Mao Geping Cosmetics Co., Ltd. (hereinafter referred to as "Mao Geping") was once considered to be the seed player of "the first share of domestic makeup". However, since the official submission of the prospectus in 2016, it has been 5 years since the beginning of the year, and Mao Geping's road to listing still seems to be far away.
Red Star Capital Bureau found that about 70% of Mao Geping's revenue came from the high-end brand MGPIN series, which had a gross profit margin of more than 85%. However, Mao Geping, who is bent on taking the high-end route, does not produce products himself, nor does he have the same as his peers in research and development and advertising investment.
Mao Geping Image source: IC photo
70% of revenue comes from the MGPIN series
26 years ago, Liu Xiaoqing, who was more than 40 years old, played Wu Zetian from the age of 15 to 80 in the TV series "Wu Zetian", which was impressive. This drama not only allowed Liu Xiaoqing to usher in the second spring of his career, but also won the popularity of Liu Xiaoqing's makeup artist - Mao Geping.
After becoming famous in world war I, Mao Geping began to jump out of the position of a professional makeup artist and create his own cosmetics brand. In July 2000, Hangzhou Huidu, the predecessor of Mao Geping Cosmetics Company, was established, and the registered capital before the overall change was 60 million yuan. In 2015, the company changed its name to Mao Geping Cosmetics Co., Ltd.
According to the prospectus, Mao Geping 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 "Love for Life". Among them, MGPIN, named after founder Mao Geping, is the core brand of the company, positioning high-end brands, mainly based on the direct sales model of department stores; while Zhi'ai Lifelong is mainly based on the distribution model, targeting consumers in second- and third-tier cities.
Based on the prospectus released in 2017 and the relevant data queried in the national enterprise credit information publicity system, Red Star Capital Bureau sorted out Mao Geping's performance from 2014 to 2020. It can be seen that in addition to a slight year-on-year decline in net profit in 2016 and a year-on-year decline in operating income in 2017, Mao Geping's performance growth is generally stable, and the performance growth rate in the past three years has accelerated.
From the perspective of the composition of the main business income, MGPIN supports most of Mao Geping's revenue. According to the prospectus, from 2014 to the first half of 2017, the sales revenue of the MGPIN series was 192 million yuan, 214 million yuan, 247 million yuan and 142 million yuan, accounting for about 70% of the main business income in each period.
The operating income of another brand of Beloved Lifetime Series products was only 46.6512 million yuan, 50.6355 million yuan, 37.1547 million yuan and 22.0739 million yuan in the same period, accounting for less than 20% and the downward trend was obvious.
In addition, makeup training is also one of Mao Geping's main businesses. From 2014 to the first half of 2017, Mao Geping's revenue and proportion from makeup training were 25.4843 million yuan (9.52%), 39.0731 million yuan (12.64%), 42.0896 million yuan (12.64%), and 26.6195 million yuan (13.64%), both of which are constantly improving.
The comprehensive gross profit margin is nearly 80%, which exceeds that of Shiseido and L'Oréal
Better than the performance data is Mao Geping's gross profit margin data.
From 2014 to the first half of 2017, Mao Geping's comprehensive gross profit margin was 81.50%, 79.70%, 78.22% and 78.88%, respectively. This figure is significantly higher than L'Oréal, Shiseido, Shanghai Jahwa (600315. SH) is a comparable listed company in the same industry, with a gross margin similar to that of L'Occitane.
Mao Geping explained in the prospectus that the company's gross profit margin level is slightly higher than L'Oréal, Shiseido, etc., mainly due to differences in product structure. L'Oréal and other international brands have high awareness, business and products have achieved diversified development, its business and products have achieved diversified development, its business a variety of sub-brands, covering high-end and low-end cosmetics, hairdressing and daily care products, while the company mainly does high-end makeup and skin care products.
It is worth mentioning that the gross profit margin of MGPIN series products positioned as high-end brands from 2014 to the first half of 2017 was as high as 87.21%, 86.36%, 85.02% and 85.95%, respectively. In this regard, Mao Geping said that in view of the FACT THAT the MGPIN brand is mainly based on the direct operation mode of high-end department stores and is a local high-end cosmetics brand for urban women, the gross profit margin of MGPIN brand products is higher.
Product OEM, neither research and development, nor marketing
Mao Geping, who focuses on high-end brands, still has a big gap in research and development strength compared with listed companies in the same industry.
According to the company's 2017 Prospectus, as of June 30, 2017, the company's R&D personnel were only 15 people, accounting for 1.14% of the company's total number of 1321 people. Compared with Shanghai Jahwa, the number of R&D personnel in 2015 was 162, accounting for 7.79% of the company's total number.
In terms of research and development costs, Mao Geping is also very stingy. During the reporting period, the company's R&D expenses were 2.4469 million yuan, 3.0511 million yuan, 3.4227 million yuan and 1.5717 million yuan, accounting for 0.88%, 0.95%, 1.00% and 0.78% of the operating income, respectively. Shanghai Jahwa's 2016 annual report shows that the company's total R&D investment in that year was about 124 million yuan, accounting for 2.34% of revenue.
One of the reasons why it is light research and development may be that Mao Geping does not produce products at all. The prospectus shows that the company has not built its own production facilities, and the production of products is mainly carried out through outsourced processing mode.
Foundry process of Mao Geping products
Not only does he not pay attention to research and development, Mao Geping also does not pay much attention to marketing, compared with the overwhelming variety of makeup advertisements, Mao Geping seems to be a little overconfident. From 2014 to 2016, Mao Geping's advertising expenses and business publicity expenses were 11.3271 million yuan, 11.4296 million yuan and 14.4125 million yuan, respectively. In 2016, the company's operating income was 342 million yuan, and advertising accounted for about 4% of revenue.
However, Mao Geping also recognized the shortcomings, and its prospectus said that the marketing of the company's makeup brands in fields such as outdoor hard broadcasting, television media and Internet media still has a lot of room for improvement, and it needs funds to invest in marketing to make up for the current gap with international first-line makeup brands in terms of brand awareness and influence.
In this IPO, Mao Geping intends to issue no more than 20 million shares, and intends to raise nearly 512 million yuan, of which 229 million yuan will be used for channel construction projects, 71.5842 million yuan for R&D center construction projects, 60.9468 million yuan for image design training institution construction projects, and the remaining 150 million yuan for supplementary working capital.
However, Mao Geping's road to listing is still full of uncertainty. From the submission of the prospectus on December 19, 2016, to the storm of "suspension of review", to the change of its IPO materials to the status of "pre-disclosure update" in December 2017 and maintained to this day, where Mao Geping's IPO road will go, Red Star Capital Bureau will continue to pay attention to.
Red Star News reporter Yu Yao Yu Dongmei
Responsible editor Ren Zhijiang
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