Chicmax Group Submits Prospectus for Hong Kong Listing

How powerful is Chicmax Group?

Chicmax is one step closer to being listed. 

On January 17, according to the disclosure of Hong Kong Exchanges and Clearing Limited (HKEX), Shanghai Chicmax Cosmetics Co., Ltd. (hereinafter referred to as "Chicmax Group"), the parent company of Kans, a well-known domestic cosmetics company, submitted a prospectus to HKEX, officially hitting the ground running for Hong Kong listing.

Chicmax Group (full name: Shanghai Chicmax Cosmetics Co., Ltd.) originated in Shanghai in 2002. After several rounds of equity transfer, Yixiong Lvcurrently holds 40.96% and 50.31% of the company’s shares directly and indirectly, respectively. On December 24, 2020 the company was restructured into a joint-stock company and renamed to Shanghai Chicmax Cosmetics Co., Ltd.

Currently, Chicmax has developed into a leading multi-brand domestic cosmetics company in China's cosmetics industry, with well-known brands such as Kans, One Leaf and Baby Elephant, and products covering skin care, facial mask, maternal and child care, washing and care, and other categories.

01

In the First Nine Months of 2021, 

the Revenue Hits RMB2.596 billion, 

with a Gross Profit Margin of 65.2%

According to the prospectus submitted, Chicmax Group has developed rapidly since its establishment. The Group’s revenue in 2019 was RMB 2.874 billion, in 2020 it was RMB 3.382 billion, in 2020 Jan-Sep it was RMB 2.302 billion and in 2021 Jan-Sep it was RMB 2.596 billion.

Its gross profits in the above time frames were RMB1.749 billion, RMB2.187 billion, RMB1.488 billion and RMB1.692 billion respectively, with gross profit margins of 60.9%, 64.7%, 64.6% and 65.2% respectively.

Looking at the gross profits of the Looking at , Winona's parent company Kunming Botanee Biotechnology Co., Ltd. is the leader in the industry with a high gross profit of over 80%. According to the 2020 annual financial statements of the following  companies, the gross profits of MARUBI, YSG (the parent company of Perfect Diary), Proya, and Shanghai Jahwa were 66.2%, 64.35%, 63.6%, and 59.9%, respectively.

In 2019 and 2020, the adjusted profits of Chicmax Group were RMB114 million and RMB265 million respectively, and the adjusted profits in the first three quarters of 2021 totaled RMB285 million, an increase of 45.3% over the same period of last year.

02

Three Brands Rank First in Several Categories

Currently the sales of the three major brands Kans, One Leaf and Baby Elephant account for 91.1% of the Group’s total.

In order to meet the ever-changing market demand, Chicmax Group has been constantly incubating and developing new brands for different consumer groups. In recent years, the Group has successively launched brands such as Bio-G, Asnami and Kyoca, and established its presence in sensitive skin care, hair care, sensitive skin care products for infants and pregnant women, and high-end anti-aging market. It is expected that in 2022 Chicmax  will launch three brands: Pure Real, New Page and Kosaku Yamada.

According to the prospectus, for the nine months ended September 30, 2021 Chicmax Group ranked in the top three domestic brands in skin care products retail sales, ranked first in domestic brand maternal and child care products, and ranked first in domestic brand facial mask products.

03

With Online Channels Accounting for 72.9%,

Chicmax is Making Efforts to Explorethe Growth Potential of New Channels

In terms of channels, Chicmax has established a comprehensive online and offline retail and distribution network, and has developed a multi-channel sales and all-media marketing layout. According to relevant data,for the nine months ended September 30, 2021, Chicmax Group’s online channel revenue was RMB1.893 billion, accounting for 72.9% of the Group’s total, of which online self- operating accounted for 41% as the main source of revenue, while offline channel revenue accounted for 24.2%.

In terms of online channels, Chicmax Group has established long-term cooperation with major e-commerce platforms such as Tmall and JD.COM, while actively exploring new growth potential in emerging media platforms such as Douyin and Kuaishou. According to relevant data, the online sales of Chicmax Group in 2020 was RMB2.543 billion, an increase of 69.0% year over year. For the nine months ended September 30, 2021, the company's online retail sales ranked the top three among domestic brands.

According to the Prospectus, Chicmax Group has such a large customer base that the group does not rely on any single customer. In 2020 and for the nine months ended September 30, 2021, the revenues generated by the Group’s five major customers respectively accounted for 34.7%, 26.4% and 29.0% of the total revenue in the same period. In 2019, 2020 and for the nine months ended September 30, 2021, the revenues generated by the largest customer company A (an offline retailer) accounted for 17.2%, 10.7% and 12.1% of the total revenue in the same period, respectively. 

04

Adhering to Independent R&D,

 Chicmax will Focus on Brand Building after IPO

Since 2003, Chicmax Group has always adhered to independent research and development. According to the Prospectus, the company has established two scientific research centers and two supply chains in China and Japan. Up to September 30, 2021 the Group’s self-developed products accounted for more than 97% of the total revenue. Attaching great importance to basic research and development, Chicmax Group is the first domestic cosmetics enterprise to build its own research and development center overseas..

According to the Prospectus, Chicmax Group intends to raise funds for brand building, and will further implement the multi-brand strategy, consolidate and upgrade the main brands, build new brands, enhance brand image and popularity. Chicmax Group will also enhance R&D capabilities, maintain continuous brand innovation, strengthen production and supply chain capabilities, increase the breadth and depth of the sales network, improve digital and information infrastructure, etc.