Core Viewpoint - The domestic beauty brand, HBN, is transitioning from a follower to a challenger in the market, capitalizing on the maturity of the Chinese supply chain and the benefits of social media, while facing challenges in maintaining growth as it approaches a saturation point in online channels [1][9]. Group 1: Company Overview - HBN, a core brand of Shenzhen Hujia Technology (Group) Co., Ltd., has become a significant player in the domestic skincare market, achieving over 2 billion yuan in revenue for 2024, with a net profit of 129 million yuan [1]. - The brand has rapidly grown since its establishment in 2019, becoming one of the top ten domestic skincare brands in China within just seven years [5]. - HBN's growth is attributed to its strategic positioning in high-tech, low-penetration, and high-growth segments of the skincare market, focusing on key efficacy areas such as anti-wrinkle and brightening products [5]. Group 2: Market Dynamics - The shift of consumer traffic to online platforms due to macroeconomic changes has provided an opportunity for domestic beauty brands to outperform international giants [7]. - Hujia Technology has heavily invested in online channels, with nearly 100% of its revenue coming from online sales in 2024 and the first three quarters of 2025 [8]. - The success of other domestic brands, such as Perlay and Betaini, highlights a broader trend of domestic beauty brands leveraging online channels to gain market share [10][11]. Group 3: Financial Performance - Hujia Technology's revenue growth for 2024 is projected at only 6.93%, significantly below the industry median growth rate of over 21% [15]. - The company has incurred substantial marketing costs, with sales expenses amounting to 1.238 billion yuan and 871 million yuan for 2024 and the first three quarters of 2025, respectively, representing over 50% of its revenue [14]. Group 4: Challenges and Strategies - As online growth slows, Hujia Technology is exploring offline channels to drive revenue, with offline sales reaching 75 million yuan in the first three quarters of 2025, a 150% increase year-on-year [19]. - The company faces challenges in managing price discrepancies between online and offline channels, which could hinder its ability to expand offline effectively [21][22]. - Successfully integrating online and offline strategies is crucial for HBN to transition from a "viral" brand to a sustainable long-term player in the market [26].

Core Viewpoint - HBN, a popular domestic skincare brand, is set to go public, aiming to become "China's first effective skincare stock" [1]. Company Overview - HBN is recognized as a leading dermatological skincare brand in China and is one of the first domestic brands to propose the "Morning C, Evening A" skincare concept [2]. - According to ZhiShi Consulting, HBN is the youngest among the top ten domestic skincare brands in China by retail sales in 2024 and is the largest domestic brand in the improving skincare market [2]. Founder Background - The founder, Yao Zhenan, is an 80s generation entrepreneur who studied in the UK and has a background in design and animation [4][5]. - Yao Zhenan has been a lecturer and graduate advisor at Shenzhen University from 2009 to 2023 while also founding HBN [5][6]. Business Evolution - HBN was established after Yao Zhenan pivoted from a previous venture in women's care products to focus on effective skincare in 2019 [7][8]. - The brand quickly gained market traction by launching products like retinol serums and α-arbutin essence, leveraging the rise of live-stream e-commerce [9]. Financial Performance - The company's total revenue increased from RMB 1.949 billion in 2023 to RMB 2.083 billion in 2024, marking a 6.9% growth [10]. - Net profit surged by 232.5% from RMB 0.388 billion in 2023 to RMB 1.291 billion in 2024, with net profit margins rising from 1.9% to 6.2% [11]. - Adjusted net profits for 2023, 2024, and the first three quarters of 2025 were RMB 0.923 billion, RMB 1.294 billion, and RMB 1.453 billion, respectively [11]. Product Contribution - The majority of revenue comes from improving skincare products, accounting for 81.8%, 78.3%, and 78.6% of total revenue in the respective years [11]. - Gross profit for 2023, 2024, and the first three quarters of 2025 was RMB 14.93 billion, RMB 15.30 billion, and RMB 11.39 billion, with gross margins of 76.6%, 73.4%, and 75.3% [12]. Strategic Partnerships - Meitu, a significant shareholder, plays a crucial role in HBN's growth by providing advantages in traffic and brand operation [13][15]. - Meitu's investment in HBN aligns with its strategic transformation and has contributed to its profitability, with a reported fair value gain from investments between RMB 4.85 billion and RMB 5.65 billion in 2022 [16]. Shareholding Structure - Prior to the IPO, Yao Zhenan holds 35.08% of the shares, his wife holds 13.6%, and Meitu is the largest institutional shareholder with 23.81% [18].