CHANDO GLOBAL HOLDING LIMITED ("Chando"), whose IPO rumors have been circulating for a long time, has finally made its move official. Recently, Chando submitted its prospectus materials to target a Hong Kong Stock Exchange listing. The prospectus shows that currently, over 90% of Chando's revenue comes from its flagship brand Chando, having failed to successfully develop other brands into market successes. Additionally, compared to domestic leading companies Proya Cosmetics Co.,Ltd. and CHICMAX, Chando lags behind in both performance growth rates and profit margin levels.
**Targeting Hong Kong IPO**
Recently, Chando disclosed its prospectus materials, preparing to list on the Hong Kong stock market. According to the prospectus, based on Frost & Sullivan data, Chando ranks as China's third-largest domestic cosmetics group by retail sales in 2024. Its flagship brand Chando was established in 2001, and according to Frost & Sullivan data, Chando is China's second-largest domestic cosmetics brand by retail sales in 2024.
On October 9, Chando stated: "Based on comprehensive considerations of the current capital market environment, industry competitive landscape, and the company's strategic development stage, we have chosen to list in Hong Kong."
In fact, numerous companies have gone public in Hong Kong this year. Meanwhile, against the backdrop of Hong Kong stocks' continued strength, some companies have achieved excellent stock performance after listing. Take Maogeping, which listed previously, as an example - after successfully landing on the Hong Kong stock market, its share price has doubled to date.
iiMedia Research CEO Zhang Yi pointed out: "From a macro perspective, the Hong Kong stock market is performing relatively well overall. As an international capital market, an IPO in Hong Kong is beneficial for Chando to attract global investor participation and expand overseas markets. Chando's listing plan also stems from competitive pressure within the industry, as leading domestic beauty brands like Proya Cosmetics Co.,Ltd., Lin Qingxuan, and Maogeping have already gone public or are launching IPO plans. Against this backdrop, Chando also feels the pressure."
The prospectus shows that 61-year-old Zheng Chunying serves as Chando's Chief Executive Officer, Executive Director, and Chairman. Zheng Chunying's brothers Zheng Chunbin and Zheng Chunwei are executive directors of the company, while his sister Zheng Xiaodan serves as a non-executive director. In terms of shareholding structure, Zheng Chunying, Zheng Chunbin, Zheng Chunwei, Zheng Xiaodan, the founder BVI company, and the direct offshore holding company collectively have the right to exercise approximately 87.82% of the company's voting rights.
Shenzhen Siqi Sheng Company CEO Wu Daiqi pointed out: "This shareholding structure, from an internal management perspective, benefits the absolute control of family enterprises and can strictly execute the business policies and directions determined by the chairman. However, for a publicly funded listed company, minority shareholders have very little voice in the enterprise, which will affect investors' attitudes toward the company."
Additionally, Zhang Yi noted: "Chando's future succession will also be an issue to consider. Currently, Zheng Chunying is already 61 years old, and his brother is nearly 60, yet they are still leading operations. Currently, there are no obvious signals of second-generation family succession within the management team."
Furthermore, the prospectus shows that on the eve of the IPO, Chando received investments totaling 742 million yuan from Meitown and Himalaya International, with Meitown, belonging to the L'Oréal Group, investing 442 million yuan for a 6.67% stake. Himalaya International, backed by Jiagua Capital, invested 300 million yuan for a 4.2% stake.
**Missed Development Opportunities**
In terms of revenue scale, from 2022-2024, Chando's revenue was 4.292 billion yuan, 4.442 billion yuan, and 4.601 billion yuan respectively, with net profits of 139 million yuan, 302 million yuan, and 190 million yuan respectively. In the first half of 2025, Chando Group's revenue was 2.448 billion yuan, with net profit of 191 million yuan.
Regarding performance growth rates, from 2023 to the first half of 2025, Chando's revenue grew by 3.48%, 3.58%, and 6.42% respectively. Net profit showed volatility and did not maintain sustained growth.
In comparison, domestic companies Proya Cosmetics Co.,Ltd. and CHICMAX achieved high growth rates. According to Wind data, from 2023-2024, Proya Cosmetics Co.,Ltd.'s revenue grew by 39.45% and 21.04% respectively, with net profit attributable to parent company shareholders growing by 46.06% and 30.00% respectively. From 2023-2024, CHICMAX's revenue grew by 56.64% and 62.08% respectively, with net profits growing by 213.45% and 69.42% respectively.
Regarding the reasons for these gaps, daily chemical industry expert Bai Yunhu pointed out: "Subjectively, Chando founder Zheng Chunying is relatively conservative. Objectively, Proya Cosmetics Co.,Ltd. and CHICMAX had faster listing schedules, going public on A-shares and Hong Kong stocks in 2017 and 2022 respectively. For cosmetics companies, the boost from listing is significant. Because in recent years, the industry has required substantial capital investment to drive growth, listed companies can have more adequate funding and therefore make greater investments."
In terms of channels, from 2022 to the first half of 2025, Chando's online channel revenue proportion increased from 59.7% to 68.8%, while offline channel revenue proportion decreased from 40.0% to 30.9%. This channel data differs from domestic leading companies. Proya Cosmetics Co.,Ltd.'s 2024 annual report shows online revenue accounted for 95.06% in 2024. CHICMAX's 2024 annual report shows online channel revenue accounted for 90.5% in 2024.
Zhang Yi pointed out: "Chando's proportion in online channels is relatively lower, which also reflects that in channel strategy, Chando is overall more conservative. Additionally, in online platform deployment, companies like Proya Cosmetics Co.,Ltd. have achieved good results in TikTok live streaming channels. Meanwhile, Chando mainly relies on top streamers like Li Jiaqi, lacking the operational capability for self-media matrix management."
**Brand Portfolio Awaits Breakthrough**
The prospectus shows Chando operates five main cosmetics brands: flagship brand Chando, Puver, Maysu, Chunxia, and Jichū. Among these, the Chando brand contributes most of the revenue. From 2022-2024, Chando brand revenue was 4.06 billion yuan, 4.26 billion yuan, and 4.39 billion yuan respectively, accounting for 94.6%, 95.9%, and 95.4% of total revenue respectively. In the first half of 2025, Chando brand revenue was 2.32 billion yuan, accounting for 94.9% of total revenue.
Compared to other domestic daily chemical companies, leading industry company Proya Cosmetics Co.,Ltd. has successfully created cosmetics brand Caitang in recent years, with Caitang achieving revenue of 1.191 billion yuan in 2024, becoming another growth curve for the company. CHICMAX, besides Hanzoo, has also developed brands like Red Elephant and newpage.
In Bai Yunhu's view: "When Proya Cosmetics Co.,Ltd. acquired Caitang and developed it into a new growth curve, it was essentially because the listed company had sufficient funds to invest. But at Chando, we can see its low net profit margin, which means relatively poor profitability, making it challenging for Chando to invest large amounts of capital to build new brands."
The prospectus shows that from 2022-2024, Chando's gross profit margins were 66.5%, 67.8%, and 69.4% respectively, with net profit margins of 3.2%, 6.8%, and 4.1% respectively. In the first half of 2025, Chando's gross profit margin was 70.1%, with a net profit margin of 7.8%. Compared to domestic leading companies, Proya Cosmetics Co.,Ltd.'s 2024 sales gross profit margin was 71.39%, with a sales net profit margin of 14.71%. CHICMAX's 2024 gross profit margin was 75.2%.
Bai Yunhu pointed out: "Currently, mainstream cosmetics industry companies have net profit margins of 8%-12%. Relatively speaking, Chando's 7.8% profit margin is lower. This means Chando's revenue scale is relatively low while marketing investment is relatively high, resulting in compressed profit margins."
Shanghai Bogai Consulting founding partner Gao Jianfeng believes: "Actually, Chando's limited business growth is also related to their failure to successfully create new growth-oriented brands and their dependence on a single brand. But predictably, after listing, Chando can build a multi-brand matrix for the group through acquiring new brands."
Comments