Proya posts Q1 revenue, profit decline as competition deepens

Chinese beauty powerhouse Proya (珀莱雅) reported a weaker first quarter on April 21, with both revenue and profit declining as competition for market share inside China’s growing beauty sector intensifies. According to the company's Q1 2026 financial report, Proya posted operating revenue of 2.305 billion RMB ($338 million), a year-on-year decrease of 2.29%. Net profit attributable to shareholders came in at 367 million RMB ($54 million), down 6.05% YoY. Net profit excluding non-recurring items fell more sharply, declining 9.97% to 341 million RMB ($50 million). The company's gross profit margin stood at 74.53%, with a debt ratio of 26.52%. The cash flow picture adds further texture to Proya’s Q1 challenge. Operating cash flow fell 84.16% YoY to 106.97 million RMB ($15.7 million), down from 675.49 million RMB ($99 million) in the same period last year — a sharper deterioration than the headline revenue or profit figures suggest. The company attributed the decline to slower collection of receivables and increased promotional spending. That promotional push is visible in the income statement: sales and marketing expenditure rose nearly 9% YoY to 1.171 billion RMB ($172 million), even as revenue contracted — a ratio that crystallizes the core tension facing established players in China’s beauty sector. Accounts receivable also surged nearly fivefold from 70.15 million RMB ($10.3 million) at year-end 2025 to 315.33 million RMB ($46.2 million) by the close of Q1, pointing to extended payment terms or delayed collections across its distribution network. The results come despite a buoyant market backdrop. China’s cosmetics retail sales reached a record 75.3 billion RMB ($10.93 billion) in the first two months of 2026, up 4.5% year-on-year, according to official data reported by Jing Daily. Within that growth, however, competition for market share is intensifying: consumers are increasingly prioritizing ingredients and value, squeezing players across price tiers, while Chinese brands are also expanding aggressively into export markets — with overseas cosmetics exports rising 9.2% to $7.82 billion in 2025, their fifth consecutive year of growth. Inside Proya’s R&D push: Labs, AI, and synthetic biology It is against that backdrop that Proya has been steadily increasing its research and development spending. The company’s R&D expenditure as a percentage of revenue has climbed from 1.65% in 2021 to approximately 2.5% — a figure Proya says is significantly above the industry average, according to Peninsula.com. That investment has produced tangible recognition. In 2025, Proya won the IFSCC (International Federation of Societies of Cosmetic Chemists) Top Ten Basic Research Award for its work on mitochondrial anti-aging, conducted in partnership with Zhejiang University’s School of Pharmaceutical Sciences — the best result achieved by a Chinese company in that global competition to date, according to the company. From Hangzhou to Paris: How Proya is building its innovation edge Proya’s R&D infrastructure spans three locations: a Hangzhou Longwu R&D Center, a Shanghai R&D Center, and a European Science and Technology Innovation Center in Paris. The company has also established joint laboratories with West China Hospital of Sichuan University and Shanghai Skin Disease Hospital, and says it is integrating artificial intelligence and synthetic biology into ingredient screening and formulation development. Despite the Q1 softness, Proya stock closed up 0.33% at 60.35 RMB ($8.86) on April 21. The stock has received buy or overweight ratings from all nine institutions that have covered it over the past 90 days, with an average target price of 89.08 RMB ($13.08), according to Securities Star.

Proya posts Q1 revenue, profit decline as competition deepens

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Proya posts Q1 revenue, profit decline as competition deepens

How Bottega Veneta weaved China’s forever it bag