Established in 2001, Chando Global Holding Limited has built its reputation on the iconic tagline "You Are Born Beautiful." As a veteran Chinese skincare brand with 24 years of history, Chando maintains strong brand recognition but faces multiple challenges, including delayed IPO plans and over 90% revenue dependency on its core brand.
The company recently submitted its Hong Kong IPO application, with Huatai International and UBS as joint sponsors. Its disclosed financials reveal concerning trends:
1. **Overconcentration Risk & Profit Decline** Chando operates five cosmetic brands, but its flagship "Chando" contributed 94.6%-95.9% of total revenue from 2022 to H1 2025. Other brands collectively accounted for less than 5% during the same period.
The company reported: - 2024 revenue: RMB4.69 billion (+3.6% YoY) - 2024 net profit: RMB190 million (-37.09% YoY) - Gross margin expanded from 66.5% (2022) to 70.1% (H1 2025) - Net profit margin fluctuated between 3.2%-7.8%
Among listed peers, Chando ranked 7th by 2024 revenue (RMB4.66 billion), trailing market leaders like Proya (RMB10.78 billion) and Shanghai Jahwa (RMB6.79 billion).
2. **Heavy Marketing Spend vs Declining R&D** Key expense ratios: - Sales & marketing costs: 55%-59% of revenue - R&D expenditure: Dropped from 2.8% (2022) to 1.7% (H1 2025) of revenue - Administrative expenses: Stable at ~4%
The company employs 2,102 full-time staff, with 49.1% in sales/marketing versus only 7.3% in R&D.
3. **Operational Challenges** Working capital metrics showed mixed trends: - Inventory days improved from 146.6 (2022) to 103.1 (H1 2025) - Trade receivables days remained under 13 days - Trade payables hovered around RMB0.9-1.06 billion - Operating cash flow turned positive after 2022's RMB295 million outflow
Liquidity ratios stayed stable with current ratio at 1.0 and quick ratio at 0.7 as of H1 2025. Cash reserves grew to RMB931 million by mid-2025.
The controlling Zheng family holds 87.82% voting rights. IPO proceeds will fund DTC expansion, multi-brand development, overseas growth, and digital transformation.
Consumer complaints (605 recorded on Hei Mao platform) primarily cite service quality, refund issues, and product claims. The company's ability to balance marketing efficiency with product innovation will be critical for its post-IPO performance.