Core Viewpoint - The beauty e-commerce industry is facing challenges as traditional platforms reach their growth limits, while new platforms like short videos and live streaming are becoming significant traffic sources. The performance of beauty third-party operators (TPs) varies widely, with only a few companies managing to thrive amidst the downturn [1][12]. Market Capitalization - Ruoyuchen leads the market with a market capitalization of 13.178 billion RMB, significantly surpassing the second-ranked Yiwang Yichuang by nearly 6 billion RMB [1]. - Yiwang Yichuang and Qingmu Technology are in the second tier with market capitalizations exceeding 5 billion RMB [1]. - Liren Lizhuang and Kaichun Co. have market capitalizations between 2 billion and 5 billion RMB, placing them in the third tier [1]. - Baozun E-commerce and Youquhui are in the fourth tier with market capitalizations below 2 billion RMB [1]. Financial Performance - Only Ruoyuchen among the seven beauty TPs achieved double-digit growth in both revenue and net profit, with revenue increasing by 67.55% to 1.319 billion RMB and net profit rising by 85.60% to 72.3 million RMB [8][12]. - Other companies, including Liren Lizhuang and Baozun E-commerce, reported significant declines in net profit, with Liren Lizhuang experiencing a four-digit percentage drop [8][12]. - Youquhui reported a 14.2% increase in beauty product sales, reaching 5.8 million RMB, but still faced overall revenue and profit declines [9]. Channel Strategy - Beauty TPs are increasingly focusing on emerging platforms like Douyin, Xiaohongshu, and Kuaishou, as traditional platforms like Taobao and Tmall show diminishing growth contributions [18][23]. - Ruoyuchen's sales from Douyin reached 490 million RMB, making it the largest sales channel, surpassing Tmall and Tmall International combined [27][28]. - Qingmu Technology reported a 144.58% increase in revenue from Douyin, indicating a successful channel transition [27]. Brand Development - Ruoyuchen and Liren Lizhuang are the only two TPs actively expanding their own brand portfolios, with Ruoyuchen's self-owned brand revenue growing by 242.42% to 603 million RMB [36][38]. - Liren Lizhuang's self-owned brand sales increased by over 80%, focusing on two main brands for future growth [38]. - Other TPs are exploring brand incubation and management to drive growth, with Qingmu Technology's brand management revenue increasing by 86.46% [40].

Core Viewpoint - The divorce case of Huang Tao, the controlling shareholder of Liren Lizhuang, has drawn market attention, particularly due to the transfer of shares amidst declining performance in the beauty industry [2][10]. Company Performance - Liren Lizhuang's revenue for Q1 this year was 361 million yuan, a year-on-year decline of 23.58% [2]. - The company expects a net loss attributable to shareholders of 30 million to 42.5 million yuan for the first half of 2025 [2]. - Since its IPO in September 2020, Liren Lizhuang's revenue has consistently decreased, from a peak of 4.155 billion yuan in 2021 to an estimated 1.728 billion yuan in 2024, representing a decline of over 50% [2][5]. - The company's market capitalization is approximately 4.1 billion yuan [2]. Business Model and Strategy - Liren Lizhuang, known as the "first stock of beauty e-commerce operation," shifted from a commission-based model to a high-risk, high-reward model by signing sales agreements with brands and managing operations directly [3]. - The company has faced challenges due to increased competition in the beauty market and a shift in consumer behavior, particularly with the rise of platforms like Douyin and Xiaohongshu [5]. - In 2024, Liren Lizhuang's revenue fell by 37.44% to 1.728 billion yuan, primarily due to the termination of partnerships with several brands and a shift in operational models [5]. Shareholder Changes - Following the divorce proceedings, Huang Tao's shareholding decreased from 32.46% to 28.28%, while his ex-wife, Weng Shuhua, acquired 4.18% of the shares, valued at approximately 170 million yuan [2][10]. - The divorce case has had a notable impact on the company's stock performance, with previous instances showing a negative market reaction to similar events [10]. Transition to New Business Models - To address declining performance, Liren Lizhuang has begun incubating its own brands, such as Yuru and Meiyitang, focusing on niche markets within the beauty sector [7]. - Despite these efforts, the company continues to face financial challenges, leading to a transition from a buyout model to a lighter operational model to reduce inventory and financial risks [9].

Core Viewpoint - The divorce case involving the controlling shareholder of Liren Lizhuang has drawn market attention, highlighting the impact of personal disputes on company performance and stock value [1][9]. Company Overview - Liren Lizhuang, known as the "first stock of beauty makeup operation," has faced significant challenges in recent years, with a sharp decline in revenue and profitability due to market competition and changing consumer behavior [3][5]. - The company reported a revenue of 1.728 billion yuan in 2024, a decrease of 37.44% compared to 2023, marking a new low [4][5]. Financial Performance - The net profit attributable to shareholders for 2024 was a loss of approximately 244 million yuan, a significant decline from a profit of 29.53 million yuan in 2023 [4]. - The decline in revenue is attributed to the termination of partnerships with several brands, including L'Oreal and Avene, leading to a 38.39% drop in the e-commerce retail business [5][8]. Strategic Shifts - In response to declining performance, Liren Lizhuang has begun to incubate its own brands, such as Yuyongchu and Meiyitang, aiming to capture niche markets within the beauty sector [6][8]. - The company is transitioning from a buyout model to a lighter operational model to reduce financial risks and improve cash flow [8]. Market Impact - The divorce of the company's founder has had a notable negative impact on stock performance, with previous instances showing that such personal disputes can lead to significant market reactions [9]. - The largest divorce settlement in A-shares history remains that of Kangtai Biological, which involved a split of shares worth 23.55 billion yuan at the time [1][9].

Core Viewpoint - Guangzhou Ruoyuchen Technology Co., Ltd. is planning to issue H-shares and apply for listing on the Hong Kong Stock Exchange, following other beauty TP companies, indicating a trend of dual listing in the beauty industry [1][2][3] Company Overview - Ruoyuchen, established in 2011 and listed on the Shenzhen Stock Exchange in 2020, is a beauty TP enterprise that provides comprehensive e-commerce services for brand owners, including online store operations and marketing [3][4] - The company has expanded its business from maternal and infant products to beauty, health products, and household cleaning, establishing itself as a global consumer brand digital management company [3][4] Financial Performance - For the first half of 2025, Ruoyuchen's net profit is projected to be between 63 million and 78 million yuan, a year-on-year increase of 61.81% to 100.33% compared to 38.93 million yuan in the same period last year [3][4] - In 2024, Ruoyuchen achieved revenue of 1.766 billion yuan, a year-on-year growth of 29.26%, and a net profit of 106 million yuan, up 94.58% from the previous year [4][6] Industry Context - The beauty TP industry is currently undergoing a deep adjustment period, with many companies struggling to survive. The total revenue of six listed beauty TP companies dropped from 9.99 billion yuan in 2022 to 7.653 billion yuan in 2024, a cumulative decline of 23.3% [4][5] - Despite the industry's downturn, Ruoyuchen has emerged as a rare success story, demonstrating strong growth resilience [5][7] Business Transformation - Ruoyuchen is transitioning from a "TP operator" to a "comprehensive brand service provider," focusing on self-owned brands and brand management to achieve structural growth [8][12] - The company's brand management business has rapidly grown, with revenue increasing from 160 million yuan in 2023 to 501 million yuan in 2024, marking a growth of 212.24% [10][11] Strategic Positioning - Ruoyuchen has diversified its business model by developing a balanced portfolio across various categories, reducing reliance on a single category. In 2024, the beauty category accounted for 34%, while household cleaning, maternal and infant products, and health products made up 28%, 21%, and 13%, respectively [12]

Core Viewpoint - The company, Shanghai Kaijie E-commerce Co., Ltd. (hereinafter referred to as "Kaijie E-commerce"), has submitted its IPO application to the Hong Kong Stock Exchange, marking its fourth attempt to enter the capital market after previous unsuccessful attempts in 2016, 2021, and 2023. The company aims to raise funds for strategic business expansion, technology procurement, marketing, and enhancing digital capabilities [1][2]. Industry Overview - The beauty e-commerce agency industry has experienced significant structural changes since 2021, with a slowdown in growth and market differentiation. The compound annual growth rate (CAGR) was approximately 25% before 2021, with the market size projected to grow from 30 billion yuan in 2020 to 80 billion yuan by 2025. However, recent years have seen a decline in growth rates due to rising traffic costs and the trend of international brands establishing their own teams [2][5]. - Among six selected listed companies in the industry, four reported revenue declines, with notable drops in companies like Liren Lizhuang, which saw a 37.44% decrease in revenue and a net profit loss of 182.64% [2][3]. Company Performance - Kaijie E-commerce's revenue and net profit have declined for three consecutive years from 2022 to 2024, with revenues of 1.829 billion yuan, 1.723 billion yuan, and 1.699 billion yuan, reflecting decreases of 5.8% and 1.4% in 2023 and 2024, respectively. Net profits also fell to 86 million yuan, 68 million yuan, and 60 million yuan, with declines of 21.8% and 10.6% in the same years [5][9]. - The company's gross profit margin has decreased from 24% in 2022 to 21.8% in 2024, with both to-C and to-B business segments experiencing declines in their respective margins [7][9]. Dependency on Major Brands - Kaijie E-commerce has shown a growing dependency on its top five brands, with their contribution to Gross Merchandise Volume (GMV) increasing from 64.4% in 2022 to 80.4% in 2024. However, the revenue contribution from these brands has not kept pace, indicating a potential weakening of the company's bargaining power with these clients [11][12][14]. - The company has served over 200 brands, but the revenue from the top five brands has decreased from 62.2% in 2022 to 52.8% in 2024, highlighting a concerning trend in revenue generation despite increasing GMV [12][14].

Core Viewpoint - The company reported a significant decline in revenue while achieving substantial growth in net profit, indicating a challenging balance between market expansion and cost control [1][2]. Revenue and Profit Discrepancy - The company's revenue decreased to 422 million yuan, a year-on-year decline of 33.91%, primarily due to the weakness in its core business and a significant reduction in brand online sales services [1][2]. - Despite the revenue drop, net profit reached 13 million yuan, reflecting a year-on-year increase of 90.5%, driven by cost control and operational efficiency improvements [1][2]. - The reduction in sales expenses and marketing investments raises concerns about future business growth potential [2]. Research and Development Challenges - The company has shown a worrying trend in R&D investment, with a continuous decrease in R&D expenses and a decline in the number of R&D personnel, indicating insufficient investment in technological innovation [3]. - The focus on operational efficiency over R&D may hinder the company's ability to compete effectively in the beauty e-commerce sector, where technology-driven service capabilities are crucial [3]. - An increase in the number of shareholders and a decrease in share concentration suggest a lack of confidence in the company's future development [3]. Conclusion: Need for Strategic Rebuilding - To achieve sustainable growth, the company must optimize its market strategy by reassessing customer structure and market layout, enhancing competitiveness in the domestic market, and exploring opportunities in emerging markets [4]. - Increasing R&D investment is essential to make technological innovation a core driver of long-term development, thereby enhancing digital service capabilities and market competitiveness [4].

Core Insights - The Chinese beauty e-commerce agency industry is facing a transition from rapid growth to a focus on high-quality development, with challenges such as the rise of international brand self-operated teams and increasing customer acquisition costs [1][2] Industry Growth and Challenges - The industry previously experienced a compound annual growth rate of 20%, but growth is expected to slow to 15%-16% by 2025, with significant differentiation among companies [2] - Major players are achieving growth through brand incubation and technological empowerment, while smaller agencies struggle with economic scalability and high investment risks [2] - The shift towards self-operation by international brands has led to revenue declines of over 30% for some agencies, highlighting a lack of core competitive advantages [2] Cost Pressures and Profitability - Rising customer acquisition costs, which now exceed 50% of expenses, and a 40% year-on-year increase in costs on platforms like Douyin are squeezing profit margins [3] - Insufficient investment in technology, averaging less than 3% of revenue for agencies compared to 8% for international brands, is hindering productivity growth [3] Systemic Challenges in Business Models - Agencies are often relegated to the role of executors, overly reliant on sales commissions and unable to share in brand value growth [4] - The emergence of new MCN (Multi-Channel Network) organizations is blurring industry boundaries, posing a direct threat to traditional agencies [4] - High dependency on a few major clients creates vulnerabilities, as seen in cases where the loss of a single client led to significant losses [4] Pathways for Transformation - Agencies must transition from labor-intensive models to technology-driven operations, focusing on user behavior prediction, intelligent supply chain management, and cross-platform content generation [5] - Establishing deep vertical ecosystems and creating unique value propositions in niche markets will be crucial for survival [5] Global Expansion Opportunities - The explosive growth of the Southeast Asian beauty e-commerce market, projected to reach a 45% growth rate by 2025, presents new opportunities for Chinese agencies to offer digital retail solutions [6] - A shift from service fees to value-sharing models is emerging, as demonstrated by successful acquisitions and the potential for creating beauty industry cloud platforms [6] Conclusion - The Chinese beauty agency industry is at a pivotal moment, where companies that embrace technological innovation and redefine their business models will emerge as leaders, while those clinging to traditional methods may become obsolete [7]

Core Viewpoint - In 2024, Liren Lizhuang reported disappointing financial results, with revenue plummeting by 37.44% year-on-year to 1.728 billion yuan, and a net loss of 24.4 million yuan, marking a 182.64% decline compared to the previous year. This represents the fourth consecutive year of revenue decline since its IPO in 2020, with a cumulative reduction of 62.43% [1][2]. Group 1: Financial Performance - Revenue has decreased for four consecutive years, with a significant drop of 37.44% to 1.728 billion yuan in 2024 [1]. - The net profit turned into a loss of 24.4 million yuan, reflecting a year-on-year decline of 182.64% [1]. - Despite a slight increase in gross margin to 35.89%, the net margin fell to -1.52%, indicating ineffective cost control [2]. Group 2: Business Model Challenges - The company's reliance on e-commerce agency operations faced dual challenges: the retreat of Korean beauty brands and the shift of some Western brands to self-operated models [2]. - The company’s dependency on a few major suppliers has led to a high risk of revenue loss due to brand withdrawals, with significant reliance on top five suppliers [3]. - Self-owned brands have not gained substantial market traction, with claims of growth overshadowed by a lack of technological barriers and competition from established brands [3]. Group 3: Strategic Issues - The company is experiencing a crisis due to its "brand parasite" business model, which has been exposed by industry changes [3]. - There is a strategic inconsistency, as the company is reducing inventory to maintain cash flow while simultaneously investing in low-yield financial products, raising concerns about its focus [3]. - Management instability, including the departure of key board members, has led to doubts about strategic continuity [4]. Group 4: Future Outlook - The company’s proposed strategies of reducing inventory, expanding self-owned brands, and betting on new platforms like Douyin may provide short-term relief but lack long-term competitive strength [5]. - The beauty industry is shifting towards a dual focus on "hardcore R&D and brand power," while the company's R&D investment is minimal compared to industry leaders [5]. - Without significant breakthroughs in self-owned brands or strategic acquisitions within the next 12 months, the company risks falling out of the mainstream beauty market [5].