Core Viewpoint - CHANDO has submitted its IPO application to the Hong Kong Stock Exchange, facing multiple challenges including high revenue dependence on its main brand and fluctuating net profits [1][5][6]. Company Overview - CHANDO is the third-largest domestic cosmetics group in China based on retail revenue projections for 2024, with a valuation exceeding 7.1 billion RMB after a recent investment from L'Oréal [5][6]. - The company has five major brands, with CHANDO accounting for over 94% of its revenue, peaking at 95.9% in 2023 [11][12]. Financial Performance - In the first half of 2025, CHANDO reported revenue of 2.448 billion RMB, with a total revenue growth from 42.92 billion RMB in 2022 to 46.01 billion RMB in 2024, reflecting a compound annual growth rate of only 3.5% [8][9]. - The net profit fluctuated significantly, reaching 3.02 billion RMB in 2023 but dropping by 37.1% to 1.9 billion RMB in 2024, before recovering to 1.91 billion RMB in the first half of 2025 [8][9]. Market Position - CHANDO ranks sixth among domestic beauty companies, with competitors like Pechoin and Shanghai Jahwa achieving significantly higher revenues [6][7]. - The company's gross margin has improved from 66.5% in 2022 to 70.1% in the first half of 2025, but it still lags behind industry leaders [9]. Marketing and Sales Strategy - CHANDO's sales and marketing expenses reached 27.17 billion RMB in 2024, accounting for 59% of its revenue, which is 14.3 times its net profit for the year [15]. - The company has a high reliance on online sales, with online revenue constituting 68.8% of total revenue in the first half of 2025, primarily from direct online sales [16]. Challenges - The heavy reliance on the CHANDO brand and skincare products limits the company's ability to adapt to market risks and explore new growth opportunities [13]. - The increasing competition in the e-commerce space and rising customer acquisition costs may further pressure the company's profit margins [16].