HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Xiamen Yan Palace Bioengineering / Equity Capital Markets

<ul>
<li>From 2020 to 2022, Yan Palace has spent RMB831 million on advertising and promotion, while total net profit of the Company during the same period was only about RMB500 million.</li>
<li>OneNest is the main product with the highest gross margin, which is driven by price increase strategy.However, raising price may not work. Revenue growth in 2023H2/2024 could further slow down.</li>
<li>The question is are investors really satisfied with such low-margin business for a company with strong consumption attributes? Valuation of Yan Palace should be lower than <a href="https://www.smartkarma.com/entities/dong-e-e-jiaoco-ltd-a" target="_blank" data-smartkarma-citation="entities:8470:1" rel="noopener">Dong E E Jiao</a>.</li>
</ul>


From 2020 to 2022, Yan Palace has spent RMB831 million on advertising and promotion, while total net profit of the Company during the same period was only about RMB500 million.
OneNest is the main product with the highest gross margin, which is driven by price increase strategy.However, raising price may not work. Revenue growth in 2023H2/2024 could further slow down.
The question is are investors really satisfied with such low-margin business for a company with strong consumption attributes? Valuation of Yan Palace should be lower than Dong E E Jiao.


Pre-IPO Xiamen Yan Palace Bioengineering (PHIP Updates) - Some Points Worth the Attention

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Honasa Consumer  / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/honasa-consumer-ltd" target="_blank" data-smartkarma-citation="entities:36117:1" rel="noopener">Honasa Consumer (Honasa IN)</a> raised about US$200m in its India IPO.</li>
<li>HC’s product portfolio includes products in the baby care, face care, body care, hair care, color cosmetics and fragrances segments.</li>
<li>In our previous note, we looked at the company’s past performance and valuations. In this note, we talk about the trading dynamics.</li>
</ul>



Honasa Consumer (Honasa IN) raised about US$200m in its India IPO.
HC’s product portfolio includes products in the baby care, face care, body care, hair care, color cosmetics and fragrances segments.
In our previous note, we looked at the company’s past performance and valuations. In this note, we talk about the trading dynamics.


Honasa Consumer IPO Trading - Great Anchor Book, Not so Great Overall Demand. Loved by FIIs

<ul>
<li>
<a href="https://www.smartkarma.com/entities/honasa-consumer" target="_blank" data-smartkarma-citation="entities:36117:1" rel="noopener">Honasa Consumer</a> is looking to raise about US$200m in its upcoming India IPO.</li>
<li>HC’s product portfolio includes products in the baby care, face care, body care, hair care, color cosmetics and fragrances segments.</li>
<li>In our previous note, we looked at the company’s past performance. In this note, we talk about the RHP updates and valuations.</li>
</ul>



Honasa Consumer is looking to raise about US$200m in its upcoming India IPO.
HC’s product portfolio includes products in the baby care, face care, body care, hair care, color cosmetics and fragrances segments.
In our previous note, we looked at the company’s past performance. In this note, we talk about the RHP updates and valuations.


Honasa Consumer IPO - Thoughts on Valuations

<ul>
<li>
<a href="https://www.smartkarma.com/entities/honasa-consumer" target="_blank" data-smartkarma-citation="entities:36117:1" rel="noopener">Honasa Consumer </a>(HC) is looking to raise about US$200m in its upcoming India IPO.</li>
<li>HC’s product portfolio includes products in the baby care, face care, body care, hair care, color cosmetics and fragrances segments.</li>
<li>In our previous note, we looked at the company’s past performance. In this note, we talk about the RHP updates and valuations.</li>
</ul>



Honasa Consumer (HC) is looking to raise about US$200m in its upcoming India IPO.
HC’s product portfolio includes products in the baby care, face care, body care, hair care, color cosmetics and fragrances segments.
In our previous note, we looked at the company’s past performance. In this note, we talk about the RHP updates and valuations.


Honasa Consumer IPO - RHP Updates - Sales Strong, Slight Margin Improvement

<ul>
<li>Although Yan Palace prioritizes R&amp;D capabilities in prospectus, its revenue growth and business model are mainly relied on large investment in marketing/promotion.The root cause is the efficacy problem of EBN.</li>
<li>Whether Yan Palace's future performance growth can be sustained is a question mark if marketing/promotion cannot drive growth anymore. Net profit margin is low. EBN is not a profitable business.</li>
<li>Yan Palace's products do not have core competitiveness or high moat. Compliance risks are also worth being vigilant about. The valuation of Yan Palace should be lower than <a href="https://www.smartkarma.com/entities/giant-biogene-holding-co-ltd" target="_blank" data-smartkarma-citation="entities:35950:1" rel="noopener">Giant Biogene</a>.</li>
</ul>


Although Yan Palace prioritizes R&amp;D capabilities in prospectus, its revenue growth and business model are mainly relied on large investment in marketing/promotion.The root cause is the efficacy problem of EBN.
Whether Yan Palace's future performance growth can be sustained is a question mark if marketing/promotion cannot drive growth anymore. Net profit margin is low. EBN is not a profitable business.
Yan Palace's products do not have core competitiveness or high moat. Compliance risks are also worth being vigilant about. The valuation of Yan Palace should be lower than Giant Biogene.


Pre-IPO Xiamen Yan Palace Bioengineering - Concerns About Profitability and Growth Sustainability

China

Proya Cosmetics Co., Ltd. operates as a cosmetics products manufacturing company. The Company researches and markets skin care products, make up, body wash, and other related products. Proya Cosmetics markets its products throughout China.

Hengan International Group Company Limited, through its subsidiaries, manufactures and sells personal hygiene products such as sanitary napkins and disposable baby diapers in China.  The Company's products are sold under the Anerle brand name.

By-health Co., Ltd researches, develops, produces and sells dietary supplements. The Company's main products include protein powders, vitamins, minerals, natural herbal extracts and other functional nutritional supplements.

Shanghai Flyco Electrical Appliance Co., Ltd. develops, manufactures and sells personal care appliances. Main products include electric shavers and hairdryers.

Shanghai Flyco Electrical Appl (603868 CH)

Shanghai Jahwa United Co., Ltd. develops, manufactures and wholesales skin care and hair care products, cosmetics, perfumes, detergents, and other household chemical products.  The Company also provides technical and food services.

Brother Enterprises Holding Company Limited develops, produces and sells vitamin products and leather chemicals.  The Company's vitamin products include vitamin K3 and vitamin B1 series products. The Company's leather chemicals include chrome powder and leather auxiliaries series products.

Mingchen Health Co., Ltd. manufactures and markets personal healthcare products. The Company develops, produces, and sells skin and hair care products. Mingchen Health markets its products throughout China.

Henan Rebecca Hair Products Co., Ltd. manufactures wigs, fiber hair, and hair pieces used for hair styling, hair extension, and training purposes in beauty salons. The Company exports its products mainly to the United States and Europe.

Henan Rebecca Hair Products Co., (600439 CH)

Shanghai Jiaoda Onlly Co., Ltd. develops, manufactures, and markets biological products, healthcare food, ginseng products, and other nutritional supplements. Through its subsidiaries, the Company also provides advertising, medical, travel, and food services.

Liuzhou Liangmianzhen Co., Ltd. manufactures and markets oral hygiene products, cleaning products and feminine hygiene products. The company's main products include a variety of toothpaste with ingredients from traditional Chinese medicines. Liuzhou Liangmianzhen uses LMZ brand name.

Liuzhou Liangmianzhen Co, Ltd. (600249 CH)

Emami Limited develops and distributes personal, beauty, and healthcare products in India and other countries.  The Company manufactures herbal and Ayurvedic products, including antiseptic cream, prickly heat powder, pain balm, and cool oil.

LG H&H Co., Ltd. manufactures and distributes cosmetics. The Company produces whoo, o hui, sum 37, basic cosmetics, color cosmetics, and other related products. LG H&H also produces toothpaste, soap, detergents, healthy, personal care, and refreshing products.

Inter Parfums, Inc. manufactures, markets, and distributes a wide array of fragrances and fragrance related products. The Company's European-based operations produce and distribute prestige fragrance products primarily under license with brand owners. It's U.S.-based operations primarily produce and sell fragrance and personal care products under several specialty retail brands.

KOSE Corporation manufactures, retails, and exports cosmetics including make up, skin care, and hair care products.  The Company sells its products in Hong Kong, China, Singapore, and Malaysia.

Procter & Gamble Hygiene and Healthcare Limited manufactures personal & beauty care and healthcare products. The Company's products include menthol, dementholised peppermint oil, cosmetics, personal care products, toilet preparations, soaps and detergents.

Procter & Gamble Hygiene and Healthcare (PG IN)

Gillette India Ltd., a joint venture between Gillette Company, Inc. of the US and Poddar Group of India, manufactures personal grooming products, stationery products and small electrical appliances. The Company's products include twin type shaving systems, other razors, safety razor blades, disposable cartridge blades, shaving brushes and shaving creams.

KOBAYASHI PHARMACEUTICAL CO., LTD. manufactures and wholesales pharmaceuticals and medical equipment.  The Company also develops and manufactures fragrances, deodorant, sanitary products, and ointment for stiff shoulders, as well as exports to Southeast Asia and the US.

Interparfums SA creates and manufactures branded perfumes under license.  The Company creates perfumes for apparel, jewelry, and accessories manufacturers.

POLA ORBIS HOLDINGS INC. develops, manufactures and markets cosmetic products, centering in skincare  products. Under its multi-brand strategy, the Company holds nine cosmetic brands including POLA, prestige skincare brand, ORBIS, oil-free skincare brand, H2O PLUS and Jurlique.

FANCL CORPORATION produces and sells additive-free skin care cosmetics for both women and men.  The Company's products include cleansing creams, hair care goods such as shampoos and conditioners, and facial make up products.  Fancl also makes and distributes dietary supplements including royal jelly and various tablets with extracted essence from mushrooms, garlic, ginseng, and soy beans.

Giant Biogene Holding Co., Ltd researches, develops, manufactures, and distributes, and markets skin treatment products. The Company produces recombinant collagen and rare ginsenosides skin treatment products, functional foods, and other products. Giant Biogene Holding conducts businesses in China.

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Giant Biogene (2367 HK)

Pre-IPO Xiamen Yan Palace Bioengineering (PHIP Updates) - Some Points Worth the Attention

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Honasa Consumer (Honasa IN) raised about US$200m in its India IPO. In this note, we talk about the deal updates and the trading dynamics.

Sumeet Singh

Honasa Consumer IPO - Thoughts on Valuations

Honasa Consumer, a beauty and personal care company, is looking to raise about US$200m in its upcoming India IPO. In this note we talk about...

Sumeet Singh

Honasa Consumer IPO - RHP Updates - Sales Strong, Slight Margin Improvement

Honasa Consumer (HC) is looking to raise about US$200m in its upcoming India IPO. In this note, we talk about updates from its recent filings.

Sumeet Singh

Pre-IPO Xiamen Yan Palace Bioengineering - Concerns About Profitability and Growth Sustainability

Since the efficacy/actual value of EBN is questionable, marketing/promotion alone cannot drive future performance growth.Yan Palace's profit model...

Xinyao (Criss) Wang

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