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as the domestic beauty market reshuffles, proya (603605.sh), a leading domestic beauty brand, is taking advantage of the consumer trend of "substitutes for big brands" to challenge international brands.

on the evening of august 27, proya delivered a mid-term "answer sheet" that showed steady growth: revenue in the first half of 2024 exceeded the 5 billion yuan mark for the first time, reaching 5.001 billion yuan, a year-on-year increase of 37.90%, and net profit attributable to shareholders of the parent was 702 million yuan, a year-on-year increase of 40.48%, and non-net profit was 679 million yuan, a year-on-year increase of 41.78%.

in addition to the skin care track represented by the main brand proya, the company has also developed its own brands such as caitang, yuefuti, and off&relax, forming a brand matrix with skin care, makeup, and cleansing as its prototype.

it is worth noting that in addition to the main brand proya continuing to account for 80% of the total revenue with a revenue of 3.981 billion yuan, the cosmetics brand caitang has also begun to exert its strength, with a revenue of 582 million yuan, contributing more than 10% of the revenue, and is expected to become the company's second growth curve.

caitang becomes the second growth curve

in the first half of 2024, proya achieved revenue of 5.001 billion yuan, a year-on-year increase of 37.90%, net profit attributable to shareholders of the parent company of 702 million yuan, a year-on-year increase of 40.48%, and non-net profit of 679 million yuan, a year-on-year increase of 41.78%. all three core indicators maintained double-digit growth.

during the same period, the company's gross profit margin was 69.82%, continuing the stable performance of gross profit margin of 66.46%, 69.70% and 69.93% from 2021 to 2023.

in terms of brands, the main brand proya has always been the "performance leader", contributing 3.981 billion yuan in revenue in the first half of 2024, a year-on-year increase of 37.67%. compared with the growth rate in the past three years (the growth rates from 2021 to 2023 were 28.25%, 37.46% and 36.36% respectively), there is no obvious downward trend, and it can be said to be stable.

in terms of revenue contribution, the main brand's revenue accounted for 79.71% in the first half of 2024. from 2021 to 2023, the main brand achieved revenues of 3.829 billion yuan, 5.264 billion yuan, and 7.177 billion yuan, accounting for 82.87%, 82.74%, and 80.73% of revenue, respectively.

in terms of product strategy, in the first half of 2024, the main brand proya insisted on deepening the "big single product strategy" and upgraded the core big single products of the "ruby series" and "source power series".

among the company's other own brands, the largest one is the cosmetics brand caitang, which achieved revenue of 582 million yuan in the first half of 2024, a year-on-year increase of 40.57%.

caitang was founded by celebrity makeup artist tang yi in 2014. in 2019, proya launched the partner brand caitang, which is currently positioned as a "professional makeup artist brand customized for chinese faces."

in comparison, the caitang brand achieved revenue of 246 million yuan, 572 million yuan and 1.001 billion yuan in 2021-2023, with growth rates of 103.48%, 132.04% and 75.06%, respectively. although the growth rate of 40.57% in the first half of 2024 has slowed down compared with the past, the performance of the caitang brand is remarkable against the backdrop of a weak recovery in the beauty industry as a whole.

in addition, the revenue share of the caitang brand continued to increase, reaching 5.33%, 8.99%, 11.26% and 11.66% in 2021-2023 and the first half of 2024, respectively.

in addition to the caitang brand, the two brands with smaller revenue, yuefuti and off&relax, also exceeded the 100 million yuan mark, with revenues of 161 million yuan and 138 million yuan respectively in the first half of 2024.

the problem of losing core talents

although its performance has maintained steady growth, proya is not without hidden worries.

according to incomplete statistics based on public information, since 2024, proya has lost many core talents including chief marketing officer (cmo) ye wei and chief scientific officer wei xiaolan. whether this will affect the long-term development of the company's brand has become a focus of attention from both inside and outside the industry.

in july this year, news broke that wei xiaolan, proya's chief scientific officer, had resigned.

a person related to proya publicly responded to this, saying, "wei xiaolan has confirmed that she has resigned. the subsequent r&d department will be in charge of the company's co-founder cao liangguo."

wei xiaolan joined proya in september 2022 and became the leader of the company's r&d team. prior to this, wei xiaolan had nearly 20 years of r&d experience in the cosmetics field. in 2018, she served as the vice president of r&d for asia pacific at the beauty giant coty group.

coincidentally, in january this year, ye wei, chief marketing officer (cmo) of proya, resigned and was subsequently hired as a brand marketing consultant by another leading domestic beauty brand, shanghai jahwa (600315.sh).

ye wei joined proya in 2018 and served as cmo. at that time, proya was at a transformation node to promote the big single product strategy and focus on online.

earlier in 2022, proya's chief r&d officer jiang ligang resigned and subsequently took up a new position at the domestic beauty brand pechoin, joining pechoin's r&d team as chief r&d officer.

jiang ligang has been working at proya for 14 years. during this period, proya's r&d team created the phenomenal star product "morning c and evening a" series.

some people believe that the loss of these key talents will inevitably cause proya to lose its first-mover advantage in r&d or marketing. some industry insiders also believe that "generally speaking, proya's decision-making mechanism is dominated by the entire organizational structure, not by individual professional managers, and the flow of talent in the industry is relatively normal."

faced with the challenge of talent outflow, proya's r&d investment has attracted much attention.

in the first half of 2024, proya's r&d expenses were 95 million yuan, a year-on-year increase of 3.38%, accounting for 1.89% of its revenue.

previously, from 2021 to 2023, proya's r&d expenses were 77 million yuan, 128 million yuan, and 174 million yuan, respectively, a year-on-year increase of 6.07%, 67.15%, and 35.59%. however, overall, its r&d investment accounted for a relatively low proportion of total revenue, at only 1.65%, 2.00%, and 1.95%, respectively.

according to the 2023 annual report, proya has 322 r&d personnel, an increase of 40.61% year-on-year.