, below our expectation because of a slower sales recovery and margin expansion in 2H20. Because of the strong performance of hot-selling products and the low base in 1Q20, we expected sales growth to be over 40% yoy in 1Q21. Management aims for the online sales contribution to double in three years. Net opening of offline stores is expected to be 200–300 in FY21F. Upgrade to Add with a new DCF-based TP of HK$1.5, as we expect the Company’s three-year transformation program to pay off in FY22F.