Core Viewpoint - The article discusses the recent surge in stock prices of new consumption companies in Hong Kong, particularly highlighting the IPO of Lin Qingxuan and the challenges it may face in achieving stable profitability and brand reliance [1][2]. Financial Performance - Lin Qingxuan's revenue has shown growth from 6.91 billion RMB in 2022 to 12.10 billion RMB in 2024, with year-on-year growth rates of 16.5% in 2023 and 50.3% in 2024 [3]. - The company reported a net loss of 5.93 million RMB in 2022, but turned a profit of 84.52 million RMB in 2023 and 187 million RMB in 2024 [3]. Profitability Metrics - The gross profit margin for Lin Qingxuan was high, with figures of 78%, 81.2%, and 82.5% from 2022 to 2024, while the net profit margin improved from -0.9% in 2022 to 15.4% in 2024 [5]. - The company heavily promotes its "high-end" branding, which is a central theme in its IPO prospectus, mentioned 157 times [5]. Marketing and R&D Expenditure - Lin Qingxuan's marketing expenses are significant, with sales and distribution costs amounting to 5.09 billion RMB, 4.86 billion RMB, and 6.88 billion RMB from 2022 to 2024, representing 73.7%, 60.2%, and 56.9% of total revenue respectively [12][13]. - In contrast, R&D spending was low, totaling less than 100 million RMB over three years, with only 80 patents held, of which 42 are related to core ingredients or technologies [13]. Brand and Product Dependency - The company relies heavily on its single brand "Lin Qingxuan," which accounted for 99% of total revenue from 2022 to 2024, raising concerns about its vulnerability to market changes [11]. - The core product, camellia oil, has increased its revenue contribution from 31.5% in 2022 to 37% in 2024, indicating a growing dependency on this single product line [12].

Core Viewpoint - Lin Qingxuan is preparing for an IPO in the Hong Kong market, aiming to become the first "high-end domestic skincare stock" in the market, despite concerns about its marketing-heavy approach and low R&D investment [1][3]. Financial Performance - Lin Qingxuan's revenue for 2022, 2023, and 2024 is projected to be 6.91 billion, 8.05 billion, and 12.10 billion RMB, with year-on-year growth rates of 16.5% and 50.3% for 2023 and 2024 respectively [3][4]. - The company reported a net loss of 5.93 million RMB in 2022, but turned a profit in 2023 with a net profit of 84.52 million RMB, and is expected to achieve a net profit of 187 million RMB in 2024 [3][4]. Product Strategy - Lin Qingxuan has transformed from a mass-market brand to a high-end skincare brand, focusing on camellia oil products, which have become its core revenue driver, contributing nearly 40% of total revenue [6][7]. - The company offers six main product categories, with camellia oil being the highest revenue-generating product, achieving sales of 2.18 billion, 2.84 billion, and 4.48 billion RMB from 2022 to 2024 [7]. Sales Channels - The company has shifted its sales focus online, with online revenue growing from 3.12 billion RMB in 2022 to 7.14 billion RMB in 2024, accounting for 59.1% of total revenue [8][9]. - Lin Qingxuan operates 506 stores nationwide, ranking first among high-end skincare brands, but the revenue from offline channels has been declining, with direct store revenue dropping from 51.3% to 32.9% [9][10]. Marketing and R&D Investment - Lin Qingxuan has significantly increased its marketing expenditures, spending 5.09 billion, 4.86 billion, and 6.89 billion RMB from 2022 to 2024, which represents 73.66%, 60.37%, and 56.86% of revenue respectively [15][16]. - In contrast, the company's R&D investment has been minimal, with expenditures of only 0.21 billion, 0.20 billion, and 0.30 billion RMB from 2022 to 2024, accounting for just 3.05%, 2.45%, and 2.51% of revenue [16][18]. Market Position and Challenges - Lin Qingxuan's gross margin is notably high at 78%, 81.2%, and 82.5% from 2022 to 2024, indicating strong pricing power compared to competitors [13][14]. - The skincare market is projected to grow, with the high-end segment expected to reach 1.144 trillion RMB by 2024, growing at a compound annual growth rate of 13.8% [14][15]. - The company faces challenges related to its heavy reliance on marketing and low R&D investment, which could impact its long-term sustainability and brand trust [19][20].

Core Viewpoint - Lin Qingxuan, a domestic skincare brand, has officially initiated its IPO process by submitting a prospectus to the Hong Kong Stock Exchange, aiming for a valuation of approximately 38.26 billion RMB with a projected revenue of 1.209 billion RMB and a net profit of 187 million RMB for 2024 [2][15]. Financial Performance - In 2024, Lin Qingxuan's revenue is expected to reach 1.209 billion RMB, with a net profit of 187 million RMB, marking a significant increase from a loss of 5.93 million RMB in 2022 [2][15]. - The company's revenue structure remains heavily reliant on direct sales, with 398 million RMB from direct stores, accounting for over 90% of total revenue, while income from franchise and joint venture stores is only 45.76 million RMB [3][5]. Market Positioning - Lin Qingxuan positions itself as a high-end brand, comparable to foreign brands, but faces challenges in establishing a strong market presence and brand recognition in high-end retail environments [8][14]. - The brand's gross margin stands at 86% for direct stores, significantly higher than the 71.5% for cooperative stores, indicating a disparity in profitability between the two sales channels [5][13]. Growth Strategy - The company has opened its franchise system in 2023 to accelerate offline expansion, but the results have not yet yielded significant revenue growth, with franchise and joint venture stores showing lower efficiency compared to direct stores [3][7]. - Lin Qingxuan's future growth strategy will focus on optimizing its joint venture model and enhancing product development and financial structure to support long-term valuation [2][15]. Competitive Landscape - Compared to competitors like Maogeping, Lin Qingxuan's market share and positioning in the high-end skincare segment are still developing, with both brands claiming to be the only domestic brands competing with foreign counterparts [8][11]. - The brand's R&D investment is relatively low at 2.56% of revenue, which is below industry leaders, indicating a need for increased investment in innovation to strengthen its high-end positioning [14]. Leadership and Market Sentiment - The founder, Sun Laichun, has significantly influenced the brand's growth through active participation in live-streaming sales, which has raised concerns about the sustainability of this growth model [15][16]. - Recent market trends show a recovery in the Hong Kong consumer sector, providing a favorable environment for Lin Qingxuan's IPO, as other beauty brands have seen their stock prices double [17].

Core Viewpoint - Lin Qingxuan, a domestic beauty brand, has officially submitted its IPO application to the Hong Kong Stock Exchange, aiming to become the first high-end domestic skincare brand listed in Hong Kong [1][4]. Group 1: Company Overview - Lin Qingxuan is positioned as a high-end domestic skincare brand, focusing on camellia oil-based products and aiming to integrate modern technology with natural ingredients [3][6]. - The brand was established in 2003 and has undergone a significant transformation towards high-end positioning since 2016, eliminating lower-priced product lines [12][40]. Group 2: Market Position and Growth - The skincare market in China is projected to reach RMB 4,619 billion by 2024, with the high-end segment expected to grow from RMB 749 billion in 2019 to RMB 1,144 billion [14]. - Lin Qingxuan ranks first among domestic high-end skincare brands and 13th among the top 15 high-end skincare brands in China, with a retail revenue of RMB 1.59 billion and a market share of 1.4% in 2024 [14][19]. Group 3: Product and Sales Performance - Lin Qingxuan's flagship product, the camellia oil essence, has sold over 30 million bottles since its launch in 2014, maintaining the top position in the facial essence category for 11 consecutive years [24]. - The company reported revenues of RMB 6.91 billion, RMB 8.05 billion, and RMB 12.10 billion for the years 2022, 2023, and 2024 respectively, with a gross margin increasing to 82.5% by 2024 [35][43]. Group 4: Distribution and Channel Strategy - Lin Qingxuan operates 506 stores, with over 95% located in shopping malls, and has a significant online presence, with online sales growing from RMB 312 million in 2022 to RMB 714 million in 2024 [26][29]. - The company has a strong digital marketing strategy, with over 7 million followers on Tmall and over 1 million on Douyin, achieving top sales rankings during major shopping events [29][31]. Group 5: Research and Development - Lin Qingxuan has invested in R&D, with 64 employees dedicated to this area, focusing on innovative ingredients and technologies, including proprietary compounds derived from camellia [47][48]. - The company has filed for 500 formulations and 80 patents, emphasizing its commitment to quality and innovation in product development [48].