(Text/Observer Network Li Pengtao Editor/Yin Zhe) By changing the head of "Wu Zetian" and helping the well-known KOL Teacher Xu change his makeup, Mao Geping, the "big man" of the domestic beauty circle who was angrily praised by netizens for "magic hand rejuvenation", is about to land on A shares with Mao Geping Cosmetics Co., Ltd. (hereinafter referred to as Mao Geping), which he founded.
On October 21, Mao Geping's initial meeting was approved, just one step away from landing in A shares.
As early as December 2016, Mao Geping submitted a prospectus to the Shanghai Stock Exchange to seek an A-share IPO. However, after Mao Geping resubmitted the prospectus in 2017, he suspended the review.
For the next 5 years, Mao Geping has been in a state of "pre-disclosure update", and his prospectus has not been updated since 2017.
However, the observer network noted that as Mao Geping, who is about to become the "first share of A-share domestic cosmetics", its revenue mainly relies on the MGPIN brand, accounting for 70% of the total revenue, and all its brands are OEM production, and the investment in research and development is even less pitiful.
According to the 2017 prospectus, Mao Geping's IPO intends to raise nearly 512 million yuan. In addition to supplementing working capital, the main purposes of this fundraising include channel construction (about 44.7%), R&D center construction (about 13.9%), and image design training institution construction (about 11.9%).
Single-brand revenue accounted for 70%.
According to public information, Mao Geping, formerly known as Hangzhou Huidu, was established in 2000. In 2015, the company named itself after its founder, Mr. Mao Geping, and renamed Hangzhou Huidu to Mao Geping Cosmetics Co., Ltd.
Mao Geping is mainly engaged in the research and development, production, sales and makeup skills training business of makeup and skin care products. The company's brands include "MGPIN" and "Beloved For Life" two brands.
Although Mao Geping's prospectus is still stuck in September 2017, Mao Geping's fundamentals can still be glimpsed from this prospectus.
It is worth noting that the national enterprise credit information publicity system had disclosed Mao Geping's performance from 2018 to 2020, but two days before the CSRC issued the 113th Working Conference (October 13), Mao Geping's annual report from 2013 to 2020 had a record of revisions.
According to the prospectus, from 2014 to the end of June 2017, Mao Geping achieved revenue of 280 million yuan, 321 million yuan, 343 million yuan and 201 million yuan respectively; the net profit attributable to the mother in the same period was 47.1126 million yuan, 54.6247 million yuan, 53.3197 million yuan and 35.6197 million yuan, respectively, and the overall performance showed a stable and rising trend.
According to the operating data published by the state enterprise credit information, in the past two years, Mao Geping's performance growth rate has accelerated.
Specifically, the company achieved revenue of 389 million yuan, 556 million yuan and 730 million yuan from 2018 to 2020, respectively; net profit was 81.8846 million yuan, 125.5 million yuan and 174.8926 million yuan, and the net profit in 2019 and 2020 increased by 53.27% and 38.36% year-on-year, respectively.
From the perspective of the composition of main business income, MGPIN, a makeup brand, accounts for 70% of Mao Geping's total revenue, and is heavily dependent on a single brand.
From 2014 to the end of June 2017, mgpin brands achieved revenue of 192 million yuan, 214 million yuan, 247 million yuan and 142 million yuan, accounting for 71.61%, 69.23%, 74.16% and 72.8% of the total revenue, respectively.
In the same period, another makeup brand "Love Forever" achieved revenue of 46.6512 million yuan, 50.6355 million yuan, 37.1547 million yuan and 22.0739 million yuan, accounting for less than 20% of the total.
In addition, the makeup training business revenue in the same period was 25.4843 million yuan, 39.0731 million yuan, 42.0896 million yuan and 36.6195 million yuan, respectively.
After understanding, it was found that Mao Geping's brand "MGPIN" and "Beloved Lifelong" products cover skin care series (including basic skin care, luxury skin care, etc.), makeup series (including isolation, concealer, etc.), tool series (including makeup brushes, eyelash clips, etc.).
In terms of product positioning, MGPIN brand positioning as a high-end brand, mainly in the high-end department store counter direct operation model, is a local high-end cosmetics brand for urban women, the average price of products between 300 yuan and 450 yuan.
The Zhi'ai Lifelong brand is positioned as a female consumer in second- and third-tier cities, and is committed to improving the company's product coverage group and sales area, with an average price of between 150 yuan and 260 yuan.
"It feels like Mao Geping has been eating the old Ben"
As a high-end brand, Mao Geping's investment in research and development is far lower than that of comparable companies in his peers.
According to the prospectus, from 2014 to the first half of 2017, Mao Geping's research and development expenses were 2.4469 million yuan, 3.0511 million yuan, 3.4227 million yuan and 1.5717 million yuan, accounting for only 0.88%, 0.95%, 1.00% and 0.78% of the total revenue, respectively.
During the same period, Shanghai Jahwa's R&D expenses from 2014 to 2017 were 140 million yuan, 131 million yuan, 125 million yuan and 161 million yuan, accounting for 2.62%, 2.24%, 2.35% and 2.48% of the total revenue, respectively.
As of the end of June 2017, Mao Geping's R&D team had only 15 people, accounting for 1.14% of the company's total number of 1321 people. And the R&D team also includes Mao Geping and Mao Huiping siblings, two college students and three secondary school students.
Mao Geping, who did not attach importance to research and development, eventually led to the company's slow product updates. As of the first half of 2017, Mao Geping had only 4 research projects. Currently, these 4 series are the company's best-selling items.
In addition, Mao Geping's makeup products have basically not been updated since 2014. At present, the best-selling makeup items are still MGPIN highlighters and foundation creams.
In this regard, some consumers preached to the Observer Network, "I feel that Mao Geping has been eating the old book, not thinking of making progress, and his product line is single and easy to use, and there are only a few word-of-mouth models, which are like a day for several years." ”
In addition to the small investment in research and development, Mao Geping does not have an independent production line, and all its products are OEM production, mainly in the form of "outsourced processing" and "outsourcing system".
Among them, the outsourcing processing method is that the company independently completes the procurement of raw materials, delivers the raw materials to the outsourcing processor, and the outsourcing processor processes and produces the finished product according to the requirements of Mao Geping.
According to the requirements of Mao Geping, the outsourcing processor completes the production of raw materials, and then the outsourcing manufacturer will inspect the qualified material body for blending, filling, and finally the finished product inspection into the warehouse.
According to the prospectus, the outsourced processing costs of the "MGPIN" brand and the "Beloved Life" brand account for more than 50% of the total product cost.
The "2020 Domestic Makeup Market Research Report" pointed out that in order to quickly enter the market, most domestic makeup brands rely on OEM production. This has led to a situation where a foundry is working for multiple brands at the same time, and products of different brands are converging.
Products out of the circle rely on personal IP
Judging from the gross profit margin data, Mao Geping can be described as "financial resources rolling in".
Specifically, The comprehensive gross profit margin of Mao Geping in 2016 was 78.22%, of which the gross profit margin of MGPIN brand and Zhiai Lifelong brand was 85.03% and 68.14% respectively.
Compared with the comprehensive gross profit margin of peers in the same period, Mao Geping's comprehensive gross profit margin not only exceeded the average of comparable companies by 76.19%, but also surpassed L'Oréal, Shiseido, Natural Beauty and other international brands, second only to L'Occitane's 83.32%.
Mao Geping explained in the prospectus that it is mainly due to the difference in product structure (mainly high-end) and production mode (all outsourced processing methods). However, whether Mao Geping still maintains this high gross profit level to this day has yet to be disclosed in the updated prospectus.
In addition to the high gross profit of the product, in recent years, Mao Geping's channel strategy has gradually been "refined".
In the early stage, Mao Geping focused on the sales channels offline. According to the prospectus, as of June 30, 2016, Mao Geping had a total of 115 department stores nationwide.
CBNData data shows that as of March 2020, Mao Geping's counters across the country have increased to 224, and these counters bring 70%-80% of their revenue.
In the past two years, as online channels have contributed major increments to China's cosmetics market, Mao Geping is also trying to seize the opportunities of online channels.
After the makeup video of the cooperation with the blogger "Late Night Teacher Xu" became popular, the Mao Geping brand began to appear frequently in the video of the B station beauty up master and the Little Red Book post.
Based on the founder Mao Geping's own professional image IP and influence in the B station, many post-90s and post-00s have become fans of Mao Geping, and its eponymous brand MGPIN series products are gradually known by consumers, and the single MGPIN highlight cream frequently "goes out of the circle".
At the same time, Mao Geping also began to cooperate with the head anchor of the Tao department. In this year's Singles Day pre-sale event, mao's brand "MGPIN" two-color concealer, foundation cream and honey powder three products entered the Via Double Eleven live broadcast room.
Mao Geping's Taobao flagship store shows that as a "star product", the two-color concealer has the highest sales volume, reaching 80,000 sales; the number of purchases of foundation cream also exceeds 30,000.
As of October 21, mgpin Taobao flagship store sales list, the top of the price of makeup products between 100-300 yuan, its main high-end skin care line is "rarely asked".
In addition, Mao Geping also opened a douyin e-commerce live broadcast. According to the research report of Guoyuan Securities, in June this year, Mao Geping became the second domestic brand in the Douyin e-commerce makeup category, second only to Huaxizi, with a GMV of 31.16 million, an increase of nearly 7 times from the previous month.
At present, domestic A-shares have not yet listed makeup companies. If Mao Geping is successfully listed, it will not only mean that the company will become the "first share of A-share domestic makeup", but also mean that Chinese makeup brands will add another "general" in the capital market.
This article is an exclusive manuscript of the Observer Network and may not be reproduced without authorization.