Yesterday (August 21), Shanghai Jahwa released its financial report for the first half of 2024. According to the report, in the first half of this year, Shanghai Jahwa achieved a revenue of 3.321 billion yuan ($465.7 million), a year-on-year decrease of 8.51%; the net profit attributable to the shareholders of the listed company was 238 million yuan ($33.37 million), a year-on-year decrease of 20.93%.
It is worth noting that this is also the first financial report of Shanghai Jahwa since Lin Xiaohai officially took office as the new CEO on June 1 this year. So, how did Shanghai Jahwa perform in the first half of this year? What kind of changes will Shanghai Jahwa, under the leadership of Lin Xiaohai, bring in the “Lin Xiaohai era”?
In the first half of this year, Shanghai Jahwa’s revenue was 33.21 billion yuan ($465.7 million), with personal care revenue close to 16 billion yuan ($2.24 billion).
Looking at the financial report disclosed by Shanghai Jahwa, despite a slight decline in revenue and net profit in the first half of this year, its non-GAAP net profit attributable to the parent company reached 2.35 billion yuan ($329.5 million), which, when calculated on the same basis, showed a 9.06% year-on-year increase. As of the end of the reporting period, Shanghai Jahwa’s inventory was 727 million yuan ($101.94 million), a decrease of 28.93% year-on-year, with inventory turnover days decreasing by 26 days year-on-year. Additionally, Shanghai Jahwa’s operating cash flow was 4.88 billion yuan ($684.3 million), marking a 643.94% year-on-year increase.
Looking at the performance over the past few years, CHAILEEDO compiled Shanghai Jahwa’s semi-annual performance for the past five years. From the first half of 2020 to 2024, Shanghai Jahwa’s revenues were 33.21 billion yuan ($4.66 billion), 36.29 billion yuan ($5 billion), 37.15 billion yuan ($5.2 billion), 42.11 billion yuan ($5.9 billion), and 36.85 billion yuan ($5.17 billion), with year-on-year growth rates of -8.51%, -2.3%, -11.76%, 14.26%, and -6.07% respectively. Except for 2021, revenues have shown a decline. Profits have fluctuated significantly, with double-digit changes year-on-year.
CHAILEEDO noted that Shanghai Jahwa’s financial report for the first half of 2024 differs somewhat from previous reports, with the most notable change being in departmental reorganization.
According to the report, Shanghai Jahwa’s original Beauty Skincare and Maternal and Child Health Division has been renamed the Beauty Division, with its brands reduced from seven to four, including Dr. Yu, Herborist, Herborist Derma, and VIVE. The Personal Care Division retains the brands Liushen and Maxam. Additionally, a new Innovation Division has been established, including brands like Qiuchu, Jiaan, and Gaofu.
Specifically, the Personal Care division was the primary source of income for the company in the first half of this year, with operating revenue of 15.88 billion yuan ($2.23 billion), the only department with revenue exceeding 10 billion yuan ($1.4 billion). In the first half of this year, overseas branches generated 7.14 billion yuan ($1 billion) in revenue, the Beauty division had revenue of 5.66 billion yuan ($793.7 million), and the Innovation division generated 4.47 billion yuan ($626.8 million).
Looking at the performance in the second quarter of 2024 (April to June), Shanghai Jahwa’s Personal Care, Beauty, Innovation, and Overseas divisions earned 5.61 billion yuan ($786.6 million), 2.69 billion yuan ($377.2 million), 2.06 billion yuan ($288.9 million), and 3.78 billion yuan ($530 million) respectively. The average selling prices of the main products in the Personal Care and Overseas divisions remained relatively stable compared to last year, while the Beauty division saw a 6.8% decline, and the Innovation division saw a 14.91% year-on-year increase.
It’s worth mentioning that in the first half of 2024, Shanghai Jahwa did not disclose specific data for each channel. However, in the financial report, Shanghai Jahwa mentioned that “the focus of online channels will be on interest-based e-commerce, developing emerging e-commerce and stabilizing platform e-commerce, focusing on building online operational capabilities centered around content; offline channels will attempt to expand retail channels and improve efficiency in conjunction with market conditions, breaking through successful retail channels.”
In fact, at the 2023 Shanghai Jahwa Annual Shareholders’ Meeting held earlier, Shanghai Jahwa CEO Lin Xiaohai mentioned that the company is focusing on traditional offline or traditional e-commerce platforms, paying attention to interest-based e-commerce, which has rapidly emerged in recent years but still lacks corresponding capabilities. In the future, there is a need to quickly enhance the capabilities of interest-based e-commerce and drive overall channel development through online channel development.
It is evident that online channels will remain a key focus for Shanghai Jahwa, with interest-based e-commerce being a top priority in its channel strategy.
Shanghai Jahwa welcomes a major transformation
In addition to releasing the financial report for the first half of 2024, Shanghai Jahwa also announced today the resignation and appointment of the company’s Chief Financial Officer.
The announcement stated, “Due to the internal work adjustment needs, Han Min resigned from the position of Chief Financial Officer of the company, and after resignation, will continue to serve as Vice General Manager and Board Secretary of the company.” Luo Yongtao, who previously served as Board Secretary of Ping An Pension Insurance Company and Chief Financial Officer of Financial OneAccount, has taken over as the Chief Financial Officer of Shanghai Jahwa.
In fact, since the appointment of the “new leader” Lin Xiaohai, Shanghai Jahwa has undergone a series of personnel changes. According to CHAILEEDO’s verification, in early July, Shanghai Jahwa internally announced personnel changes, appointing Chen Min as the General Manager of the Beauty Division, Qian Wei as the General Manager of the Innovation Division, and Xu Xin as the Brand Director of the Dr. Yu brand under the Beauty Division. In late July, the former Chief Marketing Officer (CMO) of Pechoin, Ye Wei, was appointed as an external brand marketing consultant for Shanghai Jahwa. On August 1st, Shanghai Jahwa announced that the Vice General Manager Ye Weimin had resigned.
It can be said that this year marks the largest-scale personnel adjustment for Shanghai Jahwa in nearly 10 years.
In the latest disclosed financial report for the first half of 2024, Shanghai Jahwa also stated, “During the reporting period, the company attracted breakthrough talents to join, solidifying the advancement of flat management, further enhancing operational and decision-making efficiency, and planning to subsequently close subsidiaries and branches under the subsidiary Shanghai Jahwa Sales Co., Ltd., with related businesses being incorporated into Shanghai Jahwa Sales Co., Ltd.”
In addition to the aforementioned organizational restructuring and series of personnel changes, Shanghai Jahwa has strengthened its brand planning. According to the financial report for the first half of 2024, Shanghai Jahwa has categorized brands into tiers, with the first tier being Liushen and Dr. Yu, the second tier consisting of MAXAM and Herborist, and the third tier comprising other brands.
Shanghai Jahwa stated in the financial report, “Categorizing brands into tiers prioritizes brand development and focuses resources, redefines the mission and vision of brands, clarifies the core value propositions of brands, and maintains strategic focus.” Additionally, brands will center around consumers, align with positioning, find the most precise channels, and create a differentiated channel matrix.
In fact, these changes align closely with the brand planning previously disclosed by Lin Xiaohai. At the annual shareholder meeting held earlier in 2023, Lin Xiaohai publicly stated that apart from Liushen and Dr. Yu, few brands of Shanghai Jahwa have clear positioning, lack a distinct user profile, thereby affecting product design accuracy.
As the ancients say, “No pain, no gain.” Entering a new consumer environment and facing the continuous rise of domestic brands, whether Shanghai Jahwa under the “Lin Xiaohai era” can soar against the wind, perhaps still needs some time to validate.
