Soochow Securities released a research report stating that FOREST CABIN (02657), with camellia as its core ingredient, is differentially positioned in the high-end skincare track. The company has experienced rapid performance growth since 2023, driven by volume expansion in online channels and outstanding performance of key products. The company is expected to list on 2025/12/30, with an estimated net IPO proceeds of approximately HKD 997 million (about RMB 897 million), primarily to be used for channel expansion and brand building. Based on FOREST CABIN being in a growth phase with overlapping brand momentum release and channel dividends, the report suggests investors actively monitor the stock. The main views of Soochow Securities are as follows:
A benchmark in premium domestic skincare, FOREST CABIN is an expert in camellia-based anti-aging and repair. Founded in 2003, FOREST CABIN is a high-end domestic skincare brand centered on its self-developed camellia essential oil, positioned in the anti-wrinkle and firming segment. As of H1 2025, FOREST CABIN operates 554 offline stores (over 95% located in high-end shopping malls). In 2024, it ranked first among Chinese high-end domestic skincare brands and was the only domestic brand in the top 15 high-end skincare brands overall, also leading domestic high-end skincare brands in store scale.
The facial essential oil segment within the skincare industry is expanding rapidly, and the company's camellia ingredient and clear differentiated high-end positioning are advantages. In 2024, the Chinese cosmetics market was approximately RMB 688.6 billion, with skincare having the largest sales share at 67%. The compound annual growth rate (CAGR) from 2019 to 2024 was 5.3%. Skincare positioned in the high-end segment is expected to achieve a sales CAGR of 13.8% from 2024 to 2029. Certain sub-segments, like facial essential oils, benefiting from ingredient innovation and the popularity of the 'oil nurturing' concept, saw a CAGR of 42.8% from 2019 to 2024 and are projected to reach a scale of RMB 13.9 billion by 2029. Regarding the competitive landscape in the essential oil track, this report compares brands like FOREST CABIN, PMPM, and AFU. FOREST CABIN's sales data has been first in its sub-segment since 2025, with products sharply differentiated by their focus on the core camellia ingredient, and its transaction price is significantly higher than domestic competitors due to its premium positioning.
The company is experiencing high-speed performance growth, with its profit structure continuously optimizing. In 2024, the company's revenue/net profit were RMB 1.21 billion/RMB 190 million, increasing +50%/+121% year-on-year, respectively. In H1 2025, revenue reached RMB 1.052 billion, up 98% year-on-year; net profit was RMB 182 million, up 110% year-on-year, showing near-doubling growth. In terms of products, key items perform strongly. The core product, Camellia Essential Oil, has ranked first in national facial essential oil sales for 11 consecutive years since its launch. In H1 2025, sales of this single product grew 176% year-on-year, accounting for 45.5% of revenue. Channel-wise, online channels, especially Douyin, experienced explosive growth. Online revenue in H1 2025 grew 137% year-on-year, with its proportion rising to 65.4%. The company uses its high-end offline stores as experience entry points, combined with online content marketing and live streaming by its founder IP, building an "experience + transaction" closed loop.
FOREST CABIN's IPO fundraising will strengthen its brand, channels, and multi-brand matrix, among other areas. According to FOREST CABIN's Hong Kong IPO prospectus, the net proceeds are expected to be around HKD 997 million, core focuses include brand, channels, supply chain, R&D, and a multi-brand matrix. The report identifies three long-term points of interest: 1) Brand rejuvenation: leveraging offline skincare treatment scenarios to expand the online young customer base; 2) Brand-channel synergy: synergies between the offline aesthetic brand and skincare key products, plus future expansion into younger sub-brands and community aesthetic offline chain brands; 3) Brand scenario expansion: extending from the core anti-aging segment into high-potential categories like whitening and color cosmetics, breaking through the ceiling of the niche market.
Profit forecast: The report forecasts the company's net profit attributable to owners for 2025-2027 to be RMB 382 million, RMB 578 million, and RMB 742 million, representing year-on-year growth of 104.24%, 51.50%, and 28.38%, respectively. Based on the IPO issue price of HKD 77.77 per share, the corresponding P/E ratios for 2025-2027 are approximately 26x, 17x, and 13x.
Risk提示: Intensifying industry competition; new product promotion falling short of expectations; rising online traffic costs; consumer recovery falling short of expectations.
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