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According to the Hong Kong Stock Exchange's disclosure on July 18, Yingtong Holdings Co., Ltd. submitted an application for listing on the main board of the Hong Kong Stock Exchange, with BNP Paribas and CITIC Securities as its joint sponsors.

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This article is for information exchange only and does not constitute any trading advice

Yingtong Holdings is the largest fragrance brand management company in the combined markets of Mainland China, Hong Kong and Macau in terms of retail sales in 2023. The company has a large and diversified brand portfolio that includes not only fragrances, but also cosmetics, skincare, personal care products, eyewear and home fragrances.

The Company has achieved a leading position in the combined perfume markets of Mainland China, Hong Kong and Macau due to its long operating history. The Company has acquired extensive knowledge in the perfume industry in these markets and has accumulated relevant expertise and abundant resources to manage and promote numerous international perfume brands.

According to Frost & Sullivan, Yingtong Holdings is the third largest perfume group in the combined market of Mainland China, Hong Kong and Macau in terms of retail sales in 2023. The company is also the only perfume brand management company among the top five perfume groups in the Mainland China market and the combined market of Mainland China, Hong Kong and Macau in terms of retail sales in 2023.

According to Frost & Sullivan, the Chinese perfume market has continued to grow rapidly in recent years and has the potential to expand further, mainly due to the low penetration rate of perfume in China and the large population size of China compared with other developed countries. The company believes that the company will continue to seize the market opportunities brought by China's emerging olfactory economy and create perfume brands that provide consumers with diversified personality and aesthetic value in various consumption scenarios.

In the long-term operation process, Yingtong Holdings has gradually accumulated excellent brand management capabilities, introducing and managing a number of global leading brands to Mainland China, Hong Kong and Macau, enabling the company to solve the challenges faced by global brands in market entry strategies, distribution network planning and strategies to cater to consumer preferences in these markets.

Yingtong Holdings' reputation among the world's leading brands makes the Company a preferred partner for many brand licensors who wish to enter or expand their brand presence in Mainland China, Hong Kong and Macau. This long-term commercial relationship enables the Company to build iconic brands and attractive products in the Company's portfolio.

As of the Latest Practicable Date, the total number of brands managed by the Company was 63, including Hermès, Van Cleef & Arpels, Chopard, Albion and Laura Mercier, covering a wide range of pricing levels and functions to cater to the differentiated needs of consumers in Mainland China, Hong Kong and/or Macau.

During the Track Record Period, a large number of brand licensees working with the Company have granted the Company exclusive rights in selected products, channels and distribution regions. Yingtong Holdings believes that these exclusive licenses and sub-licenses reflect the trust of brand licensees in the Company and consolidate the Company's competitive advantage over its competitors.

The Company provides a comprehensive sales and distribution network covering almost all possible channels for perfumes, skin care products, makeup, personal care products, eyewear and home fragrances in Mainland China, Hong Kong and Macau. As of the Latest Practicable Date, the Company has more than 7,500 offline sales points in more than 400 cities in Mainland China, Hong Kong and Macau.

In addition to offline sales channels, Yingtong Holdings also sells products online through well-known e-commerce platforms and social media platforms in mainland China, Hong Kong and Macau. This large and omni-channel sales and distribution network helps the company to continuously expand its consumer base in an ever-changing market environment, maximize consumer value by providing consumers with professional services and convenient and fast shopping experience, and enable the company to meet the needs of many consumers of different ages, spending power and product preferences. The company's balanced sales and distribution network covering online and offline channels also enables the company to flexibly adjust its sales methods to cope with changes that may affect the company's business and industry.

During the Track Record Period, the Company's business and operating performance maintained steady growth. Yingtong Holdings' revenue increased from RMB1.675 billion for the year ended March 31, 2022 to RMB1.699 billion for the year ended March 31, 2023, and further increased to RMB1.864 billion for the year ended March 31, 2024. Similarly, the Company's net profit increased from RMB171 million for the year ended March 31, 2022 to RMB173 million for the year ended March 31, 2023, and further increased to RMB207 million for the year ended March 31, 2024.

As of the years ending March 31, 2022, 2023 and 2024, the Company managed 47, 49 and 59 brands, respectively.

Yingtong Holdings is committed to maintaining its leading position in the integrated perfume market in mainland China, Hong Kong and Macau, and continuing to be the long-term preferred partner of leading global brands. To achieve the company's goals, the company plans to implement the following key strategies: consolidate the company's market leadership by optimizing, broadening and diversifying the company's brand and product portfolio; reach consumers comprehensively through continuous investment in self-operated retailer channels; accelerate digital transformation, improve operational efficiency, and strengthen full-cycle management of consumers; and enhance the Group's visibility and leading reputation in the industry.

The Company's business mainly consists of two key components, enabling global brands to gain a foothold in Mainland China, Hong Kong and Macau and continue to expand their influence and penetration, namely brand building and enhancement, namely the Company designs and implements tailor-made market entry and expansion plans for brands; and sourcing and distributing its branded products in Mainland China, Hong Kong and Macau, namely the Company distributes products to a wide range of consumers through the Company's omni-channel sales and distribution network.

Yingtong Holdings is one of the leaders in China's perfume industry. The company manages a diversified portfolio of perfume products from several well-known global brands. The company manages and sells perfumes at various price points, including entry-level high-end perfumes (priced at RMB599 or less per 50 ml), high-end perfumes (priced between RMB600 and RMB1,199 per 50 ml) and luxury perfumes (priced at RMB1,200 or more per 50 ml).

In order to make the fragrance products sold by the Company attractive and easy to use to consumers with different tastes and preferences, the Company also provides fragrances with various scents, including floral, oriental, woody and fresh fragrances. As of the Latest Practicable Date, the Company provides fragrances from 48 external brands.

Yingtong Holdings has been managing skincare brands in China since 1987. The Company currently distributes its skincare products in Mainland China through joint ventures and has managed high-end Japanese skincare brand Albion and Germany-based high-end skincare brand Dr.Babor in Hong Kong since 2014. As of the Latest Practicable Date, the Company mainly operates cleansers, moisturizers, essences, creams, masks, lotions and eye creams from 16 external brands.

The Company also manages selected cosmetics brands with good growth potential. The cosmetics brands that the Company has exclusive distribution rights for in Mainland China include Laura Mercier and Elegance. As of the Latest Practicable Date, the Company mainly operates foundation, lipstick, blush and eye shadow from eight external brands.

In addition, several brands that provide perfumes managed by the Company also provide personal care products. In order to expand the sales of personal care products, the Company began to manage AccaKappa, a world-class Italian personal care brand featuring traditional Italian handmade manufacturing methods, in mainland China in January 2024. As of the last practicable date, the Company mainly provides body care and hair care products, toothpaste, combs and toothbrushes from 11 external brands.

The Company has been managing eyewear since 1987 and as of the Latest Practicable Date, the Company mainly provided eyewear and sunglasses sourced from five external brands.

Leveraging the company's success and experience in managing perfume brands, the company has successfully expanded into the home fragrance market. In 2023, Yingtong Holdings introduced Dr. Vranjes Firenze, a world-renowned home fragrance brand, to mainland China and opened its first Chinese flagship store in Shanghai. As of the last practicable date, the company mainly sells scented candles, diffusers and home fragrance pendants purchased from 16 brands.

In addition to external brands and products, Yingtong Holdings also manages perfumes and glasses under its own brand Santa Monica. In 1999, the Company began to offer glasses under the Santa Monica brand. As of the Latest Practicable Date, the Company offers three types of glasses under the Santa Monica brand.

In addition, the company launched five fragrances under the Santa Monica brand in 2022, which are generally regarded as entry-level high-end fragrances. Santa Monica Eyewear is committed to providing cost-effective products that integrate technological innovation and aesthetic design to create a fashionable and relaxed lifestyle for consumers.

The Company has an extensive omni-channel sales and distribution network with high penetration rates in both offline and online channels. Through the Company's omni-channel network, the Company has established extensive sales outlets in Mainland China, Hong Kong and Macau.

As of the Latest Practicable Date, Yingtong Holdings' offline sales channels have more than 7,500 sales points in more than 400 cities in Mainland China, Hong Kong and Macau. As of March 31, 2022, 2023 and 2024, the Company operates 102, 92 and 87 offline stores/counters in Mainland China, Hong Kong and Macau, respectively.

In addition, as of the last practicable date, the Company operates an offline Shifeng Qihe store in Shanghai. Shifeng Qihe is the Company's self-operated retailer brand, covering online stores and offline sales channels. For the years ending March 31, 2022, 2023 and 2024, the revenue generated from the sales of products through direct sales channels was RMB1.167 billion, RMB1.100 billion and RMB1.292 billion, respectively, accounting for 69.7%, 64.7% and 69.3% of the Company's total revenue in the same years.

Yingtong Holdings intends to use the funds raised from this Hong Kong IPO to further develop the company's own brands (including Santa Monica), and to acquire or invest in external brands; to develop and expand the company's self-operated retailer channels, including expanding the company's online and offline Shifengqihe stores and other self-operated online and offline stores/counters.

It will also be used to accelerate the company's digital transformation, mainly by upgrading the company's digital CRM system, middle-office system, and financial and operational systems; to enhance the Group's visibility and reputation; and to allocate working capital and general corporate purposes to support the company's business operations and growth.

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