Mao Geping's company lasted five years at the end of the meeting, and "the first share of domestic makeup artists to create their own makeup" is coming

Text/Yangcheng Evening News all-media reporter Ding Ling

In November last year, Perfect Diary's parent company, Yixian E-commerce, successfully went public in the United States, marking the official opening of the door of the capital market for domestic makeup brands. Nowadays, the A-share market will also usher in domestic makeup brands. On October 21, the official website of the China Securities Regulatory Commission showed that Mao Geping Cosmetics Co., Ltd. (hereinafter referred to as "Mao Geping Shares") (the first offering) was approved at the 113th meeting of the NDRC this year, and is expected to become the first share of domestic makeup artists to create their own makeup.

However, the road to the listing of Mao Geping shares can be described as quite bumpy. As early as December 23, 2016, Mao Geping co., Ltd. submitted a prospectus to seek an A-share IPO, and intended to apply for listing as the "Shanghai Main Board". However, after the prospectus was updated in September 2017, the IPO process came to a standstill and there has been no progress until recently, when the official website of the CSRC showed that Mao Geping's shares were first raised.

The core brand "MGPIN" contributes 70% of revenue

Speaking of Mao Geping, we have to mention the TV series "Wu Zetian" broadcast in 1995. Under the makeup skills of the earth-shattering "head changing technique", Liu Xiaoqing, who was 43 years old at the time, played Wu Zetian, who was 15 to 80 years old, which made Liu Xiaoqing usher in the second spring of his career, and also made makeup artist Mao Geping well known and was known as "magic makeup artist".

However, just when the scenery was unlimited, Mao Geping made a bold decision - to leave the film and television circle for a while and start a business.

In 1998, Mao Geping founded Mao Geping Makeup Art Co., Ltd. in Hangzhou, in 2000 he founded Zhejiang Mao Geping Image Design Art School, in the same year, The predecessor of Mao Geping Cosmetics Company, Hangzhou Huidu, was established; in 2015, the company changed its name to Mao Geping Cosmetics Co., Ltd.

According to the prospectus, Mao Geping co., Ltd. is mainly engaged in the research and development, production, sales and makeup skills training business of makeup and skin care series products, and has two major brands of "MGPIN" and "Beloved Life".

Among them, "MGPIN" is named after the founder Mao Geping, is the company's core brand, price positioning, "MGPIN" average price of 300-450 yuan, comparable to Lancôme, Estée Lauder and other international first-line brands. At the same time, "MGPIN" is also the revenue pillar of Mao Geping shares. From 2014 to January to June 2017, the brand's revenue was 192 million yuan, 214 million yuan, 247 million yuan and 142 million yuan, accounting for 71.61%, 69.23%, 74.16% and 72.80% of the total revenue, respectively. In terms of sales model, "MGPIN" is mainly based on the direct operation mode of department stores, and as of June 30, 2017, "MGPIN" has a total of 135 department store counters nationwide.

In contrast, the "Beloved Life" positioning is more popular. The average price is 150-260 yuan, mainly in the distribution model. From 2014 to January to June 2017, the brand's revenue was 46.65 million yuan, 50.63 million yuan, 37.15 million yuan and 22.07 million yuan, and its revenue accounted for 17.42%, 16.38%, 11.16% and 11.31% respectively.

According to the prospectus, e-commerce accounted for about 2% of the channels at that time. However, in the past four years, the sales model of beauty products has undergone earth-shaking changes, and the proportion of online channels has increased year by year, and at present, Mao Geping shares are also vigorously expanding various online sales channels.

In May 2019, Mao Geping's makeup change video taken in his early years became popular at Station B; in August, the video content of Mao Geping's makeup change for beauty blogger "Late Night Teacher Xu" rushed to Weibo's hot search. Since then, Mao Geping has frequently cooperated with various bloggers, and in May 2020, he entered the B station as a "well-known makeup artist and founder of MAOGEPING brand", because of its outstanding makeup technology, netizens even said that they "want to send Mao Geping a head".

The outsourcing model of product production has aroused the attention of regulators

However, while the heat remains high, the hidden worries about the development of Mao Geping shares have gradually become prominent. Among them, the outsourcing model of the production of Mao Geping's shareholding products has aroused the attention of regulators.

According to the prospectus, Mao Geping shares did not build its own production facilities, and the products were mainly processed by entrusting outsourcing factories. During the reporting period, there were five cooperative subcontractors, including Shanghai Zhixin Biotechnology Co., Ltd., Atene Technology (Suzhou Industrial Park) Co., Ltd., Shanghai Dongse Daily Chemical Co., Ltd., Cosmex (China) Cosmetics Co., Ltd., and Shanghai Manuma Cosmetics Co., Ltd.

According to the official website, as an OEM/ODM enterprise of cosmetics (skin care products, makeup, etc.), the main customers of Shanghai Manuma Cosmetics Co., Ltd. include L'Oréal, Baijiling, Dior, Shiseido, Galan, Nature Hall, Procter & Gamble, Meisu, Kanebao, October Mommy, etc.

In addition, Cosmex is a world-renowned Korean cosmetics manufacturer serving more than 370 brand customers worldwide, including international brands such as L'Oréal, Procter & Gamble, Unilever, Amorepacific, Lancôme, Estée Lauder, Shiseido, as well as domestic brands such as Baijiling, Nature's Hall, Huaxizi, Perfect Diary, Kazilan, and Xiangyi Materia Medica.

In this regard, some insiders said that with the emergence of various new channels, the traditional cosmetics distribution channel control difficulty gradually increased, if the cosmetics company has a factory, the entire process in hand, the upstream and downstream supply chain will be more certain, but also more conducive to quality control.

At the meeting of the NDRC, the members of the NDRC asked Mao Geping to explain "the reasons and rationality of the higher amount of procurement from Alltech Technology and Shanghai Zhixin Biologics, whether there is a significant dependence on specific outsourcing processing manufacturers such as Atenery Technology and Shanghai Zhixin Biology, and whether there is a business risk that outsourcing processing manufacturers cancel cooperation; the main difference between Mao Geping's core competitiveness and comparable companies, and the reasons and rationality of gross profit margins higher than those of first-line brands in the case of research and development capabilities and brand awareness are not as good as first-line brands".

A number of domestic cosmetics brands have landed on the A-share market

At the moment when the beauty economy is prevalent, the head domestic brands have not only achieved market breakthroughs in the field of makeup, but also performed well on the skin care track, and began to enter the capital market while quickly seizing market share. In addition to the Yixian e-commerce company listed in the United States every year and Mao Geping shares that have just passed the meeting, many domestic cosmetics brands, including Bethany, Marumei shares, Polaria, and Shanghai Jahwa, have also landed on the A-share market.

Cosmetics companies with a market value of more than 100 billion yuan are rare in China, and there are very few international eyes, but betini (300957) who "goes out of the circle" with the explosive single winnatt cream is one of them.

As bethanie's main product, Winona, who is aimed at "sensitive skin" and birth-free medicine factory, has accumulated a large amount of clinical auxiliary treatment experience through deep ploughing in hospital and pharmacy channels in the early stage, and successfully established a professional reputation in the circle of doctors. Then the all-round layout of e-commerce channels, joint doctor KOL live Q&A to establish a professional reputation, so that Winona in just a few years to absorb powder amazing, so as to smoothly build e-commerce into its revenue mainstream channels, and become the domestic dermatological skin care products market share of the first product, which may provide a certain experience for the counterattack of domestic skin care brands.

Bethany has also gained the favor of the capital market. Since its listing in March 2021, Bethany's market value has reached the highest level of 100 billion yuan, reaching 113.7 billion yuan (closing price on July 14, 2021), and successfully promoted to the "first sister" of domestic cosmetics.

Compared with Bethany, who ushered in a highlight moment in the creation of Wang Fried's single product, Marumei Shares (603983), which has been listed for two years, seems to be a little confused, and the performance is under pressure and frequently changes the use of the raised funds.

According to the semi-annual report, in the first half of this year, the operating income of Marumei shares was 874 million yuan, an increase of 10.09% year-on-year; the net profit attributable to the mother was 189 million yuan, down 29.46% year-on-year. The decline in the performance of Marumei shares was mainly due to the fact that offline channel sales were less than expected. In the first half of this year, the offline channel revenue of Marumei co., Ltd. was 356 million yuan, down 3.14% year-on-year and 16.65% month-on-month. Among them, the revenue of daily chemical franchise stores fell by 17.2% year-on-year, and the department store counters and beauty salon channels increased by 23.39% and 13.06% respectively year-on-year.

In terms of the use of the raised funds, according to the announcement issued by Marumei on August 28, 2021, the company's board of directors passed a resolution to change the use of the funds raised in the listing. The resolution plans to change the projects originally used for the upgrading of marketing networks and smart terminals to "marketing upgrades and operation headquarters construction projects". It is worth mentioning that this is the second time that Marumei shares have changed the use of the raised funds. As of June 30, 2021, only $41 million had been invested in the net proceeds of $790 million.

Source | Yangcheng Evening News Yangcheng Pie

Editor-in-charge | Wang Haiyan