Abstract: The parent company of UNIFON, S'Young, released its 2022 semi-annual report. in the first half of 2022, S'Young achieved operating revenue of about 2.201 billion yuan, up 3.89% year-on-year; Its lotion category revenue increased 50.23% year-on-year. According to CHAILEEDO, S'Young was formerly known as Yu Jia Hui. In 2006, the main brand UNIFON was born, based on which Yu Jia Hui was established in 2012. In 2015, Yu Jia Hui began to operate as an agent of international brands' online business. Its first agent brand is the Korean mask brand Leaders. Then the company added Japanese Dr. Ci:Labo, Italian fashion makeup KIKO and other agent businesses. In 2018, S'Young was listed on the stock exchange. At present, the group has brands such as UNIFON, Mihoo, and HPH. However, the company's performance did not soar in the first two years after its going list. CHAILEEDO has found that the company's revenue increased from $243.9 million (in 2017) before the IPO to $742.5 million in 2021, a twofold increase in five years after analyzing its financial report of S'Young. In particular, 2020 saw a dramatic increase in net profit of 417.58%, a change from the previous two years. And it also still maintained a 70% increase in net profit last year. However, S'Young has been in a situation of increasing revenue but not profit. In 2018, S'Young's total revenue rose 36.42% and net profit attributable to shareholders of the listed company fell 17.51%. In 2019, total revenue rose 7.60% and net profit attributable to shareholders of the listed company fell 79.97%. In 2020 and 2021, the situation improved due to the steady expansion of its own brands plus agency brands and the booming market of China's cosmetics industry with total revenue up 54.11% and net profit attributable to shareholders of the listed company up 417.58% in 2020. In 2021, its total revenue soared by 26.37% and net profit attributable to shareholders of the listed company increased by 18.18% in 2021. However, in 2022, S'Young returned to the formal situation that increased revenue, not profit, according to the S'Young released in the latest 2022 first half financial report. Its operating income rose 3.89% and net profit attributable to shareholders of the listed company fell 6.88%. For this year's profit decline, the S'Young explained that, during the reporting period, by the repeated impact of COVID-19 in China and worldwide and some regional supply chain and logistics restrictions, the company's own brand and agent brand business development have had a certain degree of adverse impact. In addition, in the first half of this year, the company's own brand focused on upgrading the new, resulting in brand positioning, design and other costs increased. A large number of launching new products led to a sharp increase in research and development costs, so the company's profits were affected. Prior to this, the investment in R&D of S'Young was on a declining trend. Data show that from 2018 to 2021, the R&D expense ratio of S'Young was 2.05%, 1.82%, 1.28%, and 1.32%. However, in the first half of 2022, the R&D expense ratio of S'Young shares rose back to 1.95%. In early August this year, the S'Young disclosed to the public that its continued investment of up to $207 million S'Young Smart Base has been launched into production. The base is a collection of research and development, design, production, logistics, and so on. Its annual output value is expected to be nearly $591 million. As a beauty group, the mask was once the most important sales category for S'Young. Its reliance on the patch mask category gradually decreased as the company gradually expanded into multiple categories such as lotion, cream, color cosmetics, and personal care. From 2018 to 2021, the revenue share of the patch mask category was 55.19%, 37.31%, 25.56%, and 17.87%. In the first half of 2022, this proportion decreases to 13.4%. Correspondingly, the revenue share of the category of lotion, cream, and non-patch mask has increased from 37.46% and 5.45% in 2018 to 74.56% and 35.42% in the first half of 2022, respectively. At the same time, the revenue growth rate of the lotion category is also faster than the patch mask. The data show that in the first half of 2022, the patch mask of S'Young revenue decreased by 28.69% year-on-year while lotion category revenue increased by 50.23% year-on-year. Some analysts said that the decrease in revenue of the patch mask category may be due to the intensification of competition in the beauty industry and the weakening of the traffic dividend of e-commerce platforms. To make up for the company's shortcomings in the independent high-end brands, in July this year, S'Young acquired the French high-luxury anti-aging brand EviDenS de Beauté. It completed the investment in the French light luxury brand PierAuge and the acquisition of its Chinese business. Among them, EviDenS de Beauté, which was acquired for $45.5 million, was its exclusive partner when it entered China in 2019. Its sales in China grew by more than 700% in 2020. S'Young shares also said in the investor relations activity record form that EviDenS de Beauté can work hard to maintain a reasonable profit structure while EviDenS de Beauté can actually maintain a better profit structure and is expected to have better contribution expectations next year. Minsheng Securities, one of the earliest established securities companies in China, analyzed that the acquisition of EviDenS de Beauté, which enjoys more profitability, will fill the gap in the company's high-end market. It is expected to increase the company's profits while also empowering the company with high-end offline channels.

Abstract: Reward Group, one of the top 500 private enterprises in China, terminated the reorganization process and declared bankruptcy of Reward Group. Reward Group is mainly engaged in daily chemicals, food, and so on. On August 15, Reward Group announced that on August 12, Beijing Chaoyang District People's Court issued an announcement that the court ruled to terminate the reorganization process of Reward Group Company and declare Reward Group Company bankrupt because the Company's Draft Reorganization Plan was not approved by the creditors' meeting. According to CHAILEEDO, in 2019, Reward Group applied to the court for bankruptcy reorganization on the grounds of its inability to settle its debts as they fall due and its apparent lack of solvency. The bankruptcy reorganization involved two wholly-owned subsidiaries of Reward Group: Suvow and Reward Home Care Chemical. Reward Group was one of the top 500 private manufacturing companies in China and had acquired 80% of the shares of Panrosa in the United States and 77.34% of Le Chatelard in France to expand its daily chemical business. The balance sheet submitted by Reward Group shows that as of December 31, 2018, Reward Group had total assets of 11.2 billion yuan(about $1.6 billion) and total liabilities of 6.1 billion yuan(about $898 million). Suvow had total assets of 3.3 billion yuan(about $486 million) and total liabilities of 2 billion yuan(about $294 million). Reward Daily Chemical had total assets of 1.46 billion yuan(about $215 million) and total liabilities of 1.05 billion yuan(about $155 million). Although the company's book assets are greater than its liabilities, the company's monetary funds are seriously insufficient. By the end of 2018, the three companies' monetary funds total about 477 million yuan(about $70.2 million). Some of the funds as a bank loan deposit can not be drawn, the remaining assets are difficult to realize, or a short period of time to realize the value will be significantly depreciated. Thus it was unable to settle the debt due. It is reported that Reward laundry detergent powder and laundry detergent are the most competitive products of Reward Daily Chemical, which has 7 brands. "Since 2014, Reward's daily chemical products have shown a fluctuating trend of decline in both sales revenue and profit." Brand marketing experts said that the strategy of Reward Group is to occupy the two product categories of home cleansing and personal care and complete full coverage of the high-middle-and-low market. However, Jiangsu Reward Home Care Chemical's financial report shows that from 2014 to the first half of 2017, the company's revenue was 10.27 million yuan(about $1.51 million), 47.03 million yuan(about $6.9 million), 100.1 million yuan(about $14.7 million) and 19.61 million yuan(about $2.89 million). The net profit was -950,000 yuan, 3.64 million yuan, 3.51 million yuan, and 560,000 yuan accordingly, with the growth rate of revenue and net profit showing a significant decline since 2015. The reason for the decline is partly due to the serious squeeze of first-line brands such as Blue Moon and Lipai, as well as the fact that in addition to the early soap powder, there has not been a large single product that can be replaced. For the reason for Reward Group's bankruptcy, CHAILEEDO found that part of the reason was over-expansion. In order to promote the group's rapid growth, Reward Group also made large-scale mergers and acquisitions abroad, adding 11 new subsidiaries. "In these large-scale investments and acquisitions, Reward Group could only raise funds by issuing multiple bonds used to meet investment needs with repayment of bank debts." A securities researcher analysis said. In addition, Reward Group's bankruptcy may be related to bond defaults. In 2017, the company was exposed to default on a short-term financing bond. Since then, Reward Group has had several bond defaults. Up to now, the company has seven in default, with a total of 4.75 billion yuan(about $699 million) of defaulted principal. It is worth noting that in the announcement of Reward Group, the administrator will sort out the outstanding contracts as soon as possible. If they meet the statutory conditions, the administrator will apply for permission to continue to perform in accordance with the law. At present, Reward Group's official flagship stores on a number of e-commerce platforms are operating normally. The types of products include laundry cleaning and other daily chemical products.

Abstract: Xie Fuchun’s revenue in the first half of 2022 was 9.5491 million yuan ($1.3934 million), with a net loss of 6.6893 million yuan ($976,100), down 421.49% year-on-year. On August 22, Xie Fuchun announced the 2022 interim financial report. In the first half of the year, Xie recorded only 9.5491 million yuan ($1.3934 million) in revenue, down 54.51% year-on-year; gross profit margin was 56.51%, down 12.16% year-on-year.​ The net loss was 6.6893 million yuan ($976,100), down 421.49% year-on-year. In terms of net profit, the overall decline in the first half of 2022 was more than 400%, even reaching the total loss of last year. For this record, Xie Fuchun said that the main reason is that the tourism market continues to be depressed due to the pandemic, and the operating revenue declines significantly. The operating cost decreases with the decline of the operating revenue. However, due to the influence of promotional activities, the operating cost decreases by 44.53%, which is less than the decline of the operating revenue. At the same time, administrative expenses are mainly fixed expenses of the company, so they did not decrease with the decline of operating revenue but increased over the same period of last year. Before the outbreak of the pandemic, some century-old strategies used by Xie Fuchun, Kong Fengchun and Dai Chunlin worked well. From 2017 to 2021, Xie Fuchun’s revenue reached 65.04 million yuan ($9.4903 million), 62.98 million yuan ($9.1897 million), 64.77 million yuan ($9.4509 million), and 33.38 million yuan ($4.8706 million), 38.56 million yuan ($5.6265 million). According to the financial report, the revenue of Xie Fuchun in the first half of 2022 declined significantly. The main reason is the pandemic. The offline stores are set up in the main domestic tourist attractions. In the first half of the year, tourism routes in all provinces and cities did not return to normal, resulting in offline physical channel sales decreasing by 8.3841 million yuan ($1.22334 million), a decrease of 67.37%, making the "tourist bonus" supply chain directly missing. In addition to offline channels, in 2011, Xie Fuchun also kept up with e-commerce, opened an online sales model, and settled in the Tmall flagship store. So far, its flagship store has been open for 11 years and has 1.07 million fans. In online channels, including Xie Fu Chun Tmall flagship store and JD flagship store, its star product Oval-shape powder (in normal packaging and lacquer box), osmanthus head oil and color balm are priced at 198 yuan ($28.89), 38 yuan ($5.54) and 38 yuan ($5.54), the sales can reach more than 500 pieces per month. It can also be seen from the reviews that its consumer loyalty and repurchase rate are guaranteed. Secondly, the sales of its "modern cosmetic peptide series" is not as good as the star products, the monthly sales of a single product are about 100 pieces. It is worth mentioning that due to the pandemic, the logistics of online platform sales were blocked, resulting in product retention, order loss and customer order conversion decline. Meanwhile, the traffic of Tmall platform was significantly reduced, resulting in a decrease of 2.78 million yuan ($405,600 ) in online sales, down 37.41%. The reason why Xie Fuchun, who has deep brand culture, fails to shine in the beauty industry may be rooted in the serious lack of investment in research and development. Compared with 163 million yuan ($23.78 million) for Shanghai Jahwa and 76.5836 million yuan ($11.1747 million) for Proya in 2021, Xie's research and development expenses in 2021 were only 1.967,500 million yuan ($287,100). Insufficient investment in research and development also directly causes Xie Fuchun's lack of product power and innovation. Xie launched six new products in 2017, compared with only three in 2021, including a Soft perfume essential oil hair spray, a Deluxe gift box and Six Gold Powder. Among them, the Deluxe gift box is just a repackaging and upgrading of the original products. The other two products have less than 200 monthly sales on the Tmall flagship store. In fact, as an old local brand in China, Xie Fuchun has long been famous. In 1915, Xie Fuchun Oval-shape powder, and incense pieces won the silver award at the Panama World Competition in San Francisco, USA. The products were sold overseas, establishing the status of the international brand. In 2006, Xie Fuchun was recognized as one of the first batches of "Chinese Time-honored Brands" by China's Ministry of Commerce. Besides, Xie's incense, powder and oil production skills have been listed as intangible cultural heritage protection projects in Jiangsu Province, and have been applied for national intangible cultural heritage projects. Even if it has the advantage of a long history, it must "keep up with the internet trend with its classic". To achieve the sustainable development of the brand, it is also necessary to be innovative and expand sales channels to adapt to this transformative digital era.

Abstract: Japanese beauty instrument brand Ya-Man has officially announced recently popular Chinese variety show participation stars Hu Xing'er and Yu Wenwen as brand ambassadors. According to the latest financial report of Ya-Man, from May 1, 2021 to April 30, 2022, its net sales rose 11.8% to $299 million and profit attributable to owners of parent rose 49.9% to $40.8 million. According to CHAILEEDO, the variety show in which the brand invited its stars has become a hit in China in the past two years with 18.02 billion views on the topic of the show as of July 22, 2022 (China Standard Time). According to the research data, women aged 25-35 are the main audience of the variety show, which is highly compatible with the brand targeted audience of the beauty instrument brand Ya-Man. And in the past two years, the development of beauty instrument in China has skyrocketed. According to the "Baidu & JD Consumer Trend Insight Report in Chinese 618 Shopping Festival", the turnover of home beauty instruments in the RF category increased 500% year-on-year in this year's Chinese 618 Shopping Festival. At present, the retail market size of home beauty instruments has exceeded $1.48 billion and is growing rapidly at a double-digit rate every year. According to MarketIDX data, in 2021, the facial beauty instrument market showed a state of "volume down and price up" and the Chinese beauty instrument market began to develop in the high-end trend. This finding has also been verified on e-commerce platforms such as Tmall during the Chinese 618 Shopping Festival period in 2022 with mid- to high-end beauty instruments with an average price of more than $443.4, such as AMIRO and Flossom, all ranked the Top 10 of the sales list. At the same time, more and more new Chinese brands are entering this sector such as OGP, JOVS, etc. These actions also partly confirms the above views. It is worth noting that the international skincare brand Lancôme also announced its entry into the beauty instrument sector announced Lancôme new beauty instruments at the sixth VivaTech this year. It shows that Lancôme also tends to occupy a part of the market in China. Ya-Man was the first beauty instrument company to go public in Japan. It entered China in 2015 with the Chinese market becoming the focus of the group's layout. In May 5, 2020, the new BLOOM VR debuted in China while the Japanese mainland was only listed in the summer. In August of the same year, Ya-Man even joined with Japanese beauty giant Shiseido Group to announce a cooperation agreement. The two sides would jointly establish a joint venture company EFFECTIMCo. The joint venture would first focus on China targeting Chinese consumers who are interested in anti-aging and home beauty devices. The products will be available in Japan and China from 2021. Public data shows that the Ya-Men flagship store in Chinese e-commerce platform in Tmall has made over $14.78 million in sales on the Chinese Double 11 Shopping Festival for five consecutive years and is the only beauty instrument store to sell over $14.78 million during the promotion. In this year's Chinese 618 Shopping Festival, beauty instrument brands took three of the top 15 spots on the Tmall platform's beauty store sales ranking, namely Ulike, Ya-Men and Tripollar. In the financial report in 2021 of Ya-Men, the company specially stated that E-commerce sales in China, which use sales channels such as T-mall, were very strong. As a result, both sales and earnings were much higher than one year earlier as sales increased 123.7% year-on-year to 10,997 million yen and segment profit increased 84.7% year-on-year to 3,012 million yen. In the financial report in 2022(from May 1, 2021 to April 30, 2022), the company also showed that the Chinese domestic market was extremely buoyant in the fiscal year under review, both sales and earnings were much higher than one year earlier as sales increased 32.0% year-on-year to 14,522 million yen and segment profit increased 45.6% year-on-year to 4,385 million yen. For Ya-Man, this collaboration with two celebrities may bring more exposure to the brand and better resonate with the same target group thus further expanding the brand awareness. The collaboration aims to precisely target the brand's potential customer base, continue to strengthen consumer interaction, and promote the entry of Ya-Men into a broader public view.

Abstract: Chinese skincare brand BioMeso announced released a report on its performance on the Chinese 618 Shopping Festival: BioMeso Saccharomyces Rice Radiant Essential Toner ranked Top 1 on the list of the essence of Chinese brands with total multi-channel sales exceeding $17.9 million. According to CHAILEEDO, the product BioMeso Saccharomyces Rice Radiant Essential Toner is known and recognized by the public mainly because of the product's oil control effect. Its star ingredient - "saccharomyces rice fermentation essence", can endogenous directional inhibition of oil production. At the same time, it promotes hyaluronic acid synthase expression and significantly enhances the hyaluronic acid content. In addition, the product is also effective in soothing irritation, stabilizing the skin's underlying environment, and helping the skin to resist oxygenation and glycation damage. The product has already topped the same list for the Double 11(Chinese Shopping Carnival) in 2021 and promotions for Women's Day in 2022. In fact, in addition to the star single product BioMeso Saccharomyces Rice Radiant Essential Toner continues to lead the essence category of Chinese products, BioMeso also got good results in online channels such as JD and TikTok China in the Chinese 618 Shopping Festival of 2022 in Chinese brands. According to the official data of BioMeso, during the Chinese 618 Shopping Festival of 2022, the brand's official flagship store on the Chinese e-commerce platform Tmall saw a 187% year-on-year increase in GMV, 1,883% year-on-year sales increase in brand live streaming, and 489% year-on-year increase sales in member of the flagship store. The brand's store on another e-commerce platform JD (Bio-MESO JD Self-Employed Flagship Store) saw a 270% increase in GMV compared to last year. The brand was also ranked as the "Innovative Brands Top 3" during the period of the promotional campaign on JD. In the Vipshop(China’s Outlets), the YOY increase achieved 276%. The overall GMV of Bio-MESO on TikTok China increased by 1649.4% compared to last year. It is reported that BioMeso is a brand of Chinese hyaluronic acid giant Bloomage Biotech, which is committed to focusing on the two-dimensional research and development line of "skin-tailored active ingredients" and "targeted delivery control technology" taking the young people as the starting point. It specializes in scientific fermentation efficacy. The brand is dedicated to researching scientifically fermented, efficacious skin care products for women aged 18-35 in first- and second-tier cities as the main consumer group. The good performance of BioMeso during the 618 promotion this year is closely related to its precise products and marketing layout. On the one hand, BioMeso continues to adhere to the core strategy of Saccharomyces Rice Toner as a single product, the fermentation technology to empower product development and create a brand barrier and advantage. On the other hand, BioMeso insists on driving new products with star single products and taking mature and long-cycle single product "brown rice water" as the main line of strategy, improving the innovative Saccharomyces Rice category. It also opens a product matrix of multiple product lines. For example, the two new products under BioMeso, Saccharomyces Rice Balancing Oil Control Lotion and Balancing Oil Control Lotion, are also on the list of 618 promotion on Tmall, and both have been ranked in the top three of the Tmall Oil Control Lotion "Hot-Selling List". Among them, the Balancing Oil Control Lotion has been on the Top 1 of the Oil Control Lotion "repurchase list" for a week, and the product is the first time participated in the 618 promotion. BioMeso is a C-end brand of Bloomage Biotech, while the other C-end brands of Bloomage Biotech include Biohyalux, Quadha, and MedRepair. Biohyalux digs deep into the efficacy of hyaluronic acid and opens up a wide space for brand growth with the help of "hyaluronic acid + actives". It upgrades from intelligent hyaluronic acid to a technological skincare head brand. With the success of cream products such as facial creams and eye creams, Quadha's anti-aging brand image is in the leading position of Chinese products in the anti-aging sector and has started to compete with international brands. As a representative brand for the younger generation of sensitive skin repair, MedRepair is sought after by the Z generation of users. The "fermentation" and "control" technologies are the basis of the technological force, and BioMeso strives to create a brand new image of "more professional" + "more energetic " + "happier". In 2021, the revenue of brands from Bloomage Biotech is: Biohyalux gained $180 million, up 117.42% year-on-year. Quadha reached $145.8 million, up 150.19% year-on-year. MedRepair had $62.6 million, up 111.12% year-on-year and BioMeso achieved $64.8 million, up 286.21% year-on-year, which is the highest growth among the four brands. In 2022, in terms of products, BioMeso focused on the innovation of brand products and the expansion of the product matrix. In terms of brand image building, BioMeso also organized various public welfare activities, such as the portrait exhibition of female surfers on March 8 Women's Day and the "Fermentation for Youth" event on May 4 Youth Day, to get closer to young people and show the "more professional, more energetic and happier" brand image. The success of Bloomage Biotech strategy of "capturing the hearts and minds of consumers" is evident from the growth of different categories of BioMeso's products in this Chinese 618 Shopping Festival.

Hourglass, a high-end makeup brand owned by Unilever, opened its first counter in Hangzhou, China. In 2017, the brand officially entered the Chinese market and now covers both online and offline channels. Hourglass has official flagship stores in Tmall, Xiaohongshu, and Tik Tok China. It is worth noting that the brand entered Sephora, Sanya International Duty Free Shopping Complex, and Intime Department Store in 2022. In fact, the frequent moves of Hourglass also highlight Unilever's ambitions The recent data shows that the size of the Chinese makeup market reached $8.64 billion in 2020, an increase of nearly 61% compared to 2014. Such an impressive growth rate makes China an incremental market for many beauty giants to focus on makeup. CHAILEEDO notes that in recent years, multinational cosmetic groups such as L'Orea group, Shiseido, Estee Lauder, and Unilever have successfully introduced their makeup brands into China one after another, including 3CE, IT Cosmetics, Too Faced, Hourglass, and so on. On June 16, China Standard Time, Hourglass, the high-end makeup brand of Unilever, opened its first offline counter at Wulin Intime Department Store in Hangzhou, China. At the same time, to celebrate the launch of the store, Hourglass also joined hands with Intime Department Store to initiate promotional campaigns. According to the observation from Qeyes, the store's design is in line with the brand's product design. The store is designed in black and gold and decorated with simple line shapes. Besides, consumers can try on makeup in the store to make better purchasing decisions. Otherwise, Hourglass focuses on promoting five products, namely Hourglass Vanish Airbrush Concealer, Hourglass Veil Translucent Setting Powder, Hourglass Vanish Airbrush Primer, Hourglass Ambient Lighting Blush, and Hourglass Volumizing Glossy Stick. To attract more consumers, the brand joined hands with Intime Department Store, which is well-known in China, to launch a special promotion. Specifically, for the first four days of the opening, consumers will receive a RMB200 Beauty and Apparel Voucher for every RMB1,000 of Hourglass products purchased. In fact, the brand has been making a series of moves in the Chinese market since this year. At the end of January, Hourglass officially announced its exclusive presence in Sephora. In mid-April, the brand officially announced its exclusive presence in Sanya International Duty Free Shopping Complex. In addition to the above offline channels, Hourglass has also opened official flagship stores on three e-commerce platforms, namely Tmall, Xiaohongshu, and Tik Tok China. On the Tmall platform, for example, the brand's best-selling product Hourglass Vanish Airbrush Concealer (priced at $38.7) sells more than 4,000 units per month. CHAILEEDO found that Hourglass officially entered the Chinese market in 2017, shortly after it was acquired by Unilever. It was reported that this was Unilever's first attempt to enter the high-end makeup market. However, it is only in the last two years that the brand has gained popularity and considerable sales in China with its hero product, Hourglass Vanish Airbrush Concealer. This is mainly due to the cooperation with many Chinese KOLs, including the head anchor Li Jiaqi. Furthermore, Hourglass has also reached many young consumers by collaborating with well-known celebrities. And Qeyes learned that in April this year, the brand officially announced the Chinese star Bai Lu as its brand ambassador, who is one of the young actresses who have been gaining popularity in recent years. It is worth mentioning that in the first quarter of this year, Unilever Prestige saw double-digit growth, with Hourglass and Living Proof performing particularly well. Both brands were exclusively launched in Sephora in January this year. There are 9 brands attached to the division, including the British skincare brand REN, the U.S. skincare brand Dermalogica, the high-end skincare brand Kate Somerville, the U.S. skincare brand Murad, the hair care brand Living Proof, the high-end makeup brand Hourglass, the French skincare brand Garancia, the skincare brand Tatcha and the skincare brand Paula's Choice. Last December, Unilever publicly stated that Unilever Prestige would build a business worth at least €3 billion over the next few years through digital channels, innovation, acquisitions and expansion, as one of the fastest growing divisions in the group's business. And China, Unilever's most important market for global growth, will also see the rise and fall of the premium beauty brands in the coming years.

Abstract: In 2021, 67.48% of cosmetic adverse reactions came from online products, and 64.5% of skin care products in Wuhan.

Abstract: Cosmetics wholesaler Baoxin Warehouse was fined 5,000 yuan ($736.21) for tax avoidance, and tax compliance may become the general trend.

Following the establishment of a legal person in Tokyo in March 2021, COSMAX, a Korean professional cosmetics OEM and ODM company, has established a factory in Japan with a planned construction area of 16,000 square meters. It is worth mentioning that COSMAX currently has 2 factories and logistics centers in Shanghai, China (the second factory is under construction), and 1 factory in Guangzhou. On June 6, BST (all times in this article are Beijing time), the site selection of the Japanese branch of COSMAX Group, a Korean professional cosmetics OEM and ODM company, was also officially signed. The construction area is 16,000 square meters. It is expected to start construction in the first half of next year and put into use in 2025. Founded in 1992, COSMAX has branches and factories in South Korea, China, Indonesia, the United States, Japan, and other countries around the world. It researches and develops cosmetics products for the world's largest cosmetics group L'Oreal, Amorepacific, LG Life and Health, and other cosmetics brands. COSMAX has been established for 30 years and has been rooted in China for 18 years. Today, China is the second largest cosmetics consumer market in the world, and the Chinese market has become the most important overseas market for COSMAX. According to the official website of COSMAX (China), COSMAX currently has 2 factories and logistics centers in Shanghai (the second factory is under construction), and 1 factory in Guangzhou. In October 2021, the monthly output of the COSMAX Shanghai factory exceeded 50 million pieces. Together with the Guangzhou factory, the monthly output has approached 70 million pieces, setting a record for the highest monthly output of the COSMAX Group. In addition, in these factories, COSMAX has established R&D centers respectively. The R&D center of COSMAX is mainly divided into the R&D department of skin care products and the R&D department of make-up products, which are responsible for the research and development of new formulations and dosage forms of skin care and make-up products respectively. In addition, with the ability to control market trends and respond quickly, COSMAX has also built a powerful formula library that covers most of the popular products on the market. Taking 2021 as an example, COSMAX’s new formulas will reach 15,000; in the 2021 618 makeup promotion list, almost all lip glaze product formulas come from the COSMAX R&D center. 2021 is also a year of rapid growth for COSMAX, and the growth of its sales is mainly due to the strong sales in the Korean market and the Chinese market, which in turn also drives the growth of operating profit. According to the financial report, in 2021, COSMAX achieved record sales of approximately $1.273 billion, a year-on-year increase of 15.1%; operating profit was approximately $98 million, an increase of 84% year-on-year; net profit was approximately $27 million, a year-on-year increase of 218%. During the reporting period, the sales of COSMAX (China) Cosmetics Co., Ltd. were approximately $407 million, a year-on-year increase of 50%; the sales of Guangzhou COSMAX Co., Ltd. were approximately $112 million, a year-on-year increase of 9.55%. The total revenue of the two companies accounts for 40.8% of the group's total annual revenue, which shows the importance of the Chinese market to COSMAX. It is worth mentioning that at the end of last year, COSMAX also established the Asian Foundation Research Institute in Shanghai with MISTINE, a professional sunscreen brand in Thailand. It is reported that the institute is the first professional base makeup research institute customized for Asian women based on the skin of Asian women, and is committed to creating makeup products that are more suitable for Asian women.

Abstract: On July 30, the foundation of the global innovation R&D and industrial center of Yige group, the parent company of FLORASIS, was officially laid. The center integrates five innovative R&D functions to help Yige group enhance its R&D strength.

Abstract: Recently, NBC's parent company, Green Pine, released a preview of its first half of 2022 results, with net profit declining by up to 194.12%. The main business of Green Pine is turpentine processing and cosmetic ODM business. The main reason for the decline is the company's cosmetics business sales revenue decline, etc. In fact, this is not the first time that Green Pine has lost money. In the first half of this year, Green Pines released its 2021 results report. According to the report, last year the company achieved operating revenue of $547 million, down 4.44% year-on-year. Its net profit attributable to shareholders of the listed company was -$135 million, down 297.85% year-on-year. The loss was attributed to an impairment provision of $135.2 million for goodwill formed on the acquisition of cosmetics ODM company NBC. CHAILEEDO learned that, due to the volatile performance, shortly after the release of the 2021 annual report of Green Pine, the Shenzhen Stock Exchange issued an inquiry letter to it asking Green Pine to explain the specific reasons for the decline in revenue last year by product type. It also required Green Pine to explain whether the decline in the company's revenue trend is sustainable taking into account the actual operation of the main business, the development situation of the industry and the acquisition of orders and the first quarter of 2022. On May 20, Green Pine issued an announcement in response. According to the announcement, the enterprise's wholly-owned subsidiary cosmetic ODM NBC's performance decline last year was related to both the company's internal strategy of capacity expansion and staff expansion. It was also affected by macro factors such as rising raw materials, epidemic and industry regulation. These reasons, Green Pine in the previous financial report has been stated. It is understood that Green Pine was listed on October 26, 2010. After the listing, Green Pine shares were mainly engaged in product development, production and sales business in the turpentine deep processing industry for a long time. After Green Pine completed the acquisition of 90% shares of NBC in April 2019, Green Pine added the design, development and manufacturing business of cosmetics such as facial mask, skincare products and wet wipes to its business segment. So far, the main business of Green Pine revolves around the above two segments. As a wholly-owned subsidiary of Green Pine, NBC is mainly engaged in the cosmetic ODM business, which, according to the official statement, is one of the largest local integrated cosmetic manufacturers in China in 2021 with downstream customers mainly being cosmetic brand owners. Its main customers are UNIFON, Watsons, Hanhoo, Sewame, Dr. Plant and so on. Among them, the number of ODM products of UNIFON accounts for 25.63% of the overall, while Watsons accounts for 21.82% and Hanhoo and many other brands have their share. Last year, NBC revenue achieved $371.6 million, down 6.05% and its operating profit -$9.8 million, down 119.89% with loss of $8.1 million. More attention is paid to the fact that Green Pine announced the top five customers of NBC from 2018 to 2021 as required by the inquiry letter. Overall, NBC's top five customers are more stable, for example, Dr. Plant has been a top five customer for four years, Watsons, ReckittBenckiser and YSG for three years. The annual sales amount of the top five customers fluctuates is in the range of $117-$137.9 million and the closing book balance of accounts receivable fluctuates in the range of $33-$46 million. It is worth noting that the first half of 2022 of Green Pine is still in the loss. According to the financial report, the company is expected to have a net profit attributable to shareholders of the listed company of $19 million to $25 million in the first half of 2022. Compared with a net profit attributable to the parent company of $26.7 million in the same period last year, a decline of 171.97% to 194.12%. In terms of operating income, it is expected to record $200 million to $215 million, a decline of 24.11% to 29.34% year-on-year. Among the cosmetic business, Green Pine explained that due to the epidemic, macroeconomic factors and industry regulatory policies, the total retail sales of cosmetics in China declined year-on-year. The sales revenue of the company's cosmetics business dropped year-on-year. At the same time, the cosmetic production line renovation and expansion projects were completed and put into operation. The related depreciation and amortization expenses were increased, coupled with the increase in raw material prices in the past two years. The above factors posed a greater adverse impact on product gross margin when sales revenue failed to achieve growth.

Abstract: On July 28, AMORE PACIFIC announced that its sales volume in the first half of 2022 was US$1.623 billion, a year-on-year decrease of 14.9%, and its operating profit was US$0.123 billion, a year-on-year decrease of 46.9%. According to CHAILEEDO, AMORE PACIFIC recently disclosed its performance for the first half of 2022. Due to the lockdown of major cities in China to stop the spread of Covid-19, AMORE PACIFIC’s overall performance declined as a result of poor performance in the second quarter. Operating profit in the first half of the year fell by 46.9% year-on-year. In January this year, Innisfree, a subsidiary of AMORE PACIFIC, was reported to have“lots of shops closed”in the Chinese market. There were more than 600 stores closed, with over 80% ofshopswereshutdown. In February, HERA, another Korean makeup brand under AMORE PACIFIC, announced that it has closed offline counters in China successively and planned to close its online WeChat store in mid-March this year. According to the financial report of AMORE PACIFIC, the revenue of Hera’s offline stores dropped by 29.4% in 2021. At the same time, AMORE PACIFIC raised the prices of its products after a large-scale closure of its makeup brand Innisfree. In addition, the epidemic blockade and the strong occupation of European and American brands in the Chinese market are a big blow to AMORE. In recent years, the market share of Korean skin care products is not large in China, and the European and American skin care products have occupied the main market of China's skincare products industry. According to the Tmall list, the top five sales rankings of 618 beauty stores in 2022 are L'Oreal, Estee Lauder, Lancome, OLAY, and ULIKE. Korean brands are not even shown in the top 20 list. At present, South Korean companies that mainly occupy the Chinese skincare market are LG Group and AMORE PACIFIC. However, compared with European and American skincare companies such as L'Oreal, Estee Lauder, and Procter & Gamble, there is still a certain gap. It seems that in the mid-to-low-end market, the rise of Chinese beauty brands has also affected the performance of LG Group and AMORE PACIFIC. In the past, Korean beauty brands dominated the mid-end market, and consumers generally believed that Korean brands were higher-end than local brands while the quality was often more affordable than imported products from Japan, Europe, or the United States. For example, Chinese cosmetic brands such as Huaxizi adn Perfect Diary were all unveiled around 2018. Through the fast product updates and low prices, they became famous among the post-95-generation consumers. The Domestic Product Insight Report shows that Chinese brands occupy 56% of the market share, and 42% of consumers are more willing to choose Chinese beauty brands. In addition, 90% of consumers who have purchased Chinese brand cosmetics said they would buy them in the future. According to Magic Mirror data, from May 26 to June 10 on Tmall, domestic skin care brands ranked 5th, 7th, and 10th in sales, with year-on-year growth of 121%, 36%, and 166% respectively; domestic make-up brands ranked respectively 3rd, 6th and 9th in sales. The dilemma faced by AMORE PACIFIC is also something that a considerable number of overseas companies need to face. The vital problem behind the decline of beauty brands is that whether the brands are "expensive" or "cheap", Korean brands or European and American niche brands, those beauty brands that long-term rely too much on marketing, ignore functionality, devoid of good brands stories and lack of updates cannot survive this round of market reshuffle. The Chinese market just responds faster to new changes.