Shanghai Chicmax Cosmetic (2145) H1 2024 earnings summary

Executive summary

• H1 2024 revenue rose 120.7% YoY to RMB3,502.4m; gross profit increased 144.6% to RMB2,679.9m and profit for the period reached RMB412.4m, versus RMB100.9m.

• KANS generated RMB2,926.5m, or 83.6% of revenue, while online channels contributed 90.6%; growth was led by online direct sales and upgraded products.

Financial highlights

• Revenue was RMB3,502.4m versus RMB1,586.8m in H1 2023; gross profit was RMB2,679.9m versus RMB1,095.5m.

• Profit before tax was RMB468.5m; profit attributable to owners was RMB401.2m and basic and diluted EPS was RMB1.01, versus RMB100.965m and RMB0.25 in H1 2023.

• Gross margin expanded to 76.5% from 69.0%, attributed primarily to a higher DTC mix.

• Selling and distribution expenses increased 137.1% to RMB2,016.6m, or 57.6% of revenue versus 53.6%; marketing and promotion costs rose 169.2% to RMB1,694.9m.

• R&D costs rose 43.9% to RMB78.3m; administrative expenses increased 1.7% to RMB113.8m, while finance costs fell 72.6% to RMB3.2m.

Outlook and guidance

• The six-six strategy targets growth through six competitive capabilities and six business sectors, prioritizing talent, R&D, AI-enabled management, marketing, intelligent production and platform development.

• Plans include deeper online and offline channel coverage, stronger development on Tmall/Taobao, JD and Kuaishou, and further Douyin growth across brands.

• Longer-term plans span mass skincare, personal care, maternity and baby products, skin medical beauty, makeup, and high-end skincare and instruments.