Core Insights - Shenzhen Hujia Technology (Group) Co., Ltd., the parent company of skincare brand HBN, has submitted its IPO application to the Hong Kong Stock Exchange, raising concerns about the significant disparity between net profit growth and revenue growth, as well as the company's reliance on a single brand [1][2] Financial Performance - In 2023, Hujia Technology turned a profit, with net profit expected to surge from approximately 39 million yuan in 2023 to 129 million yuan in 2024, representing a growth rate exceeding 200% [2] - The company has achieved a reduction in sales and distribution expenses as a percentage of revenue, from 65.1% in 2023 to 57.6% in the first three quarters of 2025, indicating improved operational efficiency [2] Brand Strategy - HBN has introduced a new brand, "Luokexin," but the company emphasizes that this brand is still in the early stages of registration and does not yet signify a move into substantive business operations [3] - The company remains focused on the development of its main brand, HBN, and will disclose any significant progress regarding sub-brands or new business initiatives through official channels [3] Manufacturing and R&D - HBN's products are primarily manufactured by third-party manufacturers, raising questions about the company's long-term ability to establish a competitive edge through deep R&D capabilities [3][4] - The company has established a comprehensive product lifecycle verification system and a 5,000-square-meter integrated R&D center to support its product efficacy claims [4] Sales Channels - Hujia Technology relies heavily on online sales, with over 90% of revenue coming from online channels from 2023 to the first three quarters of 2025 [6] - The company plans to use IPO proceeds to expand its offline channels, having already entered over 5,000 high-end beauty stores and aiming to develop core shopping area counters and direct stores [6]

Core Viewpoint - HBN, a domestic skincare brand, has submitted its IPO application to the Hong Kong Stock Exchange, marking a significant step in its growth journey amid a slowing beauty market and increasing competition [1] Financial Performance - HBN has achieved a revenue milestone of over 2 billion yuan, with revenue growth from 1.948 billion yuan in 2023 to 2.083 billion yuan in 2024, and 1.514 billion yuan in the first three quarters of 2025, reflecting a year-on-year growth of 10.2% [4] - The net profit margin has significantly improved, rising from 38.8 million yuan (1.9%) in 2023 to 129 million yuan (6.2%) in 2024, and further to 145 million yuan (9.6%) in the first three quarters of 2025, indicating a transition to a profit-driven model [4] User Loyalty and R&D Investment - HBN's high repurchase rates are crucial for its business model, with average repurchase rates of approximately 35.4% on Tmall and 44.0% on Douyin as of September 2025, totaling over 4.6 million repeat customers [5] - The company maintains a high R&D investment ratio of around 3%, which is above the industry average, supporting its innovation capabilities [5][6] - HBN has established a cross-disciplinary R&D team of 103 members and collaborates with over 30 research institutions, leading to significant outputs such as 50 published SCI papers, ranking first among domestic skincare brands [6] Growth Potential - HBN's growth strategy reveals opportunities in online channels, offline expansion, and product category extension, with a solid foundation in online sales but room for deeper engagement and efficiency improvements [8] - The company has successfully entered over 5,000 high-end beauty stores and is exploring further channel network development and regional operations [8] - HBN's ability to leverage its R&D for systematic product innovation allows for continuous introduction and iteration of new products, enhancing its market predictability and sustainability [9] Valuation Outlook - HBN's business model, characterized by a combination of scientific barriers, high customer prices, and strong repurchase rates, is likely to attract investors seeking sustainable growth [11] - The recent trend of profitability improvement alleviates concerns regarding revenue growth without profit, while the skincare sector's growth rate exceeds that of the overall beauty market, providing potential industry benefits [11] - Challenges remain in managing offline channel complexities, brand recognition during category extensions, and the impact of sustained R&D investments on profits [11]

Group 1 - HBN's parent company, Shenzhen Hujia Technology (Group) Co., Ltd., submitted a listing application to the Hong Kong Stock Exchange on January 26, with Meitu as a significant shareholder holding 23.81% [2] - HBN, founded in 2019, focuses on skincare products with a pricing range of 129 to 689 yuan, promoting the "morning C, evening A" skincare concept [2] - Meitu's investment in HBN began in 2020, as part of a strategic transformation plan to enter the social sector amid increasing competition [2][3] Group 2 - Meitu reported a turnaround in profitability in 2022, largely attributed to the fair value gains from its investment in HBN, estimated between 485 million to 565 million yuan [3] - HBN's shareholding structure changed, with Meitu's stake decreasing from 28.2% to 23.81% due to share transfers and capital increases, while the largest shareholders are now Yao Zhenan (35.08%) and Wang Yang (13.6%) [3] - HBN's revenue for 2023, 2024, and the first three quarters of 2025 is projected at 1.948 billion, 2.083 billion, and 1.514 billion yuan, respectively, with net profits of 39 million, 129 million, and 145 million yuan, maintaining a gross margin of 73% to 77% [3] Group 3 - On the same day HBN submitted its listing application, Meitu acknowledged the move and expressed intent to continue holding its stake in HBN, citing potential synergies between their beauty businesses [4]