Investment Rating - The report does not explicitly state an investment rating for Eternal Beauty Holdings Core Viewpoints - Eternal Beauty Holdings Limited is the largest perfume brand management company in China, established in 1983 and has been operating in the Chinese market for nearly 40 years [1][7] - The company focuses on long-term value and brand image building rather than short-term discount promotions [4][11] - The business model is primarily B2B, with 80% of operations in brand agency and distribution, and 20% in direct retail [2][8] - The company has exclusive agency rights for over 90% of brands in the Chinese market, covering a comprehensive sales network [9][10] - Eternal Beauty Holdings ranks third in the Chinese perfume market, behind international giants Chanel and LVMH, and offers a diverse range of approximately 2,000 scents across 52 perfume brands [5][12] Summary by Sections Company Overview - Eternal Beauty Holdings is headquartered in Hong Kong and officially listed on the Hong Kong Stock Exchange on June 26, 2025, with an issue price of HK$2.88 per share [1][7] Business Model - The company operates a B2B brand agency and distribution model, ensuring stable profit margins for partners and maintaining long-term relationships [2][8] - Direct retail operations are concentrated in top commercial areas of 13 cities, avoiding lower-tier city channels [2][8] Market Strategy - The company emphasizes full-channel control to maintain stable pricing and prevent market disruption [9][10] - It provides a one-stop solution for brands entering the Chinese market, leveraging its extensive network and market experience [10] Brand Management - Eternal Beauty Holdings prioritizes long-term brand value and customer mindset cultivation, collaborating with brands for over 10 years [4][11] - The company recognizes the personalized nature of perfume consumption in China and tailors its offerings accordingly [5][12]

Core Viewpoint - The stabilization period for the global offering of Ying Tong Holdings (06883) ended on July 23, 2025, which is 30 days after the application deadline for the Hong Kong public offering [1] Group 1: Stabilization Actions - The stabilization agent, BNP Paribas Securities (Asia) Limited, conducted stabilization actions during the stabilization period, including the borrowing of 50.01 million shares from the controlling shareholder, Ying Tong International Limited, to cover the overallotment in the international offering [1] - The shares borrowed will be returned to Ying Tong International according to the terms of the borrowing agreement dated June 24, 2025 [1] - The stabilization agent purchased a total of 50.01 million shares at prices ranging from HKD 2.01 to HKD 2.75 per share during the stabilization period, representing 15% of the total shares available for subscription before the exercise of any overallotment option [1] Group 2: Overallotment Rights - The sponsor and overall coordinator did not exercise the overallotment option during the stabilization period, and the overallotment option expired on July 23, 2025 [2] - As a result, the company will not issue any new shares under the overallotment option, and the selling shareholders will not sell any shares under the overallotment option [2]

Industry Environment - The beauty industry in China is expected to draw lessons from the success of collectible toys, focusing on emotional marketing and cultural influence to enhance user connection and differentiation [1] - The "healing economy" is emerging as a new trend, with the aromatherapy market growing rapidly, driven by increasing consumer demand for wellness services [2] - A potential IPO wave is anticipated in the domestic beauty sector, with several companies like Lin Qingxuan and Gu Yu moving towards public offerings, supported by favorable policies [3][4] Market Trends - The Chinese cosmetics market is undergoing a transformation, with a noticeable "K-shaped" differentiation where high-end international brands are expanding while mid-range and local brands are contracting [5] - The sports beauty segment is projected to reach $31.4 billion by 2028, with brands launching high-performance products to cater to women's needs in fitness scenarios [6] - Recent product launches from luxury brands like Louis Vuitton and Chanel reflect a trend towards innovative and sustainable beauty products [7] Celebrity Influence - The acquisition of Hailey Bieber's brand Rhode by E.l.f. Beauty highlights the importance of product strength and user engagement over mere celebrity endorsement in the beauty market [8][9] Sales Performance - Despite a general decline in consumer spending during the 618 shopping festival, the beauty sector saw a significant increase in sales, with a year-on-year growth of 63.35%, driven by domestic brands [10] Brand Dynamics - The beauty market is entering a "technology equity" era, where brand identity and consumer trust are becoming more critical than product differentiation [11] - During the 618 shopping festival, brands like Pechoin and Natural Hall achieved top rankings, showcasing the effectiveness of technological innovation and cross-industry collaboration [12] Corporate Developments - Estée Lauder's strategic appointment aims to revitalize its makeup brands in response to declining sales [13] - The unique business model of Mao Geping's cosmetics company, with a high repurchase rate, demonstrates the potential for non-standardized services to enhance brand loyalty [14] - L'Oréal's acquisition of Medik8 for approximately €1 billion underscores the growing importance of scientific skincare in the beauty industry [15] Market Entry - The successful IPO of Ying Tong Holdings marks a significant milestone for the Chinese fragrance market, with plans for further brand expansion and channel development [17] Industry Challenges - Major cosmetic companies like Coty and Procter & Gamble are restructuring and downsizing to cope with declining sales and market pressures [18] Strategic Moves - Anta's acquisition of the outdoor brand Jack Wolfskin aims to position it in the mid-range market, leveraging the brand's existing recognition in Europe [19] - The acquisition of the sensitive skin brand Bai Zhi Cui by Juyi Group reflects a trend towards integrating scientific research with skincare, enhancing the brand portfolio [20][21]

Company Overview - Ying Tong Holdings is positioned as the "first stock in perfume" in the Hong Kong IPO market, with a current P/E ratio of 11, significantly lower than Sa Sa International's 22, indicating potential for valuation convergence due to the rapid growth of the Chinese perfume market and Ying Tong's leading position [1] - The company has established itself as the preferred partner for international brands entering the Greater China market, supported by a comprehensive distribution network covering over 8,000 sales points in more than 400 cities [1][2] - Ying Tong holds licenses for 72 internationally renowned perfume and beauty brands, including top luxury names like Hermès Beauty and Versace, with many brands entering into long-term agreements, including recent 10-year contracts [1] Financial Performance - For 2024, Ying Tong is projected to achieve a shareholder profit of HKD 227 million, maintaining a compound annual growth rate (CAGR) of over 14.5% over the past two years, outperforming international peers [2] - The company's gross margin has remained above 50% for the past three years, with net profit margins consistently leading the industry due to effective cost control [2] - The company is focusing on diversifying its sales strategy, with the revenue share from perfume business expected to decrease from 88.5% in 2023 to 80.9% by 2025, while skincare and cosmetics segments are growing rapidly, achieving a CAGR of 56.1% [2] Cash Flow and Dividend Policy - Ying Tong's cash flow is robust, with a net cash flow from operating activities reaching HKD 237 million by March 2025 and a cash balance of HKD 256 million at the end of the period [2] - The management has committed to a dividend payout ratio of no less than 50% in the future, with upcoming interim results expected to support dividend distribution [2] Industry Context - The Chinese perfume market is experiencing rapid growth, with Ying Tong offering over a thousand perfume SKUs that cater to various consumer segments, from budget to high-end [3] - The diverse fragrance designs and application scenarios enhance the company's competitive edge in the market, minimizing the impact of any brand exits on overall business performance [3]

Core Viewpoint - Ying Tong Holdings has successfully listed on the Hong Kong Stock Exchange, becoming China's "first fragrance stock" within a year of submitting its prospectus [1]. Financial Performance - Ying Tong Holdings reported revenues of 1.699 billion yuan, 1.864 billion yuan, and 2.083 billion yuan for the fiscal years ending March 31, 2023, 2024, and 2025, respectively. Net profits for the same periods were 173 million yuan, 206 million yuan, and 227 million yuan [4]. - The company has shown continuous revenue growth, primarily driven by its agency business model, which heavily relies on fragrance brand representation [4]. Business Model and Brand Dependency - The company has secured agency rights for over 60 international fragrance brands, including Hermes, Chopard, Albion, Dolce & Gabbana, and Lola Marc Jacobs. Fragrance sales accounted for 89.3%, 88.5%, and 81.7% of total revenue for the fiscal years 2022 to 2024 [4][5]. - However, the heavy reliance on agency business poses a risk, as many beauty companies are reclaiming brand agency rights. Notably, Kering Group and Richemont Group have announced plans to take back control of their fragrance brands [6]. Brand Authorization Risks - As of March 31, 2025, Ying Tong Holdings has 65 external brands in its portfolio, with 4 brands no longer under its authorization. Among the remaining brands, 22 will see their authorization expire within a year, and 19 within one to three years [6]. - The loss of agency rights has already impacted the company's gross margin, which fell from 48.3% in fiscal 2023 to 45.8% in fiscal 2024 due to a non-renewed distribution agreement with a luxury brand [7]. Market Competition and Funding Needs - The competitive landscape in the cosmetics industry is intensifying, with rising price competition and marketing expenditures. This necessitates additional funding for companies to enhance market competitiveness, making IPO financing a crucial avenue for Ying Tong Holdings [7]. Strategic Initiatives - To mitigate risks and enhance growth, Ying Tong Holdings plans to use part of the raised funds to develop its own brands and invest in external brands. The company has already launched its own eyewear brand, Santa Monica, and entered the fragrance market in 2022 with five products [8]. - Currently, the revenue from self-owned products accounts for less than 1% of total revenue, indicating significant room for growth in this area [8].

Core Viewpoint - The stock price of Ying Tong Holdings, known as the "first stock of perfume," plummeted by 23.96% within two days of its listing, raising concerns among investors about the company's future prospects [1][2]. Company Overview - Ying Tong Holdings is the largest perfume group in China (including Hong Kong and Macau) by retail revenue, excluding brand owners, and ranks as the third-largest perfume group in mainland China and Hong Kong [3]. - The company has a diverse portfolio of brands, including perfumes, cosmetics, skincare products, eyewear, and home fragrances [3]. Financial Performance - For the fiscal years 2022 to 2025, Ying Tong Holdings is projected to have revenues of 1.699 billion, 1.864 billion, and 2.083 billion yuan, with net profits of 173 million, 206 million, and 227 million yuan respectively [4]. Brand Portfolio - As of March 31, 2023, 2024, and 2025, Ying Tong Holdings' brand portfolio includes 52, 65, and 73 external brands respectively, with all licensing agreements still valid [5]. Market Dynamics - The global perfume market grew from 590.7 billion yuan in 2018 to 709.6 billion yuan in 2023, with a compound annual growth rate (CAGR) of 12.3%, while the Chinese market grew at 11.6% [8]. - However, the company faces structural risks as international brands increasingly reclaim licenses or establish their own perfume businesses, which threatens Ying Tong's growth potential [8]. Business Model Concerns - Ying Tong Holdings primarily operates as a brand agency rather than owning its own brands, with 99% of its revenue coming from external brands [9]. - The company has a high dependency on a few suppliers, with the top five suppliers accounting for a significant portion of its procurement, raising concerns about revenue stability if key partnerships end [9]. - The expiration of a distribution agreement with a major luxury brand in December 2022 resulted in a revenue drop of 425 million yuan, representing 25.5% of total revenue for that fiscal year [9]. Brand Development Challenges - The company's own brand, Santa Monica, has minimal revenue contributions projected at 0.3%, 0.8%, and 0.9% for the fiscal years 2023 to 2025, indicating a lack of market presence [12]. - Ying Tong Holdings has been criticized for insufficient investment in research and development, which limits its ability to compete effectively in the market [12]. Market Sentiment - The timing of the IPO coincided with tight liquidity in the Hong Kong market and pressure on the consumer sector, leading to negative market sentiment towards high-priced listings [13]. - The broader perfume industry is experiencing collective anxiety, as the market appears to have a consumption gap, with younger consumers favoring niche brands but showing low repurchase rates [13]. Industry Trends - The decline in stock prices of other new consumer concept stocks, such as Perfect Diary and Nayuki Tea, reflects a diminishing patience from the capital market for "story-driven" companies lacking solid fundamentals [14]. - Ying Tong Holdings must transition from being perceived merely as a "middleman" to demonstrating its capability in developing proprietary brands and expanding beyond fragrance products to regain investor confidence [14].

Core Viewpoint - The successful listing of Ying Tong Holdings Limited on the Hong Kong Stock Exchange symbolizes the filling of a gap in the local perfume market, while the company faces challenges from international luxury brands reclaiming channel control and emerging niche fragrance brands disrupting the market [2]. Financial Performance - Ying Tong's revenue has steadily increased over the past three fiscal years, reaching over 2 billion RMB in the 2025 fiscal year, with revenues of 1.699 billion RMB, 1.864 billion RMB, and 2.083 billion RMB for the fiscal years 2023, 2024, and 2025 respectively [3][4]. - The net profit for the same period has also shown growth, with figures of 1.73 billion RMB, 2.06 billion RMB, and 2.27 billion RMB [3]. - The perfume category remains the core revenue source, contributing 88.5%, 81.7%, and 80.9% of total revenue over the three years, while skincare and makeup categories have seen a significant increase in contribution from 9.1% to 18.2% [3][4]. Market Position - According to data from Frost & Sullivan, Ying Tong holds an 8.1% market share in the mainland China perfume market, ranking as the fourth-largest group, while being the largest perfume brand management company in the non-brand owner segment with a 9.3% market share [4][5]. Brand Partnerships - Ying Tong has established partnerships with 72 brands, including luxury brands like Hermès and Van Cleef & Arpels, as well as niche brands like CREED and Maison 21G, enhancing its competitive advantage [5]. Channel Strategy - As of March 31, 2025, Ying Tong has developed five major sales channels: department stores, cosmetics chains, e-commerce, duty-free, and cross-border sales, covering over 400 cities in China [6]. - The retail channel is the largest source of income, accounting for 48.6% of total revenue in the 2025 fiscal year [6]. Future Plans - Ying Tong plans to allocate approximately 143 million HKD (about 130 million RMB) or 15% of the net proceeds from the IPO to invest in developing its own brands and acquiring or investing in external brands [7]. - The company aims to expand its self-owned brand "Perfume Box" and develop skincare brands [7]. Historical Context - Founded in 1983, Ying Tong initially focused on optical eyewear distribution before pivoting to the perfume industry in 1987, recognizing the potential in the high-end consumer goods market in China [8]. - The company has evolved from a single agent to a brand management group, significantly expanding its brand portfolio over the years [9]. Innovation and Market Adaptation - Ying Tong has pioneered several industry innovations, including the establishment of perfume counters in department stores and the introduction of e-commerce platforms for fragrance sales [11]. - The company is adapting to market changes by focusing on localized marketing strategies and enhancing consumer engagement through its membership system [15][20]. Conclusion - Ying Tong is positioned at a critical juncture, transitioning from a traditional channel distributor to a value-driven entity that emphasizes consumer experience and brand localization, aiming to redefine its role in the evolving fragrance market [21].

Group 1: Market Overview - Three consumer companies, Chow Tai Fook, Saint Bella, and Ying Tong Holdings, went public on June 26, showcasing the diverse development trends in China's consumer market [2][4] - The Hong Kong IPO market has seen a significant increase in fundraising, with a total of HKD 98.9 billion raised this year, a 7.9 times increase compared to the previous year [5][6] - The retail consumption sector has become the most active segment for IPOs in Hong Kong, with an average oversubscription rate of 2228 times, surpassing previous internet giants [4][5] Group 2: Company Performance - Chow Tai Fook has maintained a strong market position, ranking among the top five jewelry brands in China for eight consecutive years, with a projected revenue growth from HKD 3.102 billion in 2022 to HKD 5.718 billion in 2024, reflecting a compound annual growth rate of 35.8% [2][3] - Saint Bella, positioned as a high-end maternity center, offers premium packages priced between HKD 68,000 and HKD 168,800, attracting significant attention and investment from major firms [2][3] - Ying Tong Holdings, a fragrance distributor, manages over 63 external brands and has more than 7,500 offline sales points across Greater China, but faces challenges with rising customer acquisition costs, which accounted for 22% of online revenue in 2024 [3][4] Group 3: IPO Performance - The first-day performance of the three companies varied significantly, with Chow Tai Fook and Saint Bella rising by 25% and 33.74% respectively, while Ying Tong Holdings experienced a decline of 16.67% [7][8] - The oversubscription rates for the IPOs were notably different, with Chow Tai Fook receiving 711 times oversubscription, Saint Bella at 193 times, and Ying Tong Holdings at only 35.8 times [4][7] Group 4: Market Sentiment and Future Outlook - Despite the positive trends, concerns about high first-day loss rates persist, with a 41.6% first-day loss rate for new listings in June, indicating potential investor caution [5][7] - The Hong Kong IPO market is expected to continue its recovery, with projections of raising up to HKD 160 billion by the end of the year, although it has not yet returned to peak levels seen in previous years [6][9]

Group 1 - The core viewpoint of the article highlights the contrasting performance of three companies that went public on the same day, with Ying Tong Holdings experiencing a significant drop in stock price on its debut, while the other two companies saw substantial gains [1][2]. - Ying Tong Holdings, known as the "first Chinese fragrance stock," faced a 16.67% decline on its first trading day, closing at HKD 2.4 per share, resulting in a total market capitalization of HKD 3.2 billion [1][2]. - The CEO of Ying Tong Holdings attributed the stock market fluctuations to normalcy and emphasized the company's commitment to "long-termism," suggesting that future growth will be reflected in the stock price [2][5]. Group 2 - Ying Tong Holdings has a significant reliance on brand licensing, with self-operated revenue accounting for less than 1%, which poses risks such as the expiration of distribution agreements and customer returns [2][10]. - The company has seen revenue and net profit growth in recent years, with projected revenues of CNY 1.699 billion, CNY 1.864 billion, and CNY 2.083 billion for the fiscal years 2023 to 2025, respectively [3][10]. - The Chinese fragrance market has substantial growth potential, with a low penetration rate and an expected compound annual growth rate of 14.0% in per capita spending from 2023 to 2028, potentially reaching a total market size of CNY 47.7 billion by 2028 [6][10]. Group 3 - Ying Tong Holdings has established partnerships with luxury brands such as Hermès and Van Cleef & Arpels, but its heavy reliance on these brands raises concerns about its long-term sustainability [10][13]. - The company has attempted to shift towards a "distribution + self-operated" model to reduce dependency on external brand licenses, but its own brand, Santa Monica, has not significantly contributed to revenue, accounting for less than 1% of total revenue over the years [10][14]. - The competitive landscape is intensifying with the rise of domestic fragrance brands, prompting Ying Tong Holdings to enhance its self-owned brand promotion and market investment to maintain its market position [14].

Core Viewpoint - The successful listing of Ying Tong Holdings Limited, the first publicly traded perfume company in China, marks a significant milestone in the fragrance industry, despite facing challenges on its debut day with a stock price drop [1][3][25] Company Overview - Ying Tong Holdings was established in 1980 in Hong Kong and has become a leading brand management operator in the fragrance, skincare, makeup, and eyewear sectors over 40 years [3][15] - The company manages a diverse portfolio of 72 external brands, including luxury names like Hermès and Van Cleef & Arpels, along with its own brand, Santa Monica [15][17] Financial Performance - Over the past three years, Ying Tong Holdings has achieved cumulative revenue of 5.6 billion RMB, with a steady growth trajectory from 1.699 billion RMB in FY2023 to an expected 2.083 billion RMB in FY2025, reflecting a CAGR of 10.68% [17][19] - The company reported a net profit of 227 million RMB in FY2025, with a net profit margin of 10.89% [16] Revenue Breakdown - The fragrance segment is the core of Ying Tong Holdings' business, accounting for over 80% of total revenue, with sales of 1.504 billion RMB in FY2023, 1.524 billion RMB in FY2024, and projected 1.688 billion RMB in FY2025 [19][20] - The skincare and makeup segments are growing, with skincare revenue reaching 151.9 million RMB in FY2025, representing a CAGR of approximately 32% [20][21] Market Position and Challenges - The company faces challenges due to its heavy reliance on fragrance sales, which creates an imbalance in business growth and may lead to long-term sustainability issues [18][21] - Ying Tong Holdings is also dependent on international brand licenses, with over 88% of its current brand licenses set to expire within five years, posing a significant risk to its revenue stream [21][23] Industry Outlook - The global perfume market is projected to grow from 709.6 billion RMB in 2023 to 841.1 billion RMB by 2028, with a CAGR of 3.7%, indicating a robust growth potential for the fragrance sector [25] - The Chinese fragrance market is also expanding, with forecasts suggesting it could exceed 53.9 billion RMB by 2028, presenting opportunities for companies like Ying Tong Holdings to capitalize on emerging trends [25]