Shanghai Chicmax Cosmetic (2145) H2 2023 earnings summary

Executive summary

• FY2023 revenue rose 56.6% YoY to RMB4,190.7m; gross profit increased 77.7% to RMB3,019.5m and profit for the year reached RMB461.7m, versus RMB137.1m in 2022.

• Growth was led by KANS and online direct sales; One Leaf and Baby Elephant revenue declined amid brand transformation and intense competition.

Financial highlights

• Gross profit margin was 72.1% in 2023, up from 63.5% in 2022, primarily reflecting higher KANS margin.

• Selling and distribution expenses rose to RMB2,240.3m from RMB1,257.7m; expenses were 53.5% of revenue versus 47.0%, with marketing and promotion at RMB1,745.9m.

• Administrative expenses fell 6.2% to RMB209.6m; R&D costs rose 14.1% to RMB125.8m, while income tax expense increased to RMB97.6m from RMB17.2m.

• Basic and diluted EPS was RMB1.16, versus RMB0.41 in 2022; profit attributable to parent owners was RMB461.1m.

Outlook and guidance

• The six-six strategy targets growth through talent, R&D, AI-enabled management, marketing networks, intelligent production and platform-based development.

• R&D priorities include anti-aging and skin-barrier technologies, new ingredients and formulas, and piloting brands and products; plans also include broader e-commerce and offline omnichannel reach.

• Long-term plans cover six sectors: mass skincare, washing and personal care, maternal and baby products, skin medical beauty, makeup, and high-end skincare and instruments.