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produced by radar finance hongtu | edited by xiao sha | deep sea

proya, the leading domestic beauty brand, is undergoing major personnel changes.

recently, proya disclosed that fang yuyou, the former co-founder, director and general manager of the company, will no longer serve as the company's director and general manager for personal reasons, and hou yameng, the former deputy general manager of the company, will serve as the company's new general manager. hou yameng is fang yuyou's nephew, and his brother-in-law hou juncheng will continue to serve as chairman.

proya was founded in 2003, when international beauty brands such as estee lauder and l'oreal were entering the chinese market. hou juncheng and fang yuyou, who were working as cosmetics agents on the front line, often encountered situations where the brands they represented suddenly disappeared. they believed that if they wanted to have a long-term career, they had to create a brand of their own, so proya was born.

as a veteran of proya, fang yuyou and his brother-in-law hou juncheng have spent 20 years and efforts to successfully build proya into a leading company in china's beauty industry. after this personnel change, he still "retired but not retired" and will continue to serve as the company's co-founder and board advisor, assisting the company in strategic planning and business management support.

before giving way to his nephew, fang yuyou cashed out billions.

it should be noted that although hou yameng, who was born in 1988, has been working in the front line of proya for many years, he still faces considerable challenges after taking over. according to the latest semi-annual report, proya mainly relies on the proya brand to support its sales, and the growth of its new brands such as caitang, or and yuefuti has slowed down significantly. in addition, the company is also believed to have problems such as focusing on marketing and neglecting research and development, and frequent loss of core talents.

fang yuyou cashed out intensively and handed over the baton to hou yameng, a "post-80s" who became the general manager

on the afternoon of september 12, proya company held its first extraordinary general meeting of shareholders in 2024 on the 9th floor of proya building, no. 588 xixi road, xihu district, hangzhou, to elect new members of the board of directors, hold a new board meeting, and appoint the company's new senior management.

the announcement of the shareholders' meeting resolution showed that hou juncheng, hou yameng and jin yanhua were elected as the company's fourth non-independent directors, and ma dongming and ge weijun were elected as the company's fourth independent directors.

among them, fang yuyou, who has served as a director of proya since august 2012, did not appear on the company's list of non-independent directors for the first time.

at the fourth board meeting held on the same day, hou juncheng was elected as chairman and hou yameng was appointed as general manager of the company, both with terms of three years.

at an investor conference, proya stated that fang yuyou, the company's former co-founder, director and general manager, would no longer serve as the company's director and general manager for personal reasons. he will continue to serve as the company's co-founder and board advisor, assisting the company in strategic planning and operational management support.

according to the information, fang yuyou was born in november 1969 and is only 55 years old. in terms of age, fang yuyou, 55 years old, is 5 years younger than hou juncheng, who is still in office.

in addition, the former deputy general manager of the company, hou yameng, was appointed as the new general manager of the company. according to his resume, hou yameng was born in december 1988, is of chinese nationality, has no permanent residence abroad, and has a college degree.

he has worked in the e-commerce department of proya since 2014 and has served as the company's director and deputy general manager since september 2021. proya believes that hou yameng has been deeply involved in the company's front line and has accumulated rich practical experience in brand, product, marketing and other aspects.

regarding the management change, proya responded to the media, saying, "this change is a normal change every three years. we hope that this adjustment will better prepare the company for the next growth cycle."

in the eyes of the outside world, fang yuyou's "handover" has been foreshadowed. past announcements show that from december 10, 2020 to june 4, 2021, fang yuyou cashed out 1.118 billion yuan; from august 30, 2021 to february 13, 2022, fang yuyou cashed out 1.117 billion yuan; and then from september 2022 to february 2023, fang yuyou cashed out another 1.338 billion yuan.

at present, fang yuyou's shareholding in proya has dropped from 24.27% at the end of the third quarter of 2020 to 15.03% as of the middle of this year.

in addition to the management changes, proya has also lost a lot of core talent in recent years. in january, proya's chief marketing officer ye wei resigned and was later hired by shanghai jahwa as a brand marketing consultant, while the company's former chief r&d officer jiang ligang also joined pechoin this year.

in july, wei xiaolan, the chief scientific officer of proya, resigned after less than two years in office. in response, a proya official told the media that the subsequent r&d department will be led by proya co-founder cao liangguo.

wenzhou in-laws’ beauty business

according to information, fang yuyou, the founder of proya, has a high school education and graduated from tsinghua university's advanced training program for presidents in the cosmetics industry. he has been working at proya since 2007.

hou juncheng and fang aiqin are the controlling shareholders and actual controllers of proya. as of the end of june 2024, hou juncheng directly holds 34.46% of the company's shares, making him the largest shareholder. fang yuyou is fang aiqin's younger brother, and hou juncheng's brother-in-law.

tianyancha app shows that proya was founded in 2006 and listed on the main board of the shanghai stock exchange in 2017. however, hou juncheng and fang yuyou's cosmetics business started earlier in the 1990s.

according to chinese entrepreneurs, in 1990, hou juncheng and fang yuyou, together with several brothers and relatives, founded the "liaoyuan daily chemical company". together, they went to nine cities across the country to sell cosmetics. in the following decade, these wenzhou people successively won the agency of brands such as ding jiayi, alibis, little nurse, yue-sai, and revlon, and gradually became a large local daily chemical agent.

after entering the new century, foreign cosmetics giants have entered the domestic market and frequently acquired domestic products and brands. for example, little nurse once ranked third among skin care brands, with sales second only to olay and dabao, but it was difficult to enter the high-end market. eventually, little nurse was acquired by l'oreal at its peak.

this made hou juncheng realize that he would never be able to control his own destiny by doing wholesale. if he wanted to have a long-term career, he had to create a brand of his own.

so in 1999, hou juncheng came to hangzhou from yiwu with this idea in mind. after accumulating some experience, he founded proya in 2003, with great help from fang yuyou.

under fang yuyou's management, in the early stages of its development, proya opened exclusive stores in third- and fourth-tier cities, taking a cost-effective approach and adopting the strategy of surrounding the cities from the countryside, thus avoiding head-on competition with international brands.

after gaining a firm foothold in the market, proya adjusted its strategy to transform to the high-end market and take the path of branding. to this end, the company invested heavily in promoting branding operations, not only entering shopping malls and supermarkets across the country, but also invested 20 million yuan to create a first-class terminal image and completely replace the original image counters in the specialty stores; invited actress "beauty queen" big s to endorse its products, and its advertisements were frequently broadcast on major satellite tv stations.

it is reported that fang yuyou approached "mad advertising man" ye maozhong, hoping that the latter would help proya establish a certain associative relationship with consumers. with the help of ye maozhong, proya began to establish a natural association with hydration, and the advertisement starring big s made the brand's image as a "deep hydration expert" deeply rooted in people's hearts.

the effect of brand operation is obvious. in 2008, proya's sales doubled. by 2009, sales increased by 80%.

after tasting the sweetness of advertising investment, in 2011, proya spent a huge amount of money to obtain the naming rights for the time-travel drama "palace". some netizens jokingly called the drama "proya palace", and the name proya became popular all over the country.

in 2017, proya was successfully listed on the shanghai stock exchange. in the same year, the company began to vigorously promote its online transformation. in 2018, the company proposed the "three-horse" strategy and changed its business strategy from "online and offline integration" to "online channels as the main and offline channels in parallel".

thanks to the traffic dividend from online channels, proya's annual revenue and net profit have maintained a growth of more than 20% since 2018. the company's stock price has also soared from the issue price of 15.34 yuan to a high of over 281 yuan (after adjustment).as of the close of september 18, the company's stock price was 85.94 yuan, and its total market value was 34.1 billion yuan.

hidden concerns behind the brilliant performance

in recent years, domestic beauty products have emerged as a new force, and are showing signs of dethroning foreign brands.

according to the 2024 xiaohongshu "china beauty industry white paper" released by xiaohongshu commercialization and qingyan intelligence, the scale of the domestic beauty market has continued to soar in the past decade, with an average annual compound growth rate of 13.18%. in 2023, domestic beauty will surpass foreign brands for the first time with a market share of 50.4%.

as a leading domestic beauty brand, according to ifind data from tonghuashun, proya achieved operating income of 5.001 billion yuan in the first half of the year, a year-on-year increase of 37.90%, and net profit attributable to shareholders of listed companies of 702 million yuan, a year-on-year increase of 40.48%.

in contrast, l'oréal, a foreign giant that has long been the number one in the domestic beauty industry, only saw its sales in the chinese market increase by 0.8% year-on-year in the first half of this year.

proya mainly owns brands such as "proya", "cai tang", "off&relax", "yue futi", "correctors", "insbaha original color bota", "youzilai" and "han ya".

among them, the main brand proya focuses on technological skin care, targeting young white-collar women. the main price range is 200-500 yuan, and it is also the major product on which the company relies for survival.

the financial report shows that in the first half of this year, the "proya" brand achieved revenue of 39.81%, a year-on-year increase of 37.67%, accounting for 79.71% of total revenue.

the main brand, proya, maintained high growth, which was undoubtedly the number one contributor to the company's performance growth. at the same time, the growth rate of proya's sub-brands slowed down in the first half of the year.

during the reporting period, the year-on-year revenue growth of the company's major new brands caitang, or and yuefuti were 40.57%, 41.91% and 22.35% respectively. in the same period last year, the year-on-year revenue growth of these three brands were all above 60%, and the growth rate in the same period of 2022 was even above 130%.

caitang, the largest of the new products, only had revenue of 582 million yuan in the first half of the year. considering the slowdown in growth rate when the scale is still small, this is not good news for l'oréal.

in addition, another concern for the booming proya is the continued increase in marketing costs, which will also have a certain impact on the company's profits.

in the first half of the year, proya's sales expenses were 2.34 billion yuan, and the sales expense ratio reached 46.78%, higher than 43.63% and 44.61% in 2022 and 2023.

calculated year-on-year, the company's sales expenses increased by rmb 760 million, a growth of 48.08%, during the reporting period, mainly due to an increase of rmb 688 million in image publicity and promotion expenses, a year-on-year increase of 50.03%.

in sharp contrast, its r&d expenses in the first half of the year were 95 million yuan, an increase of 3.0924 million yuan from the same period last year, accounting for 1.89% of its operating income.

under the leadership of hou juncheng and his son hou yameng, where will proya develop?