On the evening of July 1st, A-share listed company Jun Yao Health (605388) announced that the company’s board of directors had reviewed and approved a proposal to appoint Yu Wei as the company’s general manager. Yu Wei’s resume shows that he previously held the position of CEO and President of Shanghai INOHERB Cosmetics Co., Ltd. (referred to as “INOHERB”).
Undoubtedly, the disclosure of this announcement implies that Yu Wei has resigned from INOHERB. In response to this, CHAILEEDO immediately sought confirmation from INOHERB, and an internal employee of the company confirmed Yu Wei’s departure to CHAILEEDO. It is worth mentioning that INOHERB is currently sprinting for an A-share IPO, and with this executive change happening at such a critical moment, will there be any impact on its IPO?
During the IPO stage, the CEO has resigned
According to the announcement released by Jun Yao Health, Yu Wei was born in July 1978 and holds a Master of Business Administration from Duke University in the United States. He previously served as a global partner at Bain & Company, Chief Marketing Officer (CMO) and Chief Data Officer (CDO) at Shanghai Jahwa (600315), Chairman of the Supervisory Board of Zhangzhou Pianzaihuang Shanghai Jahwa Oral Care Co., Ltd., and CEO and President of INOHERB.
It is understood that Jun Yao Health has revealed in its financial reports that based on rich strains of probiotics and an innovative product development mechanism, the company has cultivated a comprehensive product matrix for the consumer market, meeting various application scenarios through co-creation and other methods. Products such as Dr. Daily in the cosmetics and beauty direction have already been officially launched. Therefore, industry insiders believe that by recruiting Yu Wei, who has rich experience in the cosmetics industry, Jun Yao Health may be intending to strengthen its presence in the beauty industry.
Public information shows that Jun Yao Health was established in 1998, with its main business being the research, production, and sale of ambient temperature lactic acid bacteria beverages. INOHERB, on the other hand, was founded in 2000 and is one of the earliest companies in China to enter the field of herbal beauty and skincare. Its core brand is INOHERB, and its product range includes cleansers, toners, eye creams, face masks, lotions, moisturizers, sunscreens/BB creams, essences, essential oils, hand and body care, and other categories. Therefore, Yu Wei’s move can be seen as a cross-industry “job change.”
According to public information from Qichacha, on December 9, 2021, there was a “manager filing” change in INOHERB, with Yan Ming listed as “withdrawn” and Yu Wei listed as “newly entered.” Yan Ming was previously known as the President of INOHERB. At that time, there were reports stating that “Yan Ming’s resignation was for INOHERB’s renewed attempt at an IPO because he was also a founding partner of Asia Merchant Capital.” It is known that after Yan Ming’s departure, INOHERB retained his positions as director and shareholder. However, on November 17, 2022, Yan Ming resigned from his position as a director at INOHERB. As of now, Yan Ming still directly holds 8.3826% of INOHERB’s equity.
It is worth noting that when Yu Wei joined INOHERB, it was initially interpreted by the public as “an important move for INOHERB’s renewed attempt at an IPO.” It is widely believed that Yu Wei held important positions at Shanghai Jahwa and is familiar with the operations of a listed company. INOHERB had already restarted its path to IPO in early 2020, and Yu Wei’s addition may greatly benefit the IPO process.
So, who will replace Yu Wei after his departure? CHAILEEDO made multiple attempts to contact INOHERB’s Chairman, Feng Shuai, but as of the time of writing, the calls have not been answered.
The road to going public has encountered setbacks.
At the same time, with Yu Wei’s departure, there are doubts in the industry about whether there will be further changes in the INOHERB IPO. It is well known that INOHERB’s path to going public has been quite challenging. According to public information and media reports, INOHERB has made three attempts at an IPO.
It is understood that INOHERB first initiated the IPO process in 2012. The prospectus filed in 2012 stated that INOHERB planned to raise over 700 million yuan for marketing and brand-building projects and information technology platform construction. At that time, it was the golden period of INOHERB’s development.
According to INOHERB’s 2012 prospectus, the company’s revenue from 2009 to 2011 was 377 million yuan, 750 million yuan, and 1.335 billion yuan, respectively. The revenue growth rate in 2010 and 2011 was as high as 98.76% and 78.11%, respectively. The rapid revenue growth also brought substantial net profits to the company. Data shows that the company’s net profits from 2009 to 2011 were 52 million yuan, 116 million yuan, and 135 million yuan, respectively, with gross profit margins of 78.65%, 79.87%, and 80.34%, which were higher than those of listed companies in the same industry.
However, just when the company’s momentum was strong, INOHERB abandoned its IPO plan in 2014. At that time, the company explained that this decision was made based on various considerations of the company’s strategy. The overall environment of the supermarket channel was not ideal, and the company was also going through an internal adjustment period. The focus for the next two years would be to maintain market stability.
INOHERB embarked on its second IPO attempt in 2020. Public information shows that Yan Ming, the then-President of INOHERB, confirmed the news of INOHERB’s plan for a second IPO to the media. Yu Wei, the former Chief Marketing Officer of Shanghai Jahwa, took over from Yan Ming as the CEO of INOHERB to assist the company’s IPO. However, for a long time after that, there was no further news about INOHERB’s IPO, and it eventually came to an abrupt end.
INOHERB made its third attempt at an IPO in 2022. On November 15 of the same year, information released on the official website of the China Securities Regulatory Commission (CSRC) indicated that INOHERB had signed an IPO counseling agreement with China International Capital Corporation Limited (CICC) and planned to list on the A-share market. At that time, CHAILEEDO also reported that if INOHERB succeeded in its IPO, it would become the “first herbal skincare stock” in the Chinese cosmetics industry.
According to public information, CICC has provided multiple stages of IPO counseling for INOHERB. In a report titled “Progress Report on the Initial Public Offering and Listing Counseling Work of Shanghai INOHERB Cosmetics Co., Ltd. (Fifth Phase)” released on January 9 of this year, CICC stated, “INOHERB still has some historical issues, including the revenue proportion from the distribution model exceeding 30% during the reporting period. There are many distributors among the customers, and the geographical coverage is relatively dispersed. The company’s sales expenses account for about 40% of the total operating income, which is relatively high.”
CICC stated that it will continue to work with other intermediaries to urge INOHERB to address the outstanding issues that need to be regulated or improved, and assist INOHERB in achieving the goal of meeting the requirements of a listed company as soon as possible. In addition, based on public information, INOHERB has not yet submitted a prospectus to the Shanghai, Shenzhen, or ChiNext exchanges.
Cosmetic companies generally face difficulties in going public.
There is no doubt that raising funds through an initial public offering (IPO) to expand production scale and enhance competitiveness has become a trend in the beauty industry. In fact, many cosmetic-related companies consider going public as a milestone in their development.
However, in recent years, the path to IPO for beauty-related companies has not been smooth. According to incomplete statistics from CHAILEEDO, six cosmetic-related companies have withdrawn their IPO applications in the past year from July to the present. Apart from Uniasia Technology and Mao Geping, there are Lalami, MISIFU, ZPC, Niesheng Tech, and four other companies.
For example, in June 2023, ZPC officially submitted its IPO prospectus to the Shenzhen Stock Exchange, but in December of the same year, ZPC voluntarily withdrew its IPO application, with a gap of less than six months. Additionally, MISIFU withdrew its IPO application just nine days after submitting the listing materials. In the withdrawal announcement, the company cited reasons such as “factors related to the company’s own development and current industry regulatory policies.”
It is worth mentioning that recent media reports state that Mao Geping will launch the second round of non-deal roadshows (NDR) in Hong Kong in early July this year, with an IPO transaction size of approximately $200-300 million (equivalent to 1.452 to 2.179 billion RMB), aiming to debut on the Hong Kong Stock Exchange in September. However, the success of Mao Geping’s attempt to list on the Hong Kong Stock Exchange remains to be seen.
It can be seen that in recent years, the difficulty of going public for beauty-related companies has become a common phenomenon. Senior industry insiders have analyzed that “the country may lean towards supporting companies that have made technological breakthroughs in their IPOs.” It is worth mentioning that as of now, only one beauty company, Bawang International, has successfully listed on the Beijing Stock Exchange this year.
According to incomplete statistics from CHAILEEDO, at least 13 other beauty-related companies have initiated the IPO process or are seeking listing opportunities. This includes brand-oriented companies such as Lanshu and Plant Doctor, as well as material suppliers such as Green Bio, Chuangjian Medical, and Wanxiang Technology.
However, many of these companies have long-standing IPO delays and have not provided updates. For example, Wei Meizi, which submitted its prospectus in 2022, has yet to show any new progress towards listing. Similarly to INOHERB, Green Bio, Chuang’er Bio, and other companies have faced a challenging road to IPO, with multiple submissions of their IPO applications. INOHERB’s IPO is also facing uncertainty following Yu Wei’s departure.
