{"text":[[{"start":11.13,"text":"This article only represents the author's own views."}],[{"start":15.13,"text":"Tech firms have become flavors of the day in Hong Kong’s recent stock market rally, with new listings often notching big post-IPO gains. The techy sounding Shenzhen HBN Technology (Group) Co. Ltd. recently threw its hat into that listing pool by submitting its Hong Kong IPO application last week. Yet this “technology”-flagged company is anything but that, operating squarely within the cosmetics industry as a skincare specialist, putting it well outside the realm of any specialized technology."}],[{"start":49.43,"text":"HBN is a relative newcomer to China’s bustling skincare scene, hawking a signature product containing retinol, a vitamin A derivative that boosts skin cell renewal and collagen synthesis. The company, whose savvy social media marketing has propelled it to stardom in the skincare world, primarily develops and sells products under corrective and preventative skincare formulations, its two major categories."}],[{"start":79.21000000000001,"text":"HBN’s revenue grew by a modest 6.9% from 1.95 billion yuan ($280 million) in 2023 to 2.08 billion yuan in 2024, even as its profit more than tripled to 129 million yuan from 39 million yuan over that time. Its revenue continued its slow climb in the first nine months of last year, rising 10.2% year-over-year to 1.51 billion yuan. Meantime, its profit continued to grow much faster, jumping 190% to 145 million yuan over that time."}],[{"start":122.99000000000001,"text":"Rapid rise to stardom"}],[{"start":125.42000000000002,"text":"Despite its status as a top skincare brand with over 2 billion yuan in annual revenue, HBN’s history is decidedly brief. The company was founded just 12 years ago as a seller of feminine care products. But things didn’t take off until 2019 with the launch of its HBN skincare brand. The company massaged its way into the top 10 in 2024, ranking 10th nationwide and fourth among mid- to high-end Chinese skincare brands that year by sales."}],[{"start":157.5,"text":"So, how did HBN go from newcomer to household name on China’s crowded skincare block within just a few years?"}],[{"start":167.19,"text":"The driving force lies in some marketing wizardry by Yao Zhenan, the company’s controlling shareholder. Yao’s background hardly hints at such mastery. His background lies in graphic design, including a master’s degree in animation and a stint lecturing in Shenzhen University’s digital media department. Yet his savvy marketing transformed HBN into a headline-grabbing skincare name now set to make a splash on the capital markets."}],[{"start":198.07,"text":"Marketing mastery redefined"}],[{"start":201.26,"text":"Yao made is mark by establishing retinol as HBN’s hero ingredient. He cobbled together a comprehensive “retinol anti-aging” campaign over multiple platforms, positioning his brand as China’s retinol authority."}],[{"start":217.01,"text":"His first step was to highlight retinol’s efficacy through university partnerships and alliances with well-known medical institutions, generating scientific content and clinical trials whose results could be published in industry journals. Such steps created a body of third-party validation literature that drew attention to both the efficacy of retinol and also to HBN’s specific formulations."}],[{"start":243.5,"text":"Next, Yao pursued independent affirmation for his products by enlisting international certification bodies for live-user trials and partnering with beauty platforms for real-world testimonials. These user-case demonstrations solidified his products’ performance through tangible outcomes."}],[{"start":263.09,"text":"But even after obtaining these medical endorsements and real-life testimonials, Yao continued to push. His masterstroke lay in deploying an army of key opinion leaders (KOLs) across lifestyle, beauty, fashion, cosmetology and celebrity categories on major social platforms. Their reviews and personal trials created an aura of authenticity that left a strong impression for HBN’s products in consumers’ minds."}],[{"start":293.96999999999997,"text":"Huge marketing spend"}],[{"start":297.26,"text":"HBN’s gross margins, which only take into account its production costs, are quite high, ranging from 73% to 76.6% in the last three years. Yet its adjusted net profit margins, which also factor in non-production items like administrative and marketing expenses, were far lower over the same time, ranging from 4.7% in 2024 to 9.6% last year."}],[{"start":325.89,"text":"The big discrepancy lies in marketing costs, which accounted for a hefty 65.1% and 59.4% of revenue in 2023 and 2024, respectively. That trend continued last year, with such expenses totaling 870 million yuan in the first nine months of 2025, equal to 58% of sales. The heavy spending goes overwhelmingly to relentless promotion, squeezing the company’s profits."}],[{"start":355.88,"text":"By comparison, the company spent just 66 million yuan, or a scant 3.4% of revenue, on R&D in 2023, and an even smaller 58 million yuan, or 2.8% of revenue in 2024. The figure continued to shrivel last year, falling to just 40 million yuan in the first nine months of 2025, or 2.6% of revenue."}],[{"start":383.83,"text":"Crucially, subcontracting forms an important part of HBN’s supply chain. Cosmetics manufacturer Bawei disclosed in its 2024 prospectus for a listing on China’s domestic A-share market that HBN accounted for 15% to 20% of its revenue during the reporting period."}],[{"start":403.11,"text":"HBN’s lopsided spend isn’t necessarily misdirected. Other more-established cosmetics brands have shown that savvy marketing can mean the difference between success and indifference towards products with identical formulations. Regardless of any competitive edge it may enjoy in its actual product, Yao’s brand-building prowess is one of HBN’s most important assets, and could give its IPO traction in an otherwise saturated skincare market."}],[{"start":435.01,"text":"That could be doubly important in a Hong Kong market where cosmetics stocks have struggled lately. Shanghai Chicmax (2145.HK) is down 33% from its 52-week peak, though it still trades at a relatively strong trailing price-to-earnings (P/E) ratio near 28 times. The once-hot Mao Geping (1318.HK) is similarly down 35% from its 52-week high, but still trades near an even higher P/E of 35 times on a forward basis. Skincare specialist Forest Cabin (2657.HK), which only listed at the end of last year, currently trades just 9% above its offer price, but is also richly valued at 38 times its forward earnings. HBN would likely seek to price at a similarly high multiple, perhaps around 30 times."}],[{"start":499.41999999999996,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1770108422_3580.mp3"}