On November 20, Mao Geping Cosmetics Co., Ltd. (hereinafter referred to as "Mao Geping") announced that it has successfully passed the listing hearing of the Hong Kong Stock Exchange, and plans to launch a pre-roadshow (PDIE) on the same day, and is expected to officially launch an initial public offering (IPO) in December, with a target transaction size of about US$300 million.

The listing plan marks an important step for Mao Geping in the capital market, and is expected to become the "first stock of domestic cosmetics in Hong Kong". Previously, Mao Geping had submitted a listing application to the Hong Kong Stock Exchange on October 9, with CICC as its sole sponsor.

According to the data, Mao Geping was founded in 2000 by Mao Geping, an iconic figure in China's beauty industry. At present, the company has two beauty brands, MAOGEPING and Zhiai Lifetime. According to Frost & Sullivan, Mao Geping is the only Chinese company among the top 10 high-end beauty groups in the Chinese market, ranking seventh in terms of retail sales in 2023, with a market share of 1.8%. It is second only to Chanel of France with a 2% market share in the country. The top five international beauty groups account for 55.4% of the market share.

According to the prospectus, Mao Geping's company will achieve revenue of 1.577 billion yuan, 1.829 billion yuan, and 2.886 billion yuan from 2021 to 2023, with a compound annual growth rate of 35.3%, and a net profit of 331 million yuan, 352 million yuan, and 664 million yuan respectively, with a compound annual growth rate of 41.6%.

In the first half of this year, Mao Geping's revenue continued to maintain rapid growth, reaching 1.972 billion yuan, a year-on-year increase of 41%, and industry insiders expect that its revenue this year may exceed 4 billion yuan for the first time. According to Frost & Sullivan, Mao Geping's revenue growth has significantly exceeded the industry average.

However, Mao Geping's road to listing was not smooth, and he had passed by the "first domestic beauty stock" several times, and submitted the form five times in eight years, but there was no result.

In 2016, the company submitted a prospectus to the Shanghai Stock Exchange for the first time, and terminated the IPO in 2017. In 2018, Mao Geping's largest external investor, Jiuding Group, was investigated by the China Securities Regulatory Commission (CSRC) for allegedly violating securities laws and regulations, and a number of IPO plans related to Jiuding were postponed or terminated. An industry analyst once said, "Mao Geping's IPO process has actually been implicated by Jiuding, which has led to the market and regulators being more cautious about its listing application, increasing the difficulty of IPO, and also affecting investor confidence." ”

In 2021, Mao Geping made his first start, but still failed; In March 2023, the company restarted its IPO again, and in January this year, Mao Geping chose to voluntarily withdraw its listing application in A-shares.

The previous three failed IPOs in the A-share market prompted Mao Geping to turn the battlefield to Hong Kong stocks. On April 8, Mao Geping submitted a prospectus to the Hong Kong Stock Exchange for the first time, and because the prospectus expired for six months, the listing application was updated again on October 9, so far, Mao Geping Company has submitted a listing application for the fifth time.

During the eight years of Mao Geping's sprint to go public, a number of domestic beauty brands established during the same period and later established have entered the capital market, including Proya (603605. SH), Marubeni Co., Ltd. (603983. SH), Bloomage Biotech (688363. SH) and so on.

According to the prospectus, in the past three years, Mao Geping's gross profit margin has been above 80%. In the first half of 2024, its gross profit margin will reach 84.9%, far exceeding the gross profit margin of first-tier international brands such as L'Oreal, Estee Lauder, and Shiseido. Compared with the 91.76% gross profit margin of Kweichow Moutai, the leader in the liquor industry, Mao Geping's gross profit margin is only 6.86 percentage points lower. In this regard, Mao Geping said that the company mainly sells products through the direct sales model of department stores, department store self-operated counters and e-commerce self-operated sales models, which make the gross profit margin relatively high.