CHANDO makes another push for Hong Kong listing, but the capital market is reluctant to offer a 'sentiment premium'

In April 2026, Chando resubmitted its listing application to the Hong Kong Stock Exchange, which was half a year after its initial filing in September 2025.

The halo and shadow of peers

Currently, the Hong Kong-listed cosmetics sector has gathered multiple forces: $CHICMAX (02145.HK)$ ——The parent company of Hanshu went public on the Hong Kong Stock Exchange as early as the end of 2022; Giant Biogene, which focuses on biotech skincare, $GIANT BIOGENE (02367.HK)$ listed in November 2022; the high-end makeup brand $MAO GEPING (01318.HK)$ was listed at the end of 2024; the premium plant-based skincare brand $FOREST CABIN (02657.HK)$ also went public at the end of 2025. In addition, industry leaders in the A-share market, such as Perfection (603605.SH) and Marubi Biological (603983.SH), are planning to list in Hong Kong. This means that Chando not only faces competition from already-listed companies but also must deal with potential new giants entering the market.

However, the 'honeymoon period' of the Hong Kong stock market seems to be fading. Looking back at the performance since each company's IPO, although Giant Biogene, Mao Geping, and others achieved decent gains during their initial listing periods, market sentiment has clearly turned cold by 2026. Data shows that since the beginning of this year, Giant Biogene's share price has dropped more than 32%, while Lin Qingxuan’s decline has reached as much as 36%. Even Mao Geping, known for its high-end positioning and strong resistance to declines, has seen a correction of over 10% this year, as shown in the table below.

When the overall enthusiasm of the consumer market cools down, the anti-cyclical nature of high-end positioning begins to emerge. With gross margins exceeding 84% and net profit margins close to 24%, Mao Geping provides some valuation support, maintaining a price-to-earnings ratio of over 25 times. On the other hand, brands relying on mass markets and marketing-driven growth are facing greater valuation pressure.

This is not a good omen for CHANDO.

The real situation behind the data

Flipping through CHANDO's prospectus and comparing it with listed peers, its performance may not inspire optimism.

In terms of revenue scale, CHANDO achieved revenue of 5.318 billion yuan (in RMB, same below) in 2025, compared with Giant Biogene's 5.519 billion yuan and Kans' 9.178 billion yuan, placing it in a mid-tier position. However, the issue lies in growth speed. In 2025, CHANDO’s revenue growth rate was only 15.60%, significantly lagging behind Kans' 35.12%, Mao Geping’s 30.01%, and far behind Forest Essence’s explosive growth of 102.50%. Even Giant Biogene, which experienced a slight decline in revenue, had a special business adjustment background for its negative growth.

More concerning is profitability. In 2025, CHANDO's gross profit margin was 70.65%, the lowest among comparable companies — Kans stood at 76.43%, Giant Biogene at 80.34%, Forest Essence at 82.01%, and Mao Geping reached an impressive 84.22%. Meanwhile, two A-share companies planning to list in Hong Kong (based on the 12 months ending September 2025, same below), Perfection and Marubi, also reported gross profit margins of 73.73% and 73.80%, respectively, both higher than CHANDO.

The gap in gross profit margin directly impacts net profit. Coupled with rigid marketing expenses, CHANDO's adjusted net profit margin in 2025 was only 7.76%, with adjusted net profit at 413 million yuan. By comparison, Kans’ net profit margin was 12.01%, Mao Geping’s at 23.94%, and Giant Biogene achieved an astonishing 35.52%. Forest Essence’s net profit margin also reached 16.36%. The non-GAAP net profit margin of the two A-share companies for the 12 months ending September 2025 was also in double digits. In the competition of profitability, CHANDO almost ranked last in every metric.

Channels and production capacity: Robust self-owned infrastructure but weaker online competitiveness compared to leaders

Beyond financial metrics, channel structure and production capacity are core competencies for cosmetics companies. While CHANDO has a solid foundation in self-owned production capacity and omnichannel layout, its competitiveness in key online channels still lags behind leading peers.

In 2025, CHANDO's online channel revenue accounted for 69.49% of total revenue, with direct sales contributing 56.46% (of total revenue, same below). This structure aligns with the cosmetics industry trend of 'online dominance and direct sales priority,' but there is still room for improvement compared to peers.

Kans’ online channel accounted for an impressive 93.9%, with self-operated e-commerce making up 85.4%, nearly achieving full online channel coverage. Its channel efficiency and operational flexibility are significantly ahead. Forest Essence’s online share was 70.4%, with direct sales at 64.1%; Giant Biogene’s online share was 70.8%, with direct sales at 61.6% — both surpassing CHANDO in online direct sales. Mao Geping’s online share was 50.5%, with direct sales at 39.7%. Though its online share was lower, its premium positioning ensured stable profits from offline experience stores and membership systems, creating a more balanced channel structure.

Chando's online direct sales account for 56.46%, lower than that of Forest Cabin and Giant Biogene, indicating a higher reliance on third-party platforms and distributors, which further diverts channel profits. This is one of the reasons for its relatively low gross margin. Meanwhile, Chando has nearly 65,000 offline retail terminals. However, as traffic increasingly shifts online, the return on investment for offline channels continues to decline, failing to create effective synergy between online and offline operations.

Compared with its peers, Chando's core advantage lies in its fully integrated self-owned production capacity, a highlight emphasized in its IPO prospectus. The company operates a factory in Nyingchi, Tibet, focusing on plant extraction, cell tissue culture, and hot spring water treatment. Its Shanghai cosmetics factory handles finished product manufacturing, with Phase III having commenced operations in October 2025 to expand capacity. In August 2025, the Shanghai fermentation plant officially began operations, producing high-value active ingredients through advanced fermentation technology to strengthen upstream raw material capabilities and reduce dependence on externally sourced materials. Even after expanding its production capacity in 2025, utilization rates remained near saturation, with skincare, personal care, and makeup capacity utilization reaching 90.4%, 92.7%, and 85.3%, respectively. Part of the proceeds from this IPO will be allocated to operating and upgrading production facilities to address capacity shortages while reducing costs and improving gross margins through in-house raw material R&D to enhance profitability.

The path to breakthrough remains fraught with multiple uncertainties.

Chando’s Hong Kong IPO aims to raise funds across seven key areas, primarily focusing on DTC capability building, brand portfolio expansion, R&D investment, digital upgrades, capacity expansion, overseas growth, and working capital. While appearing to comprehensively cover corporate development needs, when considering industry conditions and internal weaknesses, its breakout strategy still faces significant challenges.

Chando's biggest pain point may lie in its lack of distinct differentiation advantages. In terms of brand positioning, its mass-market skincare approach overlaps significantly with companies like Usmile and Proya. Regarding product strength, it lacks the technical barriers in efficacy-driven skincare seen in Giant Biogene. On the premiumization front, it cannot compete with brands like Mao Geping or Forest Cabin. In its prospectus, Chando highlights the integration of 'Eastern aesthetics' and 'scientific skincare,' mentioning the uniqueness of Tibetan plant resources and its fermentation technology advancements. Whether these concepts can translate into tangible performance growth remains to be proven over time.

In 2026, Hong Kong's beauty sector is undergoing a valuation reset as the market shifts from 'supporting domestic brands out of sentiment' to 'focusing on profit quality.' Mao Geping enjoys a price-to-earnings ratio exceeding 25x due to its premium positioning and strong profitability. Despite its technological edge, Giant Biogene trades at only 14x earnings, while mass-market brands like Usmile and Forest Cabin benefit from revenue growth advantages, trading at P/E ratios between 15x and 20x. As a mass-market skincare brand, Chando ranks lowest in profit quality and lags in growth, making it unlikely to achieve high valuations even if listed successfully. Additionally, A-share players like Proya and Marubi are planning dual A+H listings in Hong Kong, which could further divert capital within the beauty sector and intensify valuation competition.

Moreover, the domestic beauty consumption market is highly competitive, especially in the mass-market skincare segment where Chando operates. Trapped in this fiercely contested space, it lacks both the pricing power of luxury brands and the flexibility of emerging labels. Growth heavily depends on high marketing spending, which in turn depresses profitability, raising doubts about future growth sustainability.

Chando’s current attempt to break through may not be an easy journey.

Author: Mao Ting

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