MISIFU Ready for Listing Amid Existing COVID-19

On June 9, 2022, BST, Suzhou Misifu Cosmetic Limited Company(hereinafter referred to as "MISIFU") announced that it has entered the counseling stage of listing on the Beijing Stock Exchange. As CHAILEEDO observation, as early as 2016, MISIFU completed its listing on the National Equities Exchange and Quotations. In May this year, MISIFU was transferred to the innovation layer. After a month, MISIFU officially announced that it would enter the Beijing Stock Exchange.

According to the policy of the Beijing Stock Exchange, one of the admission criteria mentions that the expected market value is not less than $30 million, the net profit for the last two years is not less than $2.2 million and the weighted average return on net assets is not less than 8% on average.

As of today's close, the market capitalization of MISIFU is $214 million, its net profit for the last two years is above $2.24 million, and its weighted average return on net assets is 23% in 2021, compared to 32.51% in the same period last year, much higher than the 8% required by the rules.

Founded in 2011, MISIFU focuses on single-brand cosmetic store cosmetic sales and the operation and management of the MISIFU brand and single-brand stores. Its products cover skin care, color cosmetics, skincare facial masks, and other categories. Its revenue in 2021 reached 148 million yuan ($22 million), up 16.98% year-on-year with a gross margin of 46%.

Between 2019 and 2021, MISIFU's revenue continued to rise, achieving $18.4 million, $19 million, and $22.1 million respectively. In 2021, MISIFU's revenue increased by 16.98% year-on-year, the highest increase in the past three years. Even in 2020 when the pandemic hit the industry hard, MISIFU's revenue maintained a 2.99% increase.

The brand's official website showed that since the founding of the first single-brand store in 2012, MISIFU stores have been upgraded to version 5.0. According to the official website, the number of MISIFU stores exceeded 100 in 2014, and 500 in 2020. By 2025, the number of MISIFU stores is planned to exceed 2,000, with 1.5 million+ members.

In 2016, MISIFU Smart Store was launched and officially entered the online market. Nowadays, in terms of sales and operation mode, MISIFU mainly builds its sales network through single-brand stores and constructs a "trinity" operation and management model based on offline physical stores, online stores, and data operation.

In terms of back-end management, MISIFU has built a data management platform for user skin data management, membership data management, and store operation data management with the aim of gaining insight into consumer preferences and improving satisfaction and repurchase. According to MISIFU's big data statistics, the sales contribution rate of its store members reaches 85%, the sales contribution rate of customers with 10 years of consumption history reaches 10%, and the contribution to the performance of customers with more than 5 years of consumption accounts for 50%.

In addition, in the standardized operation section, MISIFU has formulated 8 store standardized management guidebooks and 16 store standardized retail management tools.

The 5.0 version of the store was launched positioning the store in the fashionable new traditional Chinese style. The back counter of the store was upgraded from the original single style and function to a regular skin care area, a key skincare area, a star product area, a mask area, a color cosmetics area, and other sub-regional and multi-level settings. The product display also made a breakthrough in the framework of small categories and color cosmetics and made a multi-point display of key skincare products according to the distribution of consumers browsing in the store.

It is worth mentioning that in 2021, MISIFU started to invest in R&D. Prior to that, MISIFU had zero R&D expenses. This means that until 2021, MISIFU's products come from ODM, OEM or OBM factories.

However, in 2021, it spends $426 thousand on R&D, accounting for 1.92% of revenue. In the same period, MISIFU's selling expenses accounted for 15.93%, up 21.23% year-on-year.

Among its partners, MISIFU has assembled cutting-edge global cosmetic raw material suppliers, production and R&D institutions, and renowned research institutes such as BASF, Firmenich, Korea Kolmar, and Italy Intercos, and has entered into close strategic cooperation with them, aiming to continuously provide users with high-quality skin care.