Core Viewpoint - The stock price of Ying Tong Holdings, known as the "first stock of perfume," plummeted by 23.96% within two days of its listing, raising concerns among investors about the company's future prospects [1][2]. Company Overview - Ying Tong Holdings is the largest perfume group in China (including Hong Kong and Macau) by retail revenue, excluding brand owners, and ranks as the third-largest perfume group in mainland China and Hong Kong [3]. - The company has a diverse portfolio of brands, including perfumes, cosmetics, skincare products, eyewear, and home fragrances [3]. Financial Performance - For the fiscal years 2022 to 2025, Ying Tong Holdings is projected to have revenues of 1.699 billion, 1.864 billion, and 2.083 billion yuan, with net profits of 173 million, 206 million, and 227 million yuan respectively [4]. Brand Portfolio - As of March 31, 2023, 2024, and 2025, Ying Tong Holdings' brand portfolio includes 52, 65, and 73 external brands respectively, with all licensing agreements still valid [5]. Market Dynamics - The global perfume market grew from 590.7 billion yuan in 2018 to 709.6 billion yuan in 2023, with a compound annual growth rate (CAGR) of 12.3%, while the Chinese market grew at 11.6% [8]. - However, the company faces structural risks as international brands increasingly reclaim licenses or establish their own perfume businesses, which threatens Ying Tong's growth potential [8]. Business Model Concerns - Ying Tong Holdings primarily operates as a brand agency rather than owning its own brands, with 99% of its revenue coming from external brands [9]. - The company has a high dependency on a few suppliers, with the top five suppliers accounting for a significant portion of its procurement, raising concerns about revenue stability if key partnerships end [9]. - The expiration of a distribution agreement with a major luxury brand in December 2022 resulted in a revenue drop of 425 million yuan, representing 25.5% of total revenue for that fiscal year [9]. Brand Development Challenges - The company's own brand, Santa Monica, has minimal revenue contributions projected at 0.3%, 0.8%, and 0.9% for the fiscal years 2023 to 2025, indicating a lack of market presence [12]. - Ying Tong Holdings has been criticized for insufficient investment in research and development, which limits its ability to compete effectively in the market [12]. Market Sentiment - The timing of the IPO coincided with tight liquidity in the Hong Kong market and pressure on the consumer sector, leading to negative market sentiment towards high-priced listings [13]. - The broader perfume industry is experiencing collective anxiety, as the market appears to have a consumption gap, with younger consumers favoring niche brands but showing low repurchase rates [13]. Industry Trends - The decline in stock prices of other new consumer concept stocks, such as Perfect Diary and Nayuki Tea, reflects a diminishing patience from the capital market for "story-driven" companies lacking solid fundamentals [14]. - Ying Tong Holdings must transition from being perceived merely as a "middleman" to demonstrating its capability in developing proprietary brands and expanding beyond fragrance products to regain investor confidence [14].