After the close of trading on July 27th, SYoung Group (SZ: 300740), the parent company of Unifon, released its 2023 interim report. According to the report, the company’s revenue for the first half of the year increased by 4% year-on-year to 2.29 billion yuan, and its net profit attributable to shareholders rose by 72% year-on-year to 142 million yuan. SYoung Group experienced revenue growth recovery and a significant increase in net profit. In 2022, the company’s revenue had declined by 5.74% year-on-year to 4.72 billion yuan, and the net profit attributable to shareholders had dropped by 47.22% year-on-year to 125 million yuan.
As of the close on July 28th, the company’s stock price hit the daily limit (+20%) at 18.97 yuan per share, resulting in a market capitalization of approximately 7.4 billion yuan.
The company attributed the revenue growth recovery to several factors. Firstly, the multi-level brand matrix was further improved, and the product structure was continuously optimized. Additionally, effective cost and expense management contributed to the positive financial results. Moreover, the improvement in the product structure led to an enhancement in the gross profit level, which ultimately boosted the company’s overall profitability.
In recent years, SYoung Group has gradually established a business layout driven by both self-owned brands and agency brands. Under its self-owned brands, the company owns multiple labels, including Unifon, EVIDENS DE BEAUTÉ (also known as EDB), Mihoo, Big Drop, Yu MEN, Huayaohua, VAA, and HPH. These brands cover various product categories, such as face masks, moisturizers, cosmetics, and skincare products.
On the other hand, through its independent open platform SYoung International, established in 2018, the company collaborates with overseas beauty brands, providing them with market access, sales, and distribution solutions in China—a model often referred to as “China Partner“. The agency brands under SYoung International include renowned names like Japanese skincare brand Dr.Ci:Labo, anti-aging pioneer Neutrogena, haircare brand Rogaine, cosmetics brand KIKO, anti-aging skincare brand ZELENS from the UK, skincare brand Cellex-C, and professional skincare brand Mesolithic from Spain.
In the financial report, the self-owned brand structure is classified as 2+2+n, with Unifon and EDB forming the top tier, followed by Big Drop and Mihoo in the second tier, and newer brands like YuMEN, Huayaohua, VAA, and HPH constituting the third tier.
Notably, during recent investor interactions, SYoung Group expressed its vision for EDB to become one of the rising global luxury brands in the coming three to five years. The company emphasized that EDB would represent a globally-oriented, new luxury brand, extending beyond the boundaries of China and not limited to being just a beauty brand.
The agency segment is categorized as 1+5+n, where the company collaborates with Johnson & Johnson (J&J), and their cooperation is on a positive growth trajectory with steady performance. There are five major product categories: skincare, cosmetics, personal care, perfumes, and health foods, each featuring several representative brands.
During the reporting period, the company collaborated with international niche beauty brands like EDB, LUMENE, Pier Auge, and LORD&BERRY to launch the inaugural S’YOUNG Global Brand Festival. Furthermore, they steadily progressed with the establishment of Shuiyangtang, a global niche luxury beauty store, at Changsha IFS International Finance Center in September 2022.
In addition, during the first half of this year, the company’s research and development team moved into a new R&D building spanning over 20,000 square meters. The facility houses more than 20 specialized laboratories, including formula development, efficacy mechanism, plant tissue culture research, and molecular biology analysis labs. The financial report showed that the company’s R&D investment increased by 6.8% to 45.9 million yuan compared to the same period last year.
*Note: At time of writing, 1 RMB = 0.14 USD
| Source: Company Interim Report
| Image Credit: Company Interim Report, Official Brand Websites
| Editor: LeZhi
