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 domestic skincare brand, has gained significant popularity among young consumers with its "early C, late A" concept and is preparing for an IPO to become the first publicly listed company in the domestic efficacy skincare sector, although it faces challenges related to high marketing costs and low R&D investment [1][2][4]. Company Performance - Shenzhen Hujia Technology (Group) Co., Ltd., the parent company of HBN, reported revenues of 1.948 billion yuan, 2.083 billion yuan, and 1.514 billion yuan for the years 2023, 2024, and the first nine months of 2025, respectively, with a year-on-year growth of 6.9% in 2024 and an increase of 10.2% in the first nine months of 2025 [2]. - The net profit showed explosive growth, with figures of 38.835 million yuan, 129 million yuan, and 145 million yuan for the same periods, reflecting a year-on-year increase of 232.5% in 2024 and a 190.3% increase in the first nine months of 2025 compared to the entire year of 2024 [2]. Market Position - The Chinese dermatological skincare market is experiencing a compound annual growth rate (CAGR) of 16.7% from 2019 to 2024, significantly outpacing the overall skincare market growth of approximately 8.6% [4]. - HBN ranks first among domestic brands in both improvement skincare products and dermatological skincare segments, with its core product "glow water" consistently leading the domestic essence water category [4]. Customer Engagement - As of September 2025, HBN has accumulated over 4.6 million repeat customers, with average repurchase rates of 35.4% on Tmall and 44% on Douyin, indicating strong customer loyalty [4]. Marketing and Sales Expenses - Hujia Technology's sales and distribution expenses have been rising, with figures of 1.267 billion yuan, 1.238 billion yuan, and 871 million yuan for 2023, 2024, and the first three quarters of 2025, respectively, accounting for 65.1%, 59.4%, and 57.6% of total revenue [4][6]. - Promotion expenses, which include advertising on e-commerce platforms and KOL/KOC fees, are the largest expenditure, amounting to approximately 1.048 billion yuan, 721 million yuan, and 720 million yuan during the same periods, representing 57.2%, 50.4%, and 47.6% of total revenue [6]. R&D and Product Complaints - Despite its strong market performance, Hujia Technology's R&D investment is relatively low, with R&D expenses of 65.979 million yuan, 57.834 million yuan, and 39.981 million yuan, leading to a decline in R&D expense ratio from 3.4% to 2.64%, which is below the industry average [10]. - The company has faced consumer complaints, with 948 reported cases on Black Cat Complaints, primarily concerning false advertising and allergic reactions, raising concerns about its "allergy-free guarantee" service [11][15]. Founder's Background and Shareholder Structure - The founder, Yao Zhenan, transitioned from academia to entrepreneurship, initially launching a sanitary napkin brand before entering the skincare market with HBN in 2019, focusing on anti-aging products [16][18]. - Meitu, the largest external shareholder, holds a 23.81% stake in Hujia Technology, and the company has announced a cash dividend plan of 100 million yuan ahead of its IPO [19][21].