JungleJackpotJubilee| IPO opens a new chapter, discovering Mao Geping's scarcity and high value
editor 2024-04-30 16:37:08 Finance 24
The Hong Kong stock IPO market shows signs of picking up. According to LiveReport big dataJungleJackpotJubileeIn the first quarter of 2024, Hong Kong stocks listed 12 new shares, and the first-day failure rate dropped to 25%, an average increase of 31%.JungleJackpotJubileeMany new stocks continue to rise after listing, doubling the rate of increase and reproducing the money-making effect. At the same time, more blockbuster IPO projects are also being launched one after another, including some industry leaders choosing to switch to Hong Kong stocks, such as Honey Snow Ice City and Mao Goping.
Among them, Mao Goping may be a very special one. Not only because of its high-end positioning and scarcity, but also because it may have more than expected factors, giving birth to unique market opportunities. It can be said that Mao Goping's IPO is worthy of in-depth discussion.
1. Find the real "blue ocean" and seize the market opportunity
Since 2023, the market of Chinese cosmetics industry has continued to expand, but the growth rate has slowed down and the volume has been upgraded.
Take a brief look at two sets of data: 1) according to the data of the National Bureau of Statistics, the total retail sales of cosmetics above the limit reached 414.2 billion yuan in 2023, with an increase of 5%.JungleJackpotJubilee.1%, only higher than-4 in 2022JungleJackpotJubilee.5%, which has not returned to the pre-epidemic level; 2) according to the data of Oteo Consulting, during the double 11 period in 2023, the average price discount rate of several well-known brands, including L'Or é al, was lower than that in 2022.
In this context, national cosmetics enterprises can only win dividends and start a new round of growth. In addition to comprehensive strength, from a strategic point of view, when national cosmetics enterprises compete collectively for "performance-to-price ratio", there may be better opportunities in the field of high-end cosmetics.
Although rational consumption is prevalent, consumers' requirements for product quality and services have not been reduced, the demand for consumer upgrading still exists, and the high-end makeup market is more resilient.
According to Frost Sullivan, the market size of China's high-end cosmetic brands is expected to reach 295.7 billion yuan from 2022 to 2027, with a compound annual growth rate of 10.2%, which continues to be faster than that of mass market cosmetic brands, and the gap between the two has widened.
At the same time, behind the collective price volume of national makeup enterprises and grabbing the market share of mass cosmetics, it actually means that the market itself will be very voluminous and the market competition is fierce, while the competition pattern of high-end cosmetics market is relatively good, and there are few domestic enterprises. Mao Goping is the only one in the head.
According to Frost Sullivan, Mao Goping is the only Chinese company among the top 10 high-end cosmetic groups in the Chinese market in terms of retail turnover in 2022, and MAOGEPING is the only domestic brand among the top 15 high-end cosmetic brands in the Chinese market.
The reason why it is said that the competition pattern of the high-end makeup market is better, there is also a premise that national makeup brands can gradually challenge international big names, Mao Goping and others begin to have the opportunity to participate in the redistribution of this market.
Nowadays, the popularity of domestic brands and products continues to improve, especially in the market competitiveness of the younger generation. At the same time, it is not uncommon for international big brands to be dissatisfied with local water and soil, and the trust of consumers is being loosened. For example, it can be seen that in 2023, the market share of domestic beauty makeup has surpassed that of overseas big brands for the first time; in January this year, Guerlain was ridiculed by the crowd for launching quantum face cream, and the anxiety of the big brands was gradually exposed.
In the long run, the high-end brand of national makeup is expected to accelerate its development by virtue of a deeper understanding of Chinese consumers and a unique brand image.
Finally, it is worth noting that the marketing logic and style of high-end brands are different from those of Volkswagen brands. For example, for high-end brands, the core competitiveness lies not only in the product itself, but also in whether the brand image can bring consumers a sense of superiority. The construction of brand image often needs long-term accumulation, which is not achieved overnight, so as to form a higher barrier and achieve the permanent strength of the strong.
Mao Goping, as the only national makeup leader in the high-end cosmetics market, has a certain first-mover advantage, and is expected to continue to consolidate its leading market position and realize high growth under the logic of "the rise of national makeup + Hengqiang of the strong".
2. Re-interpret "light R & D and emphasis on marketing" from three angles.
Focusing on the business model, the market is easy to misunderstand Mao Goping's "light R & D and emphasis on marketing", but different conclusions can be drawn from in-depth analysis. This point can be interpreted from three angles.
First, R & D investment is not entirely equal to R & D capability.
In essence, it can be seen that Mao Goping's make-up business accounts for a relatively high proportion of 56.2% of the income from the make-up business in 2023. The model characteristics of the make-up category determine that its R & D cycle is relatively short and the R & D cost is relatively low, which is different from the cosmetic enterprises dominated by skin care products. Superimposed Mao Geping has been ploughing the make-up business for many years and has rich experience. It is possible to achieve less investment but more results, showing higher R & D efficiency.
From the point of view of the results, large items and product matrix are good test indicators. According to the prospectus, some of Mao Goping's best-selling products have been widely recognized in the market, such as light-sensitive traceless powder series and luxury caviar mask, which have retail sales of more than 300 million yuan and 600 million yuan respectively in 2023. As of December 2023, Mao Goping has a rich product portfolio, including 378 items covering two categories.
Second, the proportion of real marketing expenses is not high, so it is more restrained.
On the whole, Mao Goping's sales and marketing expenses account for almost half of the revenue, which gives the market the impression that "marketing investment accounts for a relatively heavy proportion". But from a split point of view, it includes the teller's salary, which accounts for 33.4% in 2023; marketing and promotion expenditure is 557 million yuan, equivalent to 19.3% of revenue, and the proportion of real marketing expenses is not high.
Here, L'Or é al and Perea (603605) are selected as comparable companies.
According to L'Or é al's 2023 results, L'Or é al's spending on advertising and promotions accounted for 32.4% of sales, up 0.9% from a year earlier, and remained at more than 30% from 2021 to 2023.
For Pelaiya, sales expenses reached 2.271 billion yuan in the first three quarters of 2023, also accounting for more than 40 per cent of revenue, and sales expenses grew faster than revenue growth.
It can be said that Mao Goping's marketing expenses are relatively restrained.
Third, re-marketing is not a crime, the key is the stamina.
From a broader perspective, domestic cosmetic brands generally started late, but they have developed rapidly in recent years. At a specific stage in this process, the heavy marketing strategy does play a key role in the brand construction of national makeup and the improvement of market share. To some extent, re-marketing is not a crime, first marketing a brand and then re-research and development may also be a feasible way.
When the brand foundation is solid, enterprises can gradually increase R & D investment, so as to achieve the balance of marketing and R & D, and achieve sustainable development.
As mentioned above, the marketing logic and play of high-end brands are different from those of Volkswagen brands, and it is of strategic significance to form brand advantages first.
Looking back at Mao Geping, it has achieved brand results under relatively restrained marketing, and the pace is relatively steady. At the same time, Mao Goping has come to the stage of research and development, doing the right thing at the right time.
According to the prospectus, Mao Goping is building an R & D center in Hangzhou to build more than 30,000 square meters of industrial space to strengthen its product design and development capabilities, which is expected to be completed and put into operation within two years. At the same time, it strengthens its supply chain strength through the acquisition of contract manufacturers, becoming the third largest shareholder of Huamei Kangyan (Suzhou) Biotechnology Co., Ltd. (founder Wang Yihua was once the world-renowned cosmetics foundry Intercos Yingtri China CEO), which is expected to improve product strength as a whole.
3. Solve historical problems and further pave the way for listing
In addition, there may also be some misunderstanding about Mao Goping paying a large percentage of dividends before handing over the form to the HKEx.
Generally speaking, surprise dividend before listing is often interpreted by the market as an act of carving up "family wealth", harming the interests of future shareholders. However, the main reason behind Mao Goping's move is to raise funds for share buybacks and complete the completion of the "Jiuding system" to further pave the way for listing. The situation is different.
When Mao Goping voluntarily withdrew his IPO in January 2024, Suzhou Pushen Jiuding was Mao Goping's fourth largest shareholder and the highest outside shareholder with a 10 per cent stake. Just over three months later, Mao Goping submitted a prospectus to the Hong Kong Stock Exchange in April, which showed that its shareholding structure had changed. Suzhou Pushen Jiuding had transferred its shares and no longer held Mao Goping's shares.
In terms of the amount involved, Mao Goping declared a total dividend of 1 billion yuan to all shareholders, and 881 million yuan has been paid out. The transfer price of Suzhou Pushen Jiuding shares totaled 730 million yuan.
Behind this, since Jiuding Investment (600053) "collapsed house", the IPO process of a number of Jiuding holding enterprises has been blocked, and going to Jiuding has become the only way to accelerate listing. Perhaps for this reason, Mao Goping submitted the declaration materials of A-share IPO as early as 2016, followed by on-site inspection, multiple rounds of strict inquiry and feedback, and repeated material updates, although he successfully passed the meeting, but he has not been able to get approval.
Now, with the resolution of historical problems, Mao Goping's listing road no longer exists this kind of hard wound, become clearer, more worthy of expectation.
At the same time, it also lays the foundation for the long-term development of Mao Goping after listing. Ownership structure is the basis of corporate governance structure, which determines corporate behavior and performance. A clearer ownership structure can reduce investors' concerns about corporate governance and make it easier for investors to understand the value of the company.
4. Conclusion
Generally speaking, China's beauty industry has set off surging waves of the times, and the more incremental high-end beauty field is likely to be the competitive highland in the future. Mao Geping ran ahead early and became the only high-end makeup leader, with growth and certainty to be reckoned with.
Based on the international perspective, except for China, the top five cosmetic countries in the world have all given birth to the top ten cosmetic companies in the world. The emergence of the world's leading Chinese cosmetic enterprises is almost inevitable, and it is only a matter of time. Mao Goping is one of the potential players.
Happy to see that one day, brands such as Mao Geping will really gain a firm foothold on the world stage and have more international competitors than shoulder.
(: congratulations