Core Viewpoint - The well-known Chinese beauty brand, Chando, is preparing for its IPO on the Hong Kong Stock Exchange after 24 years of establishment, but its financial performance reveals significant challenges and reliance on a single brand for revenue growth [1]. Financial Performance - Chando's revenue growth from 2022 to 2024 is only 3.5%, with revenues of 4.292 billion, 4.442 billion, and 4.601 billion respectively, underperforming the industry average growth rate of 6.6% [3]. - The core brand, Chando, accounted for 94.6%, 95.9%, and 95.4% of total revenue over the same period, indicating a heavy reliance on a single brand [3]. Marketing and R&D Expenditure - Chando has spent approximately 7.5 billion on marketing from 2022 to 2024, while only investing 348 million in R&D, resulting in a marketing-to-R&D expenditure ratio of about 21:1 [5]. - In 2024, marketing expenses are projected to reach 2.717 billion, constituting 59% of total revenue, which is significantly higher than competitors like Proya and Beauté Pacifique [5]. Governance and Strategic Concerns - The company is predominantly controlled by the founding family, who hold 87.82% of the voting rights, raising concerns about decision-making and potential conservatism in strategy [8]. - Chando is pursuing a strategy of offline expansion, planning to increase retail points to 62,700 by mid-2025, despite the higher profitability of online sales [9]. Cash Flow and Financial Health - The company has experienced significant cash flow volatility, with a net outflow of 295 million in 2022 and only 65.2 million remaining in 2024, raising questions about the sustainability of its offline expansion strategy [9].