Behind Mao Geping’s meteoric rise, key risks loom

For more China-focused finance coverage, subscribe to the Jing Finance newsletter for the latest news, business updates, global analysis, and trends shaping financial markets. What happened China’s high-end beauty champion Mao Geping has posted stellar results in its first full-year financial report since going public. The company reported revenue of 3.9 billion RMB ($537 million) in 2024, up 34.6% year-on-year, while net profit surged 32.8% to 881 million RMB ($121.4 million). Mao Geping’s rise has been meteoric. Since 2021, the company’s revenue has more than doubled, expanding at a compound annual growth rate (CAGR) of 35%. Its net profit has followed a similar trajectory, climbing at a CAGR of 38.5%. The brand’s extensive offline presence — spanning 120 cities with 378 self-operated and 31 distributor counters — remains a cornerstone of its strategy, reinforcing its luxury positioning and personalized customer service model. Repeat purchases are also on the rise, climbing from 26.8% in 2023 to 30.9% in 2024, indicating strong consumer loyalty. However, the company’s financials also flag key risks: sales costs jumped 54.8% to 1.9 billion RMB ($262 million), now accounting for 49% of total revenue, while logistics expenses soared 56.5%, largely due to aggressive e-commerce expansion. The Jing Take Investor sentiment remains mixed. Mao Geping’s stock closed at HK$113.9 ($14.56) on March 27, with a market capitalization of HK$55.83 billion ($7.14 billion), making it China’s second most valuable beauty company. Yet, concerns about dilution loom as the company announced plans to convert 228 million unlisted shares into H-shares, potentially increasing its float by 87%. While the move enhances liquidity and offers an exit path for early investors, it also raises the risk of near-term selling pressure. Looking ahead, analysts remain bullish. Dongwu Securities highlighted Mao Geping’s ability to drive premiumization in China’s beauty sector, while Guohai Securities initiated coverage with a “Buy” rating, citing the brand’s expansion across both cosmetics and skincare. Mao Geping expands skincare and launch fragrance Mao Geping’s product matrix continues to grow, with over 100 new or upgraded SKUs in 2024, further strengthening its market positioning. The brand has also doubled down on skincare, with its skincare segment reaching 1.43 billion RMB ($197 million) in revenue, up 23.2% YoY. Skincare now accounts for 36.8% of total sales. In addition to its core cosmetics and skincare businesses, Mao Geping has made its first foray into fragrance. In early 2025, the company introduced its Gu Yun Ning Xiang perfume line, featuring three scents inspired by traditional Chinese aesthetics — iris, rose, and peony. Priced at 1,010 RMB ($140) for 110ml, the collection signals Mao Geping’s ambition to expand into China’s luxury fragrance market, where domestic brands are still catching up with global powerhouses. Despite its rapid ascent, challenges remain. The company’s reliance on its flagship Mao Geping brand — accounting for 99.3% of product sales — leaves it vulnerable to shifts in consumer preferences. Its secondary label, Zhiai Zhongsheng (至爱终生), remains a marginal player. Additionally, research and development spending remains below 1% of revenue, trailing competitors like Bloomage Biotech and Proya. While Mao Geping has solidified its dominance in China’s high-end beauty sector, investors and consumers alike will be watching closely to see if the brand can maintain its allure in an increasingly competitive landscape. The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

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Behind Mao Geping’s meteoric rise, key risks loom