Core Viewpoint - The company Fulejia is facing significant financial challenges, with declining revenue and net profit, which may result in it falling out of the 20 billion RMB revenue tier for domestic beauty brands if it does not achieve over 700 million RMB in Q4 2025 [1][12]. Financial Performance - In Q3 2025, Fulejia reported revenue of 434 million RMB, a year-on-year decline of 17.58%, and net profit dropped to 95 million RMB, down 44.96% compared to the previous year [2][5]. - For the first three quarters of 2025, total revenue was 1.297 billion RMB, reflecting an 11.54% decrease year-on-year, while net profit fell to 325 million RMB, a decline of 36.73% [2][7]. - The company's cash flow from operating activities decreased by 48.52% to 243 million RMB, primarily due to reduced cash receipts from sales and increased marketing expenses [3][11]. Market Position and Competition - Since its listing in August 2023, Fulejia has struggled with slowing growth, with both revenue and net profit declining, marking the largest drop in net profit in three years [5][12]. - Fulejia's market capitalization has significantly decreased from approximately 300 billion RMB at the time of listing to around 128.93 billion RMB [3][5]. - The company ranks 9th in market capitalization among domestic beauty brands but has fallen to 12th in revenue ranking, indicating a decline in competitive positioning [15]. Strategic Challenges - Fulejia's product matrix is overly reliant on its core brand, which limits its growth potential in a highly competitive market [12][15]. - The company has seen a significant increase in marketing expenses, which accounted for nearly 50% of revenue in the first three quarters of 2025, yet this has not translated into revenue growth [15]. - The substantial increase in prepayments by 233.77% indicates a shift in financial strategy, focusing on promotional expenses and raw material costs [15].
头部国货品牌暴跌