Mao Geping Cosmetics: A Groundbreaking IPO

In an exciting development for the beauty industry, Mao Geping Cosmetics is gearing up to be the first Chinese cosmetics brand listed publicly on the Hong Kong Stock Exchange. Founded in 2000 by the celebrated makeup artist Mao Geping, the brand has gained widespread recognition for blending traditional Chinese aesthetics with modern beauty trends.

Approval and IPO Plans

The company, headquartered in Hangzhou, recently received approval from the China Securities Regulatory Commission and successfully cleared the hearing for its initial public offering (IPO) at the Hong Kong Stock Exchange. This move comes during a transformative time for Chinese companies eyeing offshore listings, particularly in light of a lengthy regulatory process that has left many, including online fashion giant Shein, in limbo.

Financial Outlook and Growth

Mao Geping's IPO, underwritten solely by Chinese investment bank CICC, aims to raise up to $300 million, with plans to issue a maximum of 1.15 billion shares. As the company prepares for its market debut, investor education has commenced, with expectations to officially list on the main board by December.

Remarkably, the brand has demonstrated impressive growth, achieving sales figures of 1.971 billion renminbi (around $272 million) in the first half of 2024—a staggering 41% increase compared to the previous year. The company’s net profits also soared to 492 million renminbi ($67.9 million), with a gross profit margin of 85%. This growth can be attributed to their strategic positioning in both online and offline retail, boasting 372 points of sale while also thriving on platforms like Tmall, Douyin, JD.com, and Xiaohongshu.

Brand Success and Market Positioning

Mao Geping Cosmetics operates two key brands: the flagship Mao Geping line and its second label, Zhi’ai Zhongsheng (Love for Keeps). The overwhelming success from the Mao Geping brand accounted for over 99% of the group’s sales in the initial half of 2024. The brand also emphasizes education in the beauty industry through its professional makeup school, which generated 71.5 million renminbi ($9.8 million) in revenue during the same period.

Industry Rankings and Public Persona

According to data from Frost & Sullivan, Mao Geping is notably the only Chinese company in the top 15 high-end cosmetic groups within the Chinese market, ranking 12th overall with a market share of 1.8%. Mao, a trained Yue Opera performer, has become a household name and is revered for his expertise in makeup for period dramas.

Overcoming Challenges for IPO

Although his journey to becoming a public company has faced challenges, including several rejections from Shanghai's A-share market over regulatory issues involving a minority shareholder, Mao remains undeterred. After repurchasing shares from Jiuding Capital, the company shifted its focus to Hong Kong, culminating in the current IPO application filed in April.

Anticipating a Landmark Moment

As anticipation builds for Mao Geping's public debut, the brand is also actively engaging a massive online audience. Mao Geping has amassed over 900,000 followers on his Bilibili account, where he shares innovative makeup techniques, often hailed as offering results "better than getting a facelift." With the IPO on the horizon, the beauty community eagerly awaits what could be a landmark moment for Chinese cosmetics on the global stage.

Stay tuned as the IPO unfolds—Mao Geping Cosmetics may just redefine the future of beauty investment!