In the first half of 2026, CHICMAX delivered its first interim report since listing with both revenue and net profit in decline. The company generated RMB 3.756 billion in revenue, down 8.6% year-on-year, while profit for the period plunged 77.4% to just RMB 126 million, with the net margin collapsing from 13.5% in the prior-year period to 3.3%.
Capital markets reacted sharply—after the profit warning was disclosed on August 17, the company's share price cratered over 20% the next day; by the close on August 31, shares were at HK$21.66, roughly 80% below the peak of around HK$104.8 a year earlier, with year-to-date losses reaching 68%. The core of this dismal report card points squarely at one brand: Han Shu (韩束).
The single-engine stall: the segment contributing over 70% of revenue turned negative for the first time
Han Shu has long contributed over 70% of CHICMAX's revenue. In 2024, Han Shu's revenue was RMB 5.591 billion, representing 82.3% of total group revenue, driving overall revenue up 62% to RMB 6.793 billion; in 2025, Han Shu's revenue further grew 31.6% to RMB 7.360 billion, pushing group revenue to a historical high of RMB 9.178 billion.
However, in the first half of 2026, Han Shu generated RMB 2.661 billion, down 20.4% year-on-year, with its share of group revenue falling from 81.4% in the prior-year period to 70.8%. The brand sold RMB 683 million less in six months, directly dragging the group's overall revenue into negative territory.
The slowdown was not without warning signs. In the first two months of 2026, Han Shu's online sales fell 19.68% year-on-year to RMB 1.249 billion, including a 26.43% decline on Douyin. On this year's "618" cosmetics ranking, Han Shu dropped from the top spot in the past two years to sixth place on Douyin. Third-party data shows that in the first half, Han Shu's GMV on Douyin was approximately RMB 2.55 billion, compared to about RMB 3.63 billion in the same period of 2025.
Why is Han Shu struggling to sell? While revenue declined, expenses failed to shrink in tandem, and the reverse effect of operating leverage amplified the profit drop.
Spending RMB 55 on traffic for every RMB 100 earned: the dilemma of a marketing-driven model
In the first half of 2026, CHICMAX's selling and distribution expenses reached RMB 2.481 billion, up 6.2% year-on-year, with the ratio to revenue leaping from 56.9% in the prior-year period to 66.1%. Marketing and promotion spending was RMB 2.085 billion, with the ratio to revenue rising from 50.4% to 55.5%—meaning that for every RMB 100 of revenue, CHICMAX had to spend over RMB 55 on traffic and exposure.
This stands in stark contrast to the company's gross margin trend. The gross margin actually improved by 1.2 percentage points to 76.7% in the first half, demonstrating solid product profitability, but gross profit was largely consumed by expenses. Total period expense ratio reached 74.9%, up 11.7 percentage points year-on-year, including a selling expense ratio of 66.1% (up 9.2 percentage points), an administrative expense ratio of 4.8% (up 1.1 percentage points), and an R&D expense ratio of 3.7% (up 1.2 percentage points).
Han Shu's growth over recent years was built precisely on this high-investment model—leveraging influencer short dramas for exposure, using high-value gift sets like Hong Man Yao (红蛮腰) to close transactions, and scaling via Douyin self-broadcasting. From 2023 to 2025, Han Shu's revenue grew from RMB 3.090 billion to RMB 7.363 billion, quickly becoming the absolute pillar of CHICMAX.
During the high-growth period, the continuously expanding sales scale could cover the costs of advertising and operations; but once growth slowed, expenses were hard to cut in tandem, and operating leverage worked in reverse against profits. Notably, while Han Shu's GMV remains considerable, the efficiency of its conversion into corporate revenue and profit is declining. The core gift set is entering maturity, competition in Douyin beauty is intensifying, and Han Shu's expansion into men's care, hair care, and color cosmetics has not translated proportionally into profitability. Traffic is still there, but it's getting increasingly expensive.
94% of revenue from online: single-channel dependency exposes concentrated risk
CHICMAX's reliance on online channels is deepening. In the first half, online channel revenue reached RMB 3.536 billion, accounting for as much as 94.1% of total revenue, up another 1.4 percentage points from the prior year; offline revenue declined 34.3% to just RMB 177 million. This means any fluctuation in Han Shu's performance on Douyin transmits almost without attenuation to the group's results.
The renewed push by international brands has further intensified this pressure. Estée Lauder's management has repeatedly mentioned Douyin in earnings calls, noting that "online channels account for over 50% of our China business, and we have 11 brands on Douyin." On this year's "618" cosmetics brand ranking, Estée Lauder and La Mer ranked first and third on Douyin, respectively.
Zhang Yi, CEO of iMedia Consulting, pointed out: "CHICMAX's channels and brands are relatively concentrated, and this model can create systemic risk that erupts in a concentrated manner. In the first half, the main brand Han Shu declined, compounded by rigid expenses, exposing the company's structural risk all at once."
Cracks in brand trust: from "banned ingredients" to "false advertising"
Deeper than the earnings decline is a concern over eroding brand trust. In December 2025, CCTV's "Economic Half Hour" program sent multiple popular cosmetics for testing, with results showing that Han Shu's Firming & Lifting Essence Mask contained epidermal growth factor (EGF) at 0.07 pg/g, while another Whitening & Brightening Mask had EGF levels as high as 3.21 pg/g. EGF has been explicitly listed as a banned ingredient in cosmetics by China's National Medical Products Administration since 2019.
Han Shu subsequently issued a statement asserting that none of its products contained EGF, and presented test reports from the Shanghai Municipal Drug Administration and third-party SGS, but the "testing standoff" between CCTV and the brand shook some consumers' confidence in the brand's integrity.
Around the release of the interim report, Han Shu once again fell into a false advertising controversy. Consumers complained that one of Han Shu's anti-hair loss shampoos was suspected of false advertising—the merchant used AI-generated short videos with voiceovers to make efficacy promises like "if hair doesn't grow in seven days, we'll compensate you RMB 10,000," yet when consumers asked customer service after purchase, they were told the product "has no hair growth function." Han Shu responded that the product is positioned as "anti-hair loss" and "does not promote hair growth," and with intervention from Shanghai market regulators, the related complaints were resolved—but ads hinting at hair growth effects continued to be pushed on short-video platforms.
Zhu Wei, deputy director of the Communication Law Research Center at China University of Political Science and Law, stated that such marketing "is a typical false advertisement," potentially violating the Advertising Law and the Consumer Rights Protection Law.
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