China Largest Market Value Beauty Company Changes Hands
- Chaileedo Press
- May 23, 2023
- 6 min read
As of the close of trading on the 22nd, the total market value of Chinese beauty company PROYA was 48.81 billion yuan ($6.88 billion), leading second-place Bloomage Biotech over 3 billion yuan ($425.4 million).
Yesterday (May 22), Chinese beauty company PROYA's stock rose to 173.86 yuan ($24.7) per share, with a total market value of 48.81 billion yuan ($6.88 billion). This number means that PROYA has surpassed Bloomage Biotech, BTN, and other enterprises, becoming the top market value company among domestic beauty and cosmetics listed companies.
Retained the top status steady
This is not the first time Proya Group has reached the top in market value. Not long ago, Proya Group had also led with a slight advantage, but was quickly overtaken by Bloomage Biotech, BTN, and other companies. Currently, the market values of these three companies are still very close, making them "evenly matched."
It is worth mentioning that although the top Chinese cosmetics market value often changes hands, companies represented by Proya Group, Bloomage Biotech, BTN, and Giant Biogene have consistently led the market in total value, occupying the first echelon.
As of the close of trading on the May 22nd, the total market values of Proya Group, Bloomage Biotech, and BTN were 48.81 billion yuan ($6.9 billion), 45.37 billion yuan ($6.4 billion), and 44.78 billion yuan ($6.3 billion), respectively, firmly occupying the top three positions in the market value of Chinese beauty and cosmetics, with PROYA leading fourth-place Giant Biogene by over 10 billion yuan ($1.4 billion)(currently Giant Biogene's market value is 35.82 billion yuan, $5.08 billion), and leading fifth-place Shanghai Jahwa by over 20 billion yuan ($2.8 billion) (currently Shanghai Jahwa's market value is 20.36 billion yuan, $2.89 billion).
This achievement is the result of Proya Group's years of hard work, with the company dedicated to providing consumers with high-quality cosmetics products. This rise also reflects the market's confidence in Proya Group and the degree of trust in Chinese beauty and cosmetics brands.
(Credit: PROYA offline exhibition)
Revenue exceeded 6 billion yuan ($850.8 million) in the 2022
Proya Group was founded in 1982 and is headquartered in Hangzhou. The company's products cover multiple fields, including cosmetics, skincare, and perfume, and its brands include PROYA, Timage, and Hapsode. The company has always focused on research and development and innovation, constantly introducing new products and services to provide consumers with better experiences.
On April 20th of this year, Proya Group announced its financial report for the FY2022. According to the report, it achieved a operating revenue of 6.385 billion yuan ($905.3 million), an increase of 37.82% from the previous year, and net profit attributable to shareholders of the listed company of 817 million yuan ($115.8 million), an increase of 41.88% from the previous year.
Compared with previous years' financial data, Proya Group's operating revenue and net profit attributable to shareholders growth rates were the highest in nearly four years. In just four years, PROYA has grown from of less than 2 billion yuan ($283.6 million) to over 6 billion yuan ($850.8 million).
Furthermore, Proya Group has maintained a steady growth momentum this year. According to the financial report, Proya Group achieved a total operating revenue of 1.622 billion yuan ($230 million) in the first quarter of 2023, a year-on-year increase of 29.27%, and a net profit attributable to shareholders of the listed company of 208 million yuan ($29.5 million), a year-on-year increase of 31.32%.
In the press release of Proya Group's major brand operating data for April 2023, released on May 21st, the company disclosed that the sales momentum of each brand in April was good, achieving steady growth. According to preliminary calculations, the flagship store on Tmall of main brand Proya achieved GMV of about 228 million yuan ($32.3 million) in April, a year-on-year increase of about 57%. The GMV on Douyin (Chinese version of TikTok) platform was around 135 million yuan ($19.1 million), a year-on-year increase of about 40%. The Tmall flagship store of the Timage achieved a GMV of about 45 million yuan ($6.4 million), a year-on-year increase of about 95%. The GMV on Douyin platform was about 29 million yuan ($4.1 million), a year-on-year increase of about 69%.
How did Proya Group operating revenue grow 170% in four years?
Proya Group stated that the continued growth in 2022's performance was mainly due to its ongoing promotion of the "6N" strategy (new consumption, new marketing, new organization, new mechanism, new technology, new intelligent manufacturing), deepening the "multi-brand, multi-category, multi-channel" strategy and the "large single product strategy." Its main brand Proya Group saw steady growth in sales, while other brands such as Caitang saw rapid growth, especially in the steady growth of online channels.
Currently, with its main brand Proya, Proya Group has expanded into makeup Timage, skincare Hapsode, and personal care Off & Relax, forming a diversified brand matrix.
However, Proya Group's main growth driver is still the core brand Proya. Financial reports showed that core brand Proya revenue still accounts for 82.74% of the group's total revenue. It's worth mentioning that in 2022, the company's core brand Proya became the only A-share cosmetics company with with a single-brand market value of over 5 billion yuan, with total revenue reaching 5.264 billion yuan ($746.5 million), a year-on-year increase of 37.46%.
Proya's first hero product was Bubble Mask launched in 2019. In just August 2019, the Bubble Mask's monthly sales exceeded 100 million yuan ($14.2 million), becoming the driving force behind the growth of the official flagship store's sales and igniting the long-dormant brand in the market.
After that, Proya began to explore the path of creating hero products.
According to a report by Economic Observer, in 2019, the domestic market's awareness of functional skincare was not high, but Proya Group had already started planning a retinol-based single product, undergoing more than a year of internal research and development. This was the precursor to the now-popular Deep Ocean product. The report also mentioned that "after the product was launched, they spent a lot of money on marketing and promotion, bringing up the concept."
(Credit: Proya Deep Energy Series)
In early 2020, Proya Group officially launched the Ruby Essence. The powerful and cost-effective Deep Ocean Essence allowed Proya Group to raise its value to a higher level, creating even more impressive results for the brand.
In 2021, Proya upgraded two single products, the Deep Ocean Energy Essence and Double Effect Brightening Essence. Although positioned as highly effective products, PROYA did not name them after their ingredients like The Ordinary or HFP did. Instead, PROYA relied on the "Morning C, Evening A"(a skincare routine that popular in China, which means apply Vitamin C in the morning and Alcohol A in the evening) that was popular on social media at the time and used a binding marketing strategy to promote both products.
According to list of cosmetics on Tmall during the 2022 Double 11 Shopping Festival, PROYA ranked first in the Tmall Chinese beauty category. The Double Effect Brightening Essence, the "Morning C, Evening A" set and the Deep Energy face cream all exceeding 200 million yuan ($28.4 million) in sales.
After analyzing the revenue of Chinese brands in 2022, CHAILEEDO found that, based on the publicly disclosed data, besides the PROYA brand, Winona was also close to the 5 billion yuan ($709 million) threshold, achieving revenue of 4.89 billion yuan ($693.4 million). Brands like Kefumei, Maogeping, Simpcare, and Biohyalux are still striving to reach the 2 billion yuan ($283.6 million). It can be said that PROYA and Winona have achieved a significant lead among Chinese beauty brands.
Regarding other brands, the makeup brand Timage has already turned its losses into profits, while Hapsode and Off & Relax have also become profitable. The second growth curve led by Timage has already emerged for PROYA.
Taking the Timage as an example, the financial report shows that in 2022, Timage's single-brand revenue exceeded 572 million yuan ($81.1 million), a year-on-year increase of 132.04%. Public data shows that during the Double Eleven shopping festival last year, Timage's three-color contouring palette ranked first in the Tmall highlighter category, its Master Makeup Primer ranked second in the Tmall makeup primer category, and its three-color concealer palette ranked second in the Tmall concealer category.
In the third quarter earnings conference call, PROYA also made plans for other brands in the second growth curve. Off & Relax will further improve brand endorsement, enhance brand tonality, and improve research and development capabilities. Hapsode will deepen its focus on young oily skin positioning, expand new product categories around the needs of young oily skin consumers.
In the increasingly competitive market for Chinese cosmetic brands, PROYA's ability to maintain its leading position also indicates an increase in consumer recognition and trust in Chinese cosmetic brands. In the future, PROYA will continue to strengthen brand building, product innovation, and channel upgrading, providing consumers with better products and services, and maintaining stable development and a leading position.
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