On the first day after the long National Day holiday in China, A-shares once again made history.
According to media reports, just 20 minutes after the opening today (October 8), the trading volume of the Shanghai and Shenzhen stock markets exceeded 1 trillion yuan, breaking through 3 trillion yuan for the first time at 14:08; the total trading volume for the day exceeded 3.4 trillion yuan. By the close, the cosmetics sector rose by 8.09%, with BAWEI Corporation, BTN, and Proya ranking as the top three in terms of increase. Among them, Proya’s latest total market value is 48.05 billion yuan ($6.8 billion), ranking first among China’s listed cosmetics companies by total market value.
So, with the A-share market continuing its “galloping” trend, how have major listed cosmetics companies performed? And which companies are leading in terms of increase?
Top 10 beauty companies’ market value grows by nearly 70 billion!
Since the Federal Reserve cut interest rates last month and the Chinese government issued a series of monetary stimulus measures, topics like “A-shares” and “limit up” have almost daily trended on Weibo. Listed cosmetic companies in China are also following the overall market trend and experiencing a wave of significant increases.
According to previous statistics by CHAILEEDO, following the Fed rate cut on September 18 (local time in the U.S.), by noon on September 19 at the close of the A-share market, 97.4% of the stock prices of the 37 listed cosmetic companies in China had risen, with an average increase of 2.76%.
So, after the general rise before the holidays and the consolidation during the National Day break, how are the listed cosmetic companies in China performing in the market now?
According to public data, since trading on September 19, the market value of the top 10 Chinese beauty companies has collectively increased by 69.974 billion yuan ($9.9 billion). Among them, Proya, Giant Biogene, BTN, and Bloomage Biotech have seen market value increases of billions, with Proya and BTN even reaching their highest market values this year; CHICMAX, Shanghai Jahwa, and Marubi have seen market value increases of over 3 billion yuan ($424.9 million).
As of yesterday(October 8), the A-share market has shown more stable performance, with beauty-related companies seeing stock price increases. Correspondingly, beauty-related companies in the Hong Kong and U.S. markets have seen their stock prices decline.
In particular, Proya, which just announced its “second-generation” succession plan, hit the limit up today with a 10% increase, closing at 121.1 yuan ($17.15), with a total market value of 48.047 billion yuan ($6.8 billion), ranking first among the top 10 beauty companies. It’s worth noting that Proya achieved its best performance so far this year in both closing price and total market value.
Furthermore, Bloomage Biotech and BTN have both seen stock price increases of over 10%, with daily market values of 38.751 billion yuan ($5.49 billion) and 29.779 billion yuan ($4.22 billion) respectively; other cosmetic-related A-share companies have also seen single-digit increases.
However, due to the impact of the Hong Kong market’s overall decline today, Giant Biogene and CHICMAX, which had risen in the past few days, saw significant adjustments of over 10% in their stock prices. Specifically, Giant Biogene’s stock price fell by 10.12%, with a total market value of 52.028 billion Hong Kong dollars ($6.69 billion); CHICMAX’s stock price slid by 14.43%, with a total market value of 17.115 billion Hong Kong dollars ($2.2 billion).
Across the board showing gains! Several companies reach their highest market value this year
Of course, it’s not just the top 10 Chinese beauty companies that have seen growth. The positive signals from the capital market have spread to all beauty-related enterprises.
CHAILEEDO has compiled statistics on the market performance of some beauty-related companies outside the top 10. Apart from Chaoyun Group in the Hong Kong stock market, all other companies have seen gains. While the growth momentum may not be as strong as the “leading” companies like Proya and Giant Biogene, they have also shown good performance.
For example, companies in the daily chemical category such as Runben, Dencare, Liangmianzhen, PERFECT, and LAF have received positive market feedback, with stock price increases of 9.98%, 4.22%, 7.14%, 3.98%, and 5.15% respectively.
At the same time, Voolga, a strong competitor of the top 10 Chinese beauty companies, also saw a 6.08% increase in its stock price in a single day, closing at 39.41 yuan ($5.58), with a total market value of 15.77 billion yuan ($2.23 billion), the highest market value recorded by Voolga this year.
On the raw materials front, CHAILEEDO has observed that out of the 13 listed raw material companies in the statistics, 11 companies have seen stock price increases of over 5%, with IMEiK, Jinbo, Anhui Huaheng Biotechnology Co., Ltd., CABIO, and China Herb all experiencing increases of over 10%.
In particular, China Herb, which just landed on the Beijing Stock Exchange this month, saw a 29.98% increase in its stock price, with a total market value of 2.754 billion yuan ($390 million), almost reaching three times its market value at the time of its initial public offering (1.025 billion yuan, $145.2 million).
IMEiK’s market value has been soaring since mid-September, rising from 41.948 billion yuan ($5.94 billion) on September 19 to 85.51 billion yuan ($12.11 billion) today, with a closing price of 282.72 yuan ($40.04 yuan), a significant increase of 20%.
Furthermore, Jinbo, also a pioneer in the collagen recombinant field, saw its stock price reach 261.93 yuan ($37.1) today, a 14.38% increase, with a total market value of 23.18 billion yuan ($3.28 billion), nearly doubling its level from September 19.
In the ODM/OEM sector, BAWEI Corporation led with a 18.86% increase, with a total market value of 1.168 billion yuan ($165.4 million); Fujian Green Pine Co., Ltd. topped the list with a market value of 2.609 billion yuan ($369.5 million), closing at 5.05 yuan ($0.72), an 8.6% increase.
In the retail/agency services sector, Chancemate, Qingmu, and Kaytune all saw stock price increases of over 10%, with market values of 5.648 billion yuan ($799.8 million), 3.553 billion yuan ($503.1 million), and 2.098 billion yuan ($297.1 million) respectively.
Cosmetics still on the rise?
The heat in the capital market is still rising, but it is important to note that from today’s overall trend, both the cosmetics sector and the general market are showing a trend of opening high and then falling back. Many netizens jokingly say, “Those who bought in at the opening are already starting to lose.”
In fact, from the current perspective, the overall cosmetics retail market still remains relatively weak. According to the latest data from the National Bureau of Statistics, the total retail sales of cosmetics from January to August this year amounted to 273 billion yuan ($38.66 billion), a year-on-year decrease of 0.5%; among them, the sales of cosmetics in August were 31.9 billion yuan ($4.52 billion), a year-on-year decrease of 6.1%. Some industry insiders have frankly admitted to CHAILEEDO that “the overall macro environment is indeed not good at the moment, and consumer confidence is difficult to boost.”
However, according to a research report from CITIC Securities, although the growth rate of the beauty market is slowing down, in the first half of 2024, the revenue growth rate of 11 listed companies exceeded 24%, with the net profit growth rate slightly higher than 24%. This indicates that leading companies are gaining more market share, and this trend is expected to continue, although the gap in growth rates with the industry may narrow in the second half of the year.
Currently, a general rise in the A-share market has become a trend. From the statistical data mentioned earlier, it is evident that top companies are indeed leading the growth of beauty concept stocks.
Regarding future growth trends, Mark Mobius, the legendary American investor known as the “father of emerging markets,” recently stated that China’s new round of stimulus measures is significantly bolder than before. If China continues to introduce measures to support the market domestically, the upward trend in the A-share market may continue.
In addition, yesterday (October 7th), Guo Guangchang, Chairman of Fosun Group, the parent company of Yuyuan Inc., also stated on Weibo, “The wealth effect brought about by the rise in stocks has truly stimulated consumer demand.” He believes that the increase in consumer willingness brought about by this wealth effect will gradually reflect in the economy.
Some senior industry insiders have also expressed to CHAILEEDO that while short-term consumption is sluggish, the impressive performance of the capital market will boost the confidence of practitioners. Positive government policies and the Federal Reserve’s interest rate cuts in the US will further increase the confidence of consumers and beauty companies.
It is worth mentioning that today, at a press conference held by the State Council Information Office, Zheng Zhajie, Director of the National Development and Reform Commission, stated that in response to new situations and problems in the current economic operation, China will intensify efforts to introduce a package of incremental policies to promote sustained economic recovery and improvement.
Specifically, to address the downward pressure on the economy, macroeconomic policies will be strengthened in a counter-cyclical manner, with all sectors continuing to exert more effort; to tackle issues such as insufficient domestic effective demand, the focus of incremental policies to boost domestic demand will be more on benefiting the people and stimulating consumption, actively leveraging investment to drive economic growth; to assist enterprises facing production and operational difficulties, efforts will be increased to support them, optimize the business environment, and help them overcome challenges; and to address issues such as the recent volatility and downturn in the stock market, effective measures will be introduced to boost the capital market.
Furthermore, Zheng Zhajie also stated that there will be further regulation of the enforcement activities of administrative law enforcement agencies, emphasizing the importance of not arbitrarily imposing fines, conducting inspections, or sealing off places, and promptly issuing warnings about abnormal increases in fines and confiscations, with necessary follow-up checks if needed.
Overall, a new round of economic stimulus policies has arrived, and the intensity of policies such as promotions and enterprise support will increase. However, it will take time for these policies to be fully implemented in the cosmetics industry. Whether this dual stimulus of policies and the capital market can truly help propel the development of the cosmetics market remains to be seen.
