Recently, CHAILEEDO learned from the official website of the Hong Kong Stock Exchange that Inner Mongolia Yuhangre Sand Industrial Co., Ltd. (referred to as “Yuhangren”) has submitted an application for listing to the Hong Kong Stock Exchange, with China International Capital Corporation Limited (CICC) as its exclusive sponsor.
According to the prospectus, Yuhangren is the world’s largest sea-buckthorn product supplier, dedicated to the development, production, supply, and marketing of high-quality sea-buckthorn products. In 1997, they began exploring sea-buckthorn cosmetics and established Inner Mongolia Yuhangren Cosmetics Co., Ltd. (referred to as “Yuhangren Cosmetics”), which was one of the earliest companies in China to apply local sea-buckthorn characteristics to cosmetics.
Therefore, if Yuhangren successfully goes public, it has the potential to become the first publicly traded company in the sea-buckthorn cosmetics industry. So, how has Yuhangren Cosmetics developed? And how big is the market for sea-buckthorn cosmetics exactly?
Diversified Product Portfolio, Pioneer of Sea-Buckthorn Cosmetics
The golden fruits, adorning the delicate branches, may soon lift up an IPO on the Hong Kong Stock Exchange, driven by the resilient sea-buckthorn.
Public information reveals that sea-buckthorn is distributed in northern and northwestern regions of China, as well as southwestern areas, with a long history of medicinal use. Its fruits are rich in nutrients, bioactive substances, and high vitamin content.
In 1995, Xing Guoliang led the transformation of Inner Mongolia Patent Technology Experimental Factory into Yuhangre High-Tech Company (the predecessor of Yuhangren) and took the lead in exploring the industrialization of sea-buckthorn. Prior to that, the company primarily engaged in the research and production of wire corrugated pipes.
Two years later, Xing Guoliang established Yuhangren Cosmetics, venturing into the sea-buckthorn cosmetics industry and becoming the first cosmetics company in Inner Mongolia. According to the prospectus, from its establishment in 1997 until June of this year, Xing Guoliang has consistently served as the legal representative, chairman of the board, and director cum general manager of Yuhangren Cosmetics, primarily responsible for overall management and decision-making, indicating his dedication to the cosmetics business.
It is worth mentioning that Xing Guoliang also received the Third Prize for Technological Advancement in Enterprises in Inner Mongolia Autonomous Region in 1999 for his involvement in the sea-buckthorn oil series cosmetics project.
Through nearly 30 years of development, Yuhangren has grown into a leading enterprise in the segmented market of sea-buckthorn. According to Frost & Sullivan data, in 2023, based on the processing volume of sea-buckthorn berries, Yuhangren is the world’s largest supplier of sea-buckthorn products and one of the sea-buckthorn product suppliers with the most diversified product portfolio. Its products are exported to 12 countries or regions, including Japan, Malaysia, Germany, and South Korea.
The prospectus shows that Yuhangren achieved revenues of 147 million yuan, 186 million yuan, and 220 million yuan in the fiscal years 2021 to 2023, respectively. During the same period, the company’s net profits for the year were approximately 20.93 million yuan, 30.8 million yuan, and 46.168 million yuan.
Specifically, Yuhangren’s business includes health and nutritional food, beverages, cosmetics, and health products, forming a diversified product portfolio. This also makes it one of the few companies in China capable of achieving comprehensive utilization of sea-buckthorn on an industrial scale.
According to the prospectus obtained by CHAILEEDO, sea-buckthorn cosmetics specifically refer to skincare and beauty products that incorporate sea-buckthorn fruits as the core ingredient, mixed with various moisturizing, anti-wrinkle, and soothing plant extracts, processed through extraction, refining, and blending techniques.
With the continuous growth of the sea-buckthorn product industry, sea-buckthorn cosmetics have gradually gained economies of scale. According to Frost & Sullivan data, the market size of sea-buckthorn products increased from 978 million yuan in 2018 to 2.144 billion yuan in 2023, with a compound annual growth rate of 17.0%. It is expected to exceed 5 billion yuan by 2028.
Among them, the market size of sea-buckthorn cosmetics is projected to have a compound annual growth rate of 9.3% from 2018 to 2023, reaching 11.9% in the next five years. By 2028, it is expected to surpass 114 million yuan, with a market size of 114 million yuan.
Brand and Raw Material Suppliers are Betting on the Potential of Sea-Buckthorn Ingredients
According to Yuhangren’s official WeChat account, Yuhangren cosmetics specifically target the climate characteristics of northern China, such as strong winds and dry air, to create cosmetics suitable for people in the northern region. They have developed multiple series of cosmetics and currently own multiple beauty brands, including Yuhangren and SNC.
Using “Yuhangren cosmetics” as a keyword search in a cosmetics regulatory app called CHAILEEDO, a total of 351 data entries were found. The products include skincare and hair care categories, with many product names containing sea-buckthorn elements. According to the official website of the China Food and Drug Administration, Yuhangren’s cosmetic license number is Inner Makeup 20170001. The production projects include general liquid units (gel, hair care cleaning, toners) and cream and lotion units (hair care, skincare cleaning).
It is worth mentioning that in the current sea-buckthorn cosmetics market, not only Yuhangren cosmetics but also many other brand owners and raw material companies are focusing on the research and application of sea-buckthorn ingredients.
From the brand perspective, brands that use sea-buckthorn ingredients can be divided into two categories. One category consists of local brands located in sea-buckthorn-producing regions such as Inner Mongolia, Xinjiang, and Qinghai. These brands often extend their involvement in sea-buckthorn to areas such as food, raw material development, and more. The other category includes brands that are further away from the sea-buckthorn production areas and only use sea-buckthorn as an ingredient in their products.
In addition to Yuhangren, local brands such as General Health Biotech Co., Ltd. (referred to as GH Biotech) in Qinghai have also independently developed and produced a series of sea-buckthorn skincare products and functional ingredients.
“Sea-buckthorn not only contains abundant free amino acids, various vitamins, and trace elements, but also sea-buckthorn oil extracted from sea-buckthorn seeds can be combined with other substances to create anti-aging cosmetics suitable for high-altitude areas,” said Sun Yunwu, general manager of GH Biotech, in an interview with the media.
CHAILEEDO has noticed that well-known brands like INOHERB and WETCODE have also featured sea-buckthorn as a key ingredient in their products. For example, INOHERB has included sea-buckthorn as a moisturizing ingredient in its Quadruple Hydrating series, specifically designed for dry and sensitive skin. WETCODE’s “Desert Oasis Series” incorporates sea-buckthorn seed oil to enhance the product’s repairing and moisturizing abilities.
In December of last year, Huiyuan, a well-established fruit juice company, launched the “Huiyuan Wild Thorn Sea-Buckthorn Radiance Mask,” which highlights sea-buckthorn seed oil as its main ingredient, expanding into the crossover between sea-buckthorn and beauty products.
On the raw material side, several companies focusing on the development of plant extracts have entered the sea-buckthorn raw material market. Shanghai Bokoo Biological Technology Co., Ltd., which specializes in bioactive ingredients, has previously released fermented sea-buckthorn oil products.
However, the most representative example is Zhejiang Zhongzhi Enterprise Group, a raw material company focused on natural plants. They collaborated with the Northwest Institute of Plateau Biology of the Chinese Academy of Sciences, which has been researching sea-buckthorn for many years, to launch the functional ingredient Tangola™-OPC sea-buckthorn anthocyanin. This ingredient has shown significant effects in antioxidant and melanin inhibition.
CHAILEEDO has noticed that in recent years, there have been continuous research breakthroughs regarding sea-buckthorn ingredients. In January of last year, researchers from Northwest A&F University and Innavocon Corporation published a research paper in the top international journal “Antioxidants” in the field of antioxidants, revealing the anti-aging effects and mechanisms of sea-buckthorn anthocyanins on human skin fibroblasts. Several universities and research institutions, including Inner Mongolia University, Sorbonne University, and the French Academy of Sciences, have made progress in the study of sea-buckthorn polysaccharides’ antioxidant activity.
It can be seen that sea-buckthorn, with its long history of medicinal use, is increasingly demonstrating its application potential in anti-aging and skin whitening. As the theoretical foundation continues to grow and more research achievements are published, its widespread use in the cosmetics field is expected to be further promoted.
Plant raw material notifications are experiencing a surge, with several group standards left blank.
In fact, sea-buckthorn is just the tip of the iceberg in China’s vast plant raw material resources. The “Catalogue of Already-used Cosmetics Raw Materials, (2021 Edition)” published by the National Medical Products Administration includes over 3,400 types of plant raw materials, while China has more than 30,000 species of plants.
It is worth mentioning that the opening of new raw material notifications has benefited the application of plant raw materials in the cosmetics industry. According to CHAILEEDO statistics, since 2021, 160 new cosmetic raw materials have completed notifications (excluding two withdrawn notifications), with nearly 40 of them being plant raw materials, accounting for over 20%. Especially this year, over ten plant raw materials have already completed notifications, approaching the total number for the entire previous year, indicating that the number of plant raw material notifications for this year may reach a new high.
Among them, domestic beauty and cosmetics industry leaders, such as Betaine, have completed notifications for eight plant-based new raw materials, including extracts of Centella asiatica and Artemisia capillaris, making them one of the companies with the most plant raw material notifications.
The sharp increase in the number of notifications for new plant raw materials reflects that more and more beauty and cosmetics companies are realizing that Chinese characteristic plant ingredients are an important choice for creating differentiation for Chinese brands and serve as unique identifiers distinguishing them from foreign brands. This is a field worth further exploration.
CHAILEEDO has noticed that not only are efforts being made in the area of new plant raw material notifications, but companies and regulatory authorities are also intensively working to promote the high-quality development of domestic plant raw materials in the face of current deficiencies in plant raw material standards and the absence of a complete standard system.
In the past two years, several group standards related to plant raw materials, such as the “Guidelines for Quality Management of Plant Raw Materials for Cosmetics” and the “Technical Definition and Calculation Guidelines for Natural Ingredients in Cosmetics,” have been released, effectively filling the gaps in related areas.
In fact, local authorities are also making efforts. In April of last year, the Zhejiang Provincial Medical Products Administration issued relevant documents, proposing to guide the development of ecological cosmetics, leverage the technological advantages of the Provincial Cosmetics Plant Material Research Center, and establish a database of Zhejiang’s characteristic plant raw materials for cosmetics. Recently, the “Catalog of Shandong’s Characteristic Plant Resource Materials for Cosmetics,” jointly developed by the Jinan Municipal Market Supervision Bureau and the Municipal Food and Drug Inspection and Testing Center, was officially released. This standard delves into local characteristic plant raw materials, filling the gap in the application of Shandong’s characteristic plant resources in the cosmetics field.
Consumer preferences are also an important factor in the development of Chinese characteristic plant raw materials. According to CHAILEEDO’s report “2023 China Ingredient Market Insights,” over 60% of Chinese ingredient-based products currently emphasize natural extracts. In terms of consumer preferences for cosmetic ingredients, over 60% of consumers prefer naturally sourced ingredients.
In response to this, Ren Hankun, the Director of the Research Institute of Miosen Group’s Taihe Kangmei, publicly stated, “Chinese characteristic plant ingredients meet the rational and emotional needs of consumers and ultimately serve the brands. The trust and zero-cost communication of the brands are the underlying logic for the long-lasting and enduring value of Chinese characteristic plant resources.”
In the era of the rise of domestic brands and technology-led beauty and cosmetics, characteristic plant raw materials are being given new significance. They are not only “secret weapons” in terms of brand competition but also crucial windows for Chinese cosmetics raw materials to break through.
