Why is the first share of medical beauty mask created by tens of billionaires in Northeast China not so profitable?

"Investor.com" Cai Jun

"The first share of medical beauty masks" Fuerjia (301371.sz, hereinafter referred to as the "company") handed over its first annual report after listing.

In 2023, the company's operating income will be 1.934 billion yuan, a year-on-year increase of 9.29%, and the non-net profit will be 728 million yuan, a year-on-year decrease of 5.06%. Behind the change in growth rate is the production of the company's self-built base and the intensification of industry competition.

Once, Fuerjia created the myth of wealth with medical beauty masks. Nowadays, the new wheels of the times are rolling forward, and the company must not only do a big job, but also do a good job in the supply chain and products, in order to lead the times express.

In the first half of his life, he was triptych with the "nobleman".

In the first half of Zhang Liguo's life, he gradually moved from technology to management, and then got the help of partners and stepped into the fast lane.

In 1986, Zhang Liguo walked out of Heilongjiang University of Traditional Chinese Medicine and worked as a pharmacist in Heilongjiang Provincial Cadre Sanatorium. He majored in Chinese medicine at university, so his first job was a professional match. Since then, personal destiny has also taken root in the black soil.

Three years later, Zhang Liguo came to work in Harbin Pharmaceutical No. 5 Factory and successively served as production scheduling and workshop technical director. In six years, a skilled technician has been polished, but his ideals do not stop there. In 1992, Zhang Liguo took up a business management position as a department manager of Heilongjiang Traditional Chinese Medicine Development Co., Ltd.

From technology to management, Zhang Liguo's career path is clear, but the restless market economy atmosphere of the 90s provokes everyone with lofty ideals. In 1996, Harbin Pharmaceutical No. 5 Factory and Dasheng of the United States jointly established Harbin Sanlian, and it was also in the same year that Zhang Liguo went to sea to start Huaxin Pharmaceutical (later renamed "Wence Technology").

The fate of an individual depends on the course of history as well as on partners. In the early days of entrepreneurship, Zhang Liguo was mainly engaged in the pharmaceutical wholesale business, and many products came from Harbin Sanlian. After accumulating the first pot of gold, he was keenly aware of new opportunities with his technical background, and the time for the company to become bigger came.

In 2012, beauty skin care and skin repair began to rise in China. Zhang Liguo adjusted his business direction and jointly developed the "Medical Sodium Hyaluronate Repair Patch" with Harbin Sanlian, which is commonly known as the medical beauty mask. Two years later, the products developed by the two parties were successfully approved and registered with the trademark "Fuerjia".

After R&D results, the next step is to run through the business model. Huaxin Pharmaceutical Co., Ltd. and Harbin Sanlian are responsible for marketing and production, respectively. With the increase in sales of medical beauty masks, Zhang Liguo's business focus has been adjusted, and in 2017, he set up a separate company, and in 2021, he acquired Beixing Pharmaceutical, a subsidiary of Harbin Sanlian, which is mainly engaged in medical sales of cosmetics and medical devices.

During this time, Fuerjia successfully broke the game. On Double 11 in 2019, the company's medical beauty mask topped the sales list of Tmall's sub-categories. In 2020, the product topped the Weibo list, winning the top sales of fashion and beauty and trendy things. At the same time, the company signed a celebrity spokesperson and appeared in Hunan Satellite TV variety shows to achieve traffic out of the circle.

So far, Fuerjia has stepped over the prototype construction and embarked on the road of rapid development. Up to now, Harbin Sanlian is still one of the shareholders of the company. The medical aesthetic industry created by Zhang Liguo has begun to accelerate into the "new narrative" stage, that is, to land in the capital market.

Billionaires through listing

Fuerjia's breakthrough on the GEM is a change of fate for Zhang Liguo.

In 2021, the company submitted a prospectus to the Shenzhen Stock Exchange for the first time. The following year, the company was renewed twice and passed the meeting in September of the same year. After that, the company did not get the registration approval of the Securities Regulatory Commission, and the listing was stalled for a while.

During this time, the company was questioned by the outside world about the high price and large marketing investment of medical beauty masks. The hustle and bustle surrounding the product has become another kind of traffic.

In 2022, "The cost of a box of 148 yuan Erjia mask is only 10 yuan" appeared on the hot search on Weibo. In the same year, the company's comprehensive gross profit margin reached 83.08%, and the functional skin care products of Bethany and Bloomage Biotech were 75.21% and 78.37% respectively.

In terms of marketing, the company's sales expenses in 2023 will be 532 million yuan, an increase of 36.44% year-on-year. In addition to the flow, the company's "natural person distribution + rebate" model was also discussed. This model is mainly for natural persons to help complete the sale, the company will give them a rebate of 3%-30% as a reward.

In fact, personal distribution is not uncommon in emerging consumer businesses. For example, if you adopt a cow, you will also rebate commissions to distribution personnel. In 2023, the revenue of Fuerjia's offline channels will exceed 100 million yuan, and the sales rebate will be 35 million yuan.

The pressure before going public is not only from the outside world. Earlier, Fu Erjia, Zhang Liguo and Harbin Sanlian had a VAM agreement, stipulating special terms such as pre-emptive subscription rights, preemptive purchase rights, co-sale rights, anti-dilution, sales rights, and more favorable terms. In June 2021, the three parties signed a supplementary agreement, and the relevant agreement was terminated, and the company no longer assumed relevant obligations, but until the completion of the IPO, Zhang Liguo still had repurchase, performance commitment and compensation obligations to Harbin Sanlian.

In other words, listing is a big test for Zhang Liguo. The growth depends on products, and the growth depends on marketing, but the expansion of wealth depends on the capital market. In 2023, the company was finally successfully registered and listed in August. Zhang Liguo and Fu Erjia completed a gorgeous upgrade, and their personal wealth also snowballed.

Up to now, Zhang Liguo holds 84.14% of the company's shares, with a wealth of about 12 billion yuan based on a market value of about 14 billion yuan, making him a "billionaire".

Step into a new narrative

The successful listing of Zhang Liguo and Fuerjia is a transformation and subversion of the traditional beauty industry that has lasted for several years and has been greatly invested in the concept of "medical beauty makeup". However, new concepts are not a panacea, and new entrants are constantly pouring in.

For example, Juzi Biotech has launched a collagen mask, with the brand name "Kefumei", which belongs to the same brand name as the company's "mechanical" products. In 2023, the company's medical dressing revenue will be 861 million yuan, and the company's medical device revenue will be 850 million yuan in the same period.

At present, the medical beauty cosmetics market is entering a new narrative under the leadership of leading players. The front-end competition is the brand's product portfolio and traffic delivery, and what is equally important but difficult for consumers to perceive is the construction and polishing of the back-end supply chain.

In June 2023, the Northern Beauty Valley base of Fuerjia will be put into operation. The base is located in Harbin, with a total construction area of nearly 100,000 square meters, integrating office, R&D, production and warehousing, covering the production of cosmetics and medical devices, and introducing a fully automated three-dimensional warehouse system.

In the company's publicity, North Beauty Valley will increase its own production capacity, improve the efficiency of warehousing and logistics, and ensure the operation of the supply chain. At the same time, the company launched the "lean production" plan, and strive to minimize costs and increase efficiency.

At present, the supply chain is being consolidated, and it is more important for Fuerjia to return to the track of growth. Optimization and iteration around the product continues.

In 2023, the company will have 5 single products with annual sales of more than 100 million yuan, of which 2 are white and black masks for medical beauty masks, and the remaining 3 are acne cleansing and skin repair patches, centella asiatica soothing and repairing patches, and niacinamide whitening and blemish repair masks. When the company was surveyed, it said that "each category of water, milk, and cream must have a certain involvement and layout", and "it is necessary to create more tens of millions of products as a connection".

In terms of investment, whether from the long-term goal or short-term benefits, under the demand of reducing costs and increasing efficiency, the company has released a change node: from talent cooperation to endogenous growth. In the first quarter of this year, the ratio of self-broadcast and Dabo on the company's Douyin platform was about 5:5, but in the future, it plans to increase the understanding of self-broadcasting, and plan the ratio of self-broadcasting and Dabo to 7:3.

This time, what story will be injected into the concept of "medical beauty makeup"? (Produced by Thinking Finance)■