On October 9, Mao Geping Cosmetics Co., Ltd. (hereinafter referred to as “Mao Geping”) submitted a listing application to the main board of the Hong Kong Stock Exchange and updated its prospectus, with China International Capital Corporation (CICC) acting as the sole sponsor.
It is worth noting that prior to this, Mao Geping had attempted to go public four times, previously submitting prospectuses to both the Shanghai Stock Exchange and the Hong Kong Stock Exchange, but successfully listed and rang the bell. The most recent IPO setback occurred on October 8 of this year, when Mao Geping’s listing application on the Hong Kong Stock Exchange showed a “lapsed” status. This latest submission to the main board of the Hong Kong Stock Exchange indicates that Mao Geping intends to continue advancing the listing process on the main board.
In the updated prospectus, Mao Geping also disclosed its financial data for the first half of this year. In the first half of this year, Mao Geping’s revenue increased by 41.0% from 1.399 billion yuan ($197.8 million) in the same period of 2023 to 1.972 billion yuan ($278.9 million); net profit increased by 41.0% from 349 million yuan ($49.35 million) in the same period of 2023 to 493 million yuan ($69.72 million).
Looking at a longer timeline, from 2021 to the first half of 2024, the company’s revenues were 1.577 billion yuan ($223 million), 1.829 billion yuan ($258.6 million), 2.886 billion yuan ($408.1 million), and 1.972 billion yuan ($278.9 million) respectively, while profits were approximately 331 million yuan ($46.8 million), 352 million yuan ($49.78 million), 663 million yuan ($93.76 million), and 493 million yuan ($69.72 million) respectively. According to data from Frost & Sullivan, Mao Geping’s revenue growth from 2021 to the first half of 2023 significantly exceeded the industry average.
According to the prospectus, Mao Geping currently has two major brands: the flagship brand MAOGEPING, launched in 2000, and in 2008, the brand expanded its portfolio with the launch of “LOVE FOR KEEPS,” mainly covering makeup and skincare categories.
As of June 30, 2024, Mao Geping’s product portfolio included 387 items across both brands, comprising 337 makeup products and 50 skincare products. In terms of pricing, Mao Geping’s makeup products generally have a suggested retail price between 200 yuan ($28.3) and 500 yuan ($70.7), while skincare products are typically priced between 400 yuan ($56.6) and 800 yuan ($113.1). In the first half of this year, sales of makeup and skincare products accounted for 57.1% and 42.9% of the company’s total product sales revenue, respectively.
In terms of distribution channels, in the first half of this year, Mao Geping’s offline and online channels each contributed 50.9% and 49.1% of the company’s total product sales revenue, nearly reaching parity.
It is worth noting that online channels are becoming increasingly important for Mao Geping. From 2021 to 2023, Mao Geping’s revenue generated through online channels had a compound annual growth rate of 49.3%, compared to 28.8% for offline channels. In the first half of this year, Mao Geping’s online sales revenue grew by 63.4% year-on-year.
In offline channels, as of June 30, 2024, Mao Geping had 372 self-operated counters nationwide, ranking second among all beauty brands in China. As of September 30, 2024, Mao Geping had over 2,700 beauty advisors stationed at its counters across the country, making it one of the largest counter service teams among both domestic and international beauty brands in China.
In its prospectus, Mao Geping stated that 25.0% of the funds raised through the IPO will be used to expand the sales network; about 20.0% will be used for brand-building activities; about 15.0% will be used for overseas expansion and acquisitions; about 10.0% will be used to strengthen production and supply chain capabilities; about 9.0% will be used to enhance product design and development capabilities; about 6.0% will be used for makeup art training institutions; about 5.0% will be used for the digitalization of operations and information infrastructure; and about 10.0% will be used for working capital and general corporate purposes.
According to data from Frost & Sullivan, Mao Geping is the only Chinese company among the top ten high-end beauty groups in the Chinese market, ranking seventh in 2023 by retail sales, with a market share of 1.8%.
