Amidst a wave of shareholder selling, the share price of MAO GEPING (01318.HK), known as the "first makeup stock" on the Hong Kong market, has breached its support level.
On May 15, MAO GEPING's stock price gapped down to open at HK$63 per share. Following the opening, it experienced a sharp sell-off, plunging nearly 17% at one point during the session to a low of HK$55.4 per share, setting a record for its largest intraday decline. The sharp drop attracted buying support, and the stock ultimately closed at HK$61.6 per share, down 7.58% for the day, resulting in a total market capitalization of HK$30.196 billion.
The unusual price movement stemmed from shareholder divestment. Prior reports indicated that shareholders Ding Tao and Xu Kejun planned to sell 9.87 million shares through J.P. Morgan at a price between HK$63.3 and HK$65 per share, representing a discount of approximately 2.5% to 5% compared to the May 14 closing price of HK$66.65. Before the morning session opened on May 15 (at 9:18 AM), MAO GEPING recorded two block trades totaling 9.8731 million shares in non-automated matching transactions, executed at HK$63.3 per share. This price was a 5% discount to the previous trading day's close, involving approximately HK$625 million.
This is not the first divestment by MAO GEPING this year. In early January, the company disclosed an announcement stating that its controlling shareholders Mao Geping and Wang Liqun, along with executive directors Mao Niping, Mao Huiping, Wang Lihua, and Song Hongquan, intended to reduce their holdings of the company's H-shares by a total of no more than 17.2 million shares over the next six months, representing no more than 3.51% of the company's total issued shares. Among these sellers, only Song Hongquan is a core senior executive of the listed company; the others are members of the Mao Geping family. Consequently, this divestment was viewed as a collective "cashing out" by the founding family.
Looking back, MAO GEPING listed on the Hong Kong Stock Exchange in December 2024 with an issue price of HK$29.8. Approximately six months later, its stock price reached a peak of HK$130.6, pushing its total market capitalization above HK$62.4 billion. At that time, it was dubbed the "Moutai of Cosmetics" by some investors.
However, the company's stock price has since trended downward. According to data from East Money Choice, from February 24 to March 3 of this year, MAO GEPING's stock price fell for six consecutive trading sessions, with a cumulative decline of 17.55%. It then continued another six-day losing streak from May 8 to May 15, with a cumulative decline of 17.87%. As of the close on May 15, MAO GEPING's total market capitalization has evaporated by over 50% from its peak.
In terms of financial performance, last year MAO GEPING achieved revenue of RMB 5.051 billion, a year-on-year increase of 30%. Its net profit attributable to shareholders grew 36.73% year-on-year to RMB 1.204 billion. The gross profit margin for the period decreased by 0.15 percentage points to 84.22%. During the reporting period, the company's makeup category contributed revenue of RMB 2.996 billion, up 30.04% year-on-year. The number of products sold reached 16.9889 million units, an increase of 30.89% compared to the same period last year. However, the average selling price per unit decreased from RMB 177.5 in 2024 to RMB 176.4. This led to a decline in product profitability, with the gross profit margin for the makeup category dropping 0.31 percentage points year-on-year to 83.33%.
In contrast, the skincare category showed an opposite trend. Last year, the sales volume for this category reached 5.7047 million units, up from 4.5776 million units in the same period last year. Simultaneously, the average selling price per unit increased from RMB 312.2 to RMB 328.3. Overall, MAO GEPING's skincare category generated revenue of RMB 1.873 billion, with a year-on-year growth rate of 31.08%, exceeding that of the makeup category. During the reporting period, the retail sales of the company's Black Gold series products exceeded RMB 150 million, while the retail sales of the Luxe Caviar Mask and Eye Mask products surpassed RMB 1 billion and RMB 100 million, respectively. The retail sales of the Nourishing Black Cream product exceeded RMB 300 million.
Additionally, MAO GEPING's fragrance category achieved revenue of RMB 33.84 million, with a gross profit margin of 78.45% and an average selling price per unit of RMB 309.5.
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