On March 29th, Guangdong Bawei Biotechnology Corporation (referred to as “Bawei”) was officially listed on the Beijing Stock Exchange with the stock code 837023. The issue price was 5.77 yuan per share, and the opening price was 16.88 yuan per share. At one point during trading, it surged by 246.1% to 19.97 yuan. As of the close of March 29th, Bawei’s stock price has risen by 180.59%, reaching 16.19 yuan per share, with a total market value of 1.37 billion yuan.
The successful listing of Bawei signifies its status as the first beauty manufacturing enterprise officially listed on the Beijing Stock Exchange, earning it the title of “First Beauty Manufacturing Stock on the Beijing Stock Exchange.” Additionally, Bawei is the first beauty enterprise to successfully list this year.
Regarding the successful debut on the Beijing Stock Exchange, Bawei’s Chairman and General Manager, Leng Qunying, expressed at the event, “This marks an important milestone in Bawei’s development history and embodies the dreams of all Bawei employees. We sincerely thank everyone for witnessing this significant moment with us.”
For China’s beauty industry to thrive, manufacturing excellence is paramount. Reflecting on its growth journey since 2018, Bawei has leveraged its high standards for research, development, and production to help numerous domestic and international beauty brands create popular products, leaving a significant mark on the development of China’s cosmetics manufacturing industry.
It’s worth noting that the number of domestic cosmetics manufacturing enterprises listed on the A-share market remains limited. Therefore, Bawei’s successful listing not only represents a significant milestone for the development of China’s cosmetics manufacturing industry but also injects a dose of vitality into China’s beauty manufacturing sector.
Bawei’s “dream comes true” at the Beijing Stock Exchange
Dating back to the 1990s, with the pioneering development of China’s personal care product market, a group of domestic personal care product OEM enterprises emerged. It wasn’t until after 2000, with the rapid growth of the national economy, that consumer demand for skincare products began to rise. It was then that domestic skincare product OEM enterprises began to enter the historical stage, gradually entering a period of vigorous development.
Especially around 2006, a group of domestic cosmetics OEM enterprises emerged, many of which have since grown into the backbone of China’s cosmetics OEM industry, with Bawei being one of the outstanding representatives.
Looking back on Bawei’s 18-year development journey, it resembles a vivid portrayal of the transformation of China’s domestic cosmetics OEM industry from nonexistence to prominence. 2016, in particular, was a pivotal year for Bawei.
At that time, after 10 years of rapid development, Bawei had accumulated profound expertise in research and development and manufacturing, becoming an important benchmark in the upstream manufacturing field of Chinese cosmetics. Therefore, in the same year, Bawei made its first attempt to enter the capital market and successfully listed on the NEEQ, becoming the only NEEQ-listed company among more than 1,300 cosmetic production enterprises in Baiyun District, Guangzhou.
By March 2022, after five years of listing on the NEEQ, Bawei signed an IPO counseling agreement with Wanlian Securities and applied IPO counseling to the Guangdong Securities Regulatory Bureau, officially embarking on the path to listing on the Beijing Stock Exchange.
Today, two years later, with its outstanding market performance, Bawei has finally opened the door to listing, becoming one of the few domestic cosmetics OEM enterprises listed on the Beijing Stock Exchange, and even the entire A-share market.
The sustained growth in performance undoubtedly lays a solid foundation for Bawei’s successful listing. According to the latest prospectus, from 2020 to 2023, Bawei’s revenue was 314 million yuan, 416 million yuan, 459 million yuan, and 469 million yuan, respectively, with year-on-year growth rates of 34.81%, 32.34%, 10.54%, and 2.02%, maintaining a steady growth trend.
As for net profit, from 2020 to 2023, Bawei’s net profit attributable to shareholders of the parent company was 28.36 million yuan, 20.73 million yuan, 37.71 million yuan, and 41.16 million yuan respectively. Despite the impact of factors such as the pandemic, net profit attributable to shareholders of the parent company declined in 2021, but Bawei adjusted rapidly and saw a strong rebound the following year, with a year-on-year growth rate of 79%, maintaining a steady growth momentum of 8.2% in 2023.
Today, Bawei has grown into a cosmetics manufacturer with production capabilities across multiple categories including skincare, facial masks, hair care, and makeup. It possesses independent testing qualifications for cosmetics, leading process and technological reserves, and operates as a comprehensive service provider for cosmetics brands, offering services ranging from product planning, formula research, and development, and large-scale production, to efficacy testing.
Simultaneously, Bawei has served over 1,000 cosmetics brands and established stable business partnerships with renowned cosmetics brands both domestically and internationally, including Unilever, Renhe Craftsmanship, HBN, Hong Zhi, and ZA.
Through this IPO, Bawei expects to raise a total of 46.16 million yuan, with the raised funds primarily allocated to projects including the construction of intelligent production workshops, the establishment of research and development centers, and supplementary working capital. This will further enhance its research and production capabilities, providing ample momentum for future development.
In fact, with the rapid development of enterprises, turning to the capital market and leveraging the power of capital is undoubtedly an inevitable trend for the development of the cosmetics OEM industry in China. Bawei’s successful listing has undoubtedly set an example for domestic cosmetics OEM enterprises seeking to go public in the future.
Chinese beauty OEM top performer
In January this year, CHAILEEDO visited nearly 50 beauty companies, including brands that collaborate with Bawei and other beauty OEM enterprises in the same field. They all expressed full recognition of Bawei’s research and production capabilities, as well as its leading position in the OEM field.
Bawei is a unique example in the Chinese cosmetics OEM industry. On the one hand, it has established a solid and high-quality reputation in the industry with its low-key and pragmatic style. In terms of research and advanced technology, Bawei has demonstrated persistent exploration and bold embrace, continuously pushing the boundaries for Chinese cosmetics OEM enterprises.
It can be said that solidity and openness are two sides of the same coin for Bawei, which has contributed to its benchmark status in the local beauty OEM industry. As Leng Qunying previously stated in a media interview, “For national brands to rise, manufacturing must rise first, followed by research and development. Otherwise, it’s impossible to rival international brands.”
In terms of manufacturing, since its establishment, Bawei has never ceased innovation. Especially in the context of the high-quality development trend in the cosmetics industry, Bawei has maintained a keen insight into innovative technologies, early advocating for intelligent development to continuously improve production efficiency and enhance corporate competitiveness.
It can be said that after years of exploration, Bawei is one of the domestic cosmetics OEM enterprises that has delved deeply into intelligent exploration and construction.
For example, in terms of information operations, Bawei has implemented SAP system, LIMS system, and other information management systems, along with PDA handheld terminals, RFID, and supporting hardware devices to achieve automatic collection, analysis, and traceability of production process data, significantly reducing the use of paper documents and making production and operation data dynamic, visualized, and online.
It is worth mentioning that with the popularity of Chatgbt and Sora, AI technology has once again become the focus of attention. Bawei, which keeps an open mind and keen insight into new technologies, has already noticed the enormous potential for its application in the cosmetics field. Recently, it has teamed up with Jixin Intelligence to create an ecosystem for the cosmetics industry through AI modeling, focusing on key aspects such as customer needs, implementation of cosmetics, and operational management, jointly exploring and finding the AI path suitable for the development of cosmetics companies.
With efficient and intelligent manufacturing hardware, Bawei’s research and development capabilities can be maximized. For Bawei, emphasizing research and development is not just a slogan, but a continuous effort through substantial investment to improve its technical research and development capabilities.
According to the prospectus, from 2020 to June 2023, Bawei’s cumulative research and development investment amounted to 89.1578 million yuan, accounting for 6.36% of its operating income, placing it at the forefront even among top domestic cosmetics OEM enterprises.
With over a decade of research and development accumulation, Bawei possesses numerous core technologies, including the technology for preparing stable microcapsules encapsulating active ingredients. Additionally, Bawei is conducting research projects on the preparation and application of honeysuckle extract, as well as the preparation and application of ganoderma extract, driving the company’s development with technology.
At the same time, Bawei and its subsidiaries have obtained a total of 129 patents, including 112 domestic and international invention patents, providing professional and competitive overall solutions for brands across various channels from waist to head.
It’s worth noting that in July of last year, Bawei completed the registration of “honeysuckle leaf extract” as a cosmetic raw material, becoming one of the few cosmetic manufacturers in the industry to complete the registration of new materials.
Recently, Bawei made a high-profile appearance at the IFSCC International Academic Exchange Conference, showcasing innovative application achievements such as super micro lipid technology, biomimetic lipid permeation promotion technology, microgel technology, and the research and development results of new materials such as honeysuckle leaf extract. While demonstrating the research and innovation capabilities of domestic cosmetics companies, Bawei also explored more possibilities in the beauty industry through the exchange and learning of cutting-edge technologies.
The cosmetic OEM market is undergoing a major shakeup， top companies like Bawei are seizing opportunities
In recent years, the domestic cosmetics market in China has been evolving rapidly. On one hand, the rapid development of e-commerce channels has facilitated the rapid growth of many emerging domestic cosmetics brands through precise online marketing. On the other hand, increasingly stringent regulations and awakened R&D awareness among enterprises are reshaping the cosmetics industry.
Amidst the ever-changing landscape of the cosmetics industry, what kind of cosmetic OEM companies are needed? Bawei, with its keen market insights, continually enhances its competitive edge to provide services that truly meet market demands. Currently, Bawei adapts to the changing cosmetics market by offering comprehensive services that integrate product planning, formula development, large-scale production, and efficacy testing, assisting brands in creating popular products.
Looking at the domestic cosmetic OEM market, high-quality cosmetic OEM companies represented by Bawei are also poised to seize significant development opportunities. According to publicly available data, there are over 5,000 cosmetics production enterprises in China, with Guangdong Province alone having over 3,100. This reflects a relatively low concentration of the cosmetics OEM industry in China, with the industry landscape being quite fragmented. There may be opportunities for further market consolidation by leading enterprises in the future.
It’s worth mentioning that in recent years, with the issuance of regulations such as the “Regulations on the Supervision and Administration of Cosmetics Production,” some small and medium-sized enterprises with low production configuration, non-standard management processes, and outdated R&D capabilities are being forced to exit or move towards standardization. Additionally, amid external economic instability and fluctuations in raw material prices, the risk resistance of small and medium-sized OEM enterprises competing at low prices is gradually weakening.
According to statistics, since January of last year, approximately 170 companies have deregistered their “Cosmetics Production License,” with Guangdong Province having the highest number of deregistrations, nearly one hundred.
Simultaneously, as emerging brands invest heavily in building their own factories and R&D systems and have relatively low brand awareness, they urgently need large-scale, reputable, and technologically advanced OEM enterprises to endorse their branded products. Well-known cosmetic OEM companies like Bawei will also receive more business opportunities.
Looking ahead, according to Zhoushi Consulting, the scale of China’s cosmetic OEM industry is expected to grow from 43.41 billion yuan to 62.29 billion yuan from 2022 to 2025, achieving a compound annual growth rate of 12.79%.
In the face of the promising future of the cosmetic OEM market, Bawei’s successful listing will undoubtedly provide strong impetus for its development in the cosmetic OEM market, while also contributing to the further strengthening of China’s cosmetics manufacturing capabilities.
