The Zhitong Finance App learned that according to the Hong Kong Stock Exchange disclosure on April 8, Mao Geping Cosmetics Co., Ltd. (Mao Geping) submitted a listing application to the main board of the Hong Kong Stock Exchange, and CICC is its sole sponsor.
Mao Geping is a leading high-end beauty group in China. It is committed to providing consumers with a full range of beauty experiences through high-quality and innovative beauty products, professional makeup art training, and experiential and personalized customer service. According to Frost & Sullivan, Mao Geping is the only Chinese company among the top ten high-end beauty groups in the Chinese market, ranking 8th in terms of retail sales in 2022. According to Frost & Sullivan, China's high-end beauty market grew at a CAGR of 9.3% from 2017 to 2022, reaching RMB 182 billion in 2022, and is expected to continue growing at a CAGR of 10.2%, reaching RMB 295.7 billion in 2027.
With insight into the preferences of Chinese consumers, China Beauty Group can better meet the growing demand driven by cultural pride and recognition of Oriental aesthetics. According to the same source, the market size of Chinese domestic beauty brands grew at a CAGR of 11.0% from 2017 to 2022, higher than the 6.6% CAGR of international beauty brands during the same period.
China is the second-largest cosmetics market in the world, with retail sales accounting for 11.8% of the global cosmetics industry market share in 2022. According to Frost & Sullivan, China's cosmetics industry showed rapid growth from 2017 to 2021 due to increased consumer spending, which was partially offset by the impact of the 2022 pandemic on the cosmetics industry. In terms of retail sales, the market size of China's cosmetics industry grew from 640.2 billion yuan in 2017 to 909.1 billion yuan in 2022, with a compound annual growth rate of 7.3%. Among the world's major economies, China's cosmetics industry is growing the fastest. According to Frost & Sullivan, in terms of retail sales, the market size of China's cosmetics industry is expected to reach RMB 1,350.5 billion in 2027, with a compound annual growth rate of 8.2% compared with 2022.
According to information, Mao Geping's makeup products mainly include foundation, highlighter and contouring, lip makeup, and eye makeup. In addition, its skincare products mainly include creams, eye care, masks, serums, and cleansers. Some of the company's best-selling products (such as the light-sensitive non-marking powder series and luxury caviar mask) have been widely recognized in the market. The two products achieved retail sales of over RMB 300 million and RMB 600 million respectively in 2023. As of December 31, 2023, the company's product portfolio included 378 single products covering two categories.
On the financial side, in 2021, 2022 and 2023, Mao Geping achieved revenue of approximately RMB 1,577 million, RMB 1,829 million and RMB 2,886 million respectively; profit during the year was approximately RMB 331 million, RMB 352 million and RMB 663 million respectively.
It should be noted that the prospectus specifically reminds investors that the company mainly competes with other high-end beauty brands in China's high-end beauty industry. According to Frost & Sullivan, China's high-end beauty industry is relatively concentrated. The top five brands account for 31.5% of the market share in retail sales, and they are all international beauty brands. Mao Geping's effective competitiveness depends on many factors, including brand reputation, product innovation and utility, competitive price, quality, production efficiency, and sales and marketing strategies. Some of the company's competitors may have better financial, technical, and marketing resources, higher brand awareness, longer operating history, and larger customer base.
Mao Goping may also face pricing competition from existing competitors or new entrants, which may result in lower prices or lower profit margins, thereby adversely affecting profitability. If effective competition is not possible, the company's market share may decline, and its business, financial position and operating performance may be significantly adversely affected.