MAOGEPING's performance and net profit both doubled
MAOGEPING Cosmetics Co., Ltd. (hereinafter referred to as "MAOGEPING") officially submitted its IPO application to the Hong Kong Stock Exchange on April 8, 2024, with China International Capital Corporation Limited acting as the exclusive sponsor.
Previously, the company submitted an application to the China Securities Regulatory Commission in December 2016 for listing on the Shanghai Stock Exchange, intending to raise CNY 1.121 billion for channel construction and brand promotion projects, research and development center construction projects, information system upgrade projects, and image design training institution construction projects. However, in January of this year, MAOGEPING withdrew its IPO application; according to relevant regulations, the Shanghai Stock Exchange terminated its IPO review.
Established in 2000, MAOGEPING is mainly engaged in the research, development, production, sales, and cosmetic skills training business of the MAOGEPING and Zhi'ai Zhongsheng (Chinese: 至爱终身) series of cosmetics and skincare products. According to data from Frost & Sullivan, MAOGEPING is the only Chinese company among the top ten high-end cosmetics groups in the Chinese market, ranking eighth by retail sales in 2022.
Data shows that as of December 31, 2023, MAOGEPING's product portfolio includes 378 SKUs from two brands, covering 334 cosmetics SKUs and 44 skincare SKUs. In 2023, sales revenue from cosmetics and skincare products accounted for 58.3% and 41.7% of total product sales revenue, respectively. In terms of pricing, the suggested retail price of MAOGEPING's cosmetics products generally ranges from CNY 200 to CNY 500, while the suggested retail price of skincare products generally ranges from CNY 400 to CNY 800.
In terms of channel distribution, offline channels are the main source of revenue for MAOGEPING. In 2023, revenue from offline channels accounted for 57.6% of MAOGEPING's total product sales revenue. According to publicly available information, as of December 31, 2023, MAOGEPING had 357 self-operated counters nationwide, ranking second among all domestic and international cosmetics brands in China; it has over 3 million registered members, with an overall repurchase rate of 32.8% in 2023.
Online channels are becoming increasingly important for MAOGEPING as well—From 2021 to 2023, the compound annual growth rate of revenue generated by MAOGEPING through online channels was 49.3%, higher than the compound annual growth rate of revenue from offline channels at 28.8%.
In terms of performance, according to the prospectus, from 2021 to 2023, MAOGEPING's revenue was CNY 1.577 billion, CNY 1.829 billion , and CNY 2.886 billion, with a compound annual growth rate of 35.3%; during the same period, net profits were CNY 331 million, CNY 352 million, and CNY 664 million, with a compound annual growth rate of 41.6%, and net profit margins were 21.0%, 19.2%, and 23.0%, respectively.
According to data from Frost & Sullivan, MAOGEPING's revenue growth rate and net profit growth rate from 2021 to 2023 were significantly higher than the industry average. In 2023, the year-on-year growth rates of revenue and net profit were 57.8% and 88.6%, respectively.
In its prospectus, MAOGEPING stated that 25.0% of the proceeds from the IPO will be used to expand its sales network; approximately 20.0% will be used for brand-building activities; about 15.0% will be used for overseas expansion and acquisitions; approximately 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 cosmetic art training institutions; about 5.0% will be used for operations and digitalization of information infrastructure; and approximately 10.0% will be used for working capital and general corporate purposes.