Beauty family business Chando pushes for Hong Kong listing again, L'Oréal's sudden stake acquisition prompts inquiry from the CSRC

Ask AI · Why does L’Oréal’s stake acquisition in Olaya raise the SEC’s attention?

Old-school domestic beauty brand Perfect Diary once again made a push toward the Hong Kong Stock Exchange. Recently, Perfect Diary Global Holdings Limited (hereinafter referred to as “Perfect Diary”) submitted its prospectus to the Hong Kong Stock Exchange again. Judging by the data disclosed in the prospectus, Perfect Diary’s growth and profitability are not especially impressive: revenue scale rises steadily, but growth rate is limited; net profit fluctuates significantly, showing a typical “high gross margin, low net margin” structure. At the same time, the company has long relied on high-intensity marketing to drive growth; its sales expense ratio has remained above half for a sustained period, clearly eroding profits. In addition, the fact that revenue from a single brand accounts for more than 90% also makes the company’s ability to withstand risks and the effectiveness of its multi-brand strategy easier to be questioned by the capital market.

As an “old player” in domestic beauty established in 2001, Perfect Diary once ranked among the top local skincare brands. But against the backdrop of peers all moving onto capital markets, the company has yet to complete its listing process, and its path to capitalization is clearly lagging behind that of comparable companies.

Online channel sharerising, over halfof revenuespent on marketing promotion

Perfect Diary is almost characterized by all the typical development traits of domestic beauty brands. First, looking at overall revenue: from 2023 to 2025, revenue was 4.44 billion yuan, 4.6 billion yuan, and 5.32 billion yuan, respectively, with year-on-year growth rates of 3.6% and 15.7%, which is not fast compared with peers.

Net profit is unstable: from 2023 to 2025, it was 302 million yuan, 190 million yuan, and 351 million yuan, respectively. Over these three years, the gross margin and net profit margin were 67.8%, 69.4%, and 70.6% for the former; and 6.8%, 4.1%, and 6.6% for the latter, clearly showing the “high gross margin, low net profit” characteristics. Most domestic beauty brands have gross margins that are not low, but if net margin is relatively low and the gap between gross margin and net margin is large, then it is highly likely that marketing costs are being invested too heavily.

The prospectus shows that Perfect Diary’s sales and marketing costs’ year-on-year growth rates reached 12.9% and 12.1% in 2024 and 2025, respectively. The company explains this by saying it strengthened product and brand marketing activities, including various types of digital marketing activities—such as sharing beauty and skincare secrets, interacting with consumers on e-commerce platforms and social media, and doing live streams with KOLs. Since 2023, spending on sales and marketing costs has continuously accounted for more than half of total operating revenue—54.2%, 59%, and 57.2%, respectively. This indicates that Perfect Diary’s product production costs are actually not high, but a series of marketing promotion methods—such as ad-spend costs, influencers’ live-stream commissions, and platform take rates—are eating into profits.

And like other domestic beauty brands, online channels contribute most of the main revenue, while also amplifying the above-mentioned problem of excessive marketing and traffic-acquisition costs. The prospectus shows that the proportion of revenue contributed by online channels has risen year by year, from 61.9% in 2023 to 69.5% in 2025, accounting for nearly 70%; meanwhile, the revenue share from offline channels has been falling year by year, reaching the lowest level in the past three years at 30.2% in 2025. Under such a channel structure, Perfect Diary does not see a decline in expenses as revenue grows—because the larger the scale, the more traffic it acquires through online channels, and costs accordingly rise as well. This phenomenon is a common issue among most domestic beauty brands whose main battlefield is online channels: due to a high dependence on platform traffic and content marketing, sales expenses continuously erode profits.

Dependence on a single brand**, ownership highly concentrated in the founder’s family**

The prospectus shows that “Perfect Diary,” as the main brand, contributed as much as 95.9%, 95.4%, and 95.3% of group revenue from 2023 to 2025—meaning the entire group’s revenue is highly reliant on the main brand. But before that, Perfect Diary had repeatedly emphasized its multi-brand strategy, and it positioned itself in the prospectus as “a strategy-driven multi-brand cosmetics company.” However, it is obvious that the effects of a multi-brand strategy have not been ideal.

In addition, R&D investment is not high. The prospectus shows that the proportion of R&D investment to total operating revenue has hovered around 2% over the past three years, which is not high from the perspective of the domestic beauty industry. After all, many leading companies’ R&D allocation can be as low as around 4%, and some even reach 8%.

Perfect Diary’s equity structure is also very typical of a family business. Before its IPO, Perfect Diary’s founder Zheng Chunying held 74.58% of the shares. Her younger brother Zheng Chunbin and Zheng Chunwei, as well as her younger sister Zheng Xiaodan, each held 4.41% before the IPO, and this proportion does not yet include the shares of controlling companies that the four siblings hold separately. It can be estimated that the family’s combined shareholding ratio is above 87% (before the IPO). Such an equity setup is also likely to raise market concerns about whether the founder’s family’s highly concentrated ownership will affect the transparency of corporate governance.

A second attempt to list on Hong Kong stocks; L’Oréalrushes in with a stake, drawing SEC inquiries

Notably, among the limited external capital in Perfect Diary, the presence of the international beauty group L’Oréal appears, with a shareholding ratio of 6.67%. It is precisely because of L’Oréal’s stake acquisition that Perfect Diary faces questions from the SEC.

A reporter from Nandu learned by checking the China Securities Regulatory Commission’s website that, in the document titled “Requirements for Submission of Supplementary Materials for Overseas Issuance and Listing Record Filing (December 29, 2025—January 4, 2026),” the SEC conducted a series of inquiries regarding Perfect Diary’s listing in Hong Kong, including: “Please supplement and explain the reasonableness of the subscription price at which new shareholders acquired shares in your company during the most recent 12 months, the reasons for the differences among the subscription prices, and whether there is any situation of transferring benefits,” and L’Oréal is the shareholder that entered the scene before Perfect Diary’s IPO. In addition, regarding the issue of highly concentrated family equity mentioned above, the SEC also required it in its inquiries to “explain the reasons and reasonableness of the family trust holding your company’s shares through multi-layer structures.”

According to information, Perfect Diary’s path to going public has not been smooth. In earlier years, when the company’s name was “Jalan Group,” it had long been rumored that it would list on the A-share market, but nothing happened. It wasn’t until 2023 that the news suddenly surfaced that it would list in Hong Kong. In 2024, Jalan Group changed its name to “Shanghai Perfect Diary Group Co., Ltd.” There were market rumors that it also completed a red-chip structure reorganization at the same time. Until September 2025, Perfect Diary finally submitted its prospectus to the Hong Kong Stock Exchange for the first time. After that, however, there were no new developments until its prospectus became invalid in March this year. This time, Perfect Diary is updating its prospectus again, making another push to the Hong Kong Stock Exchange.

Overall, Perfect Diary exhibits issues such as weak growth and profit pressure. This is not unique in the domestic beauty industry; it is a reality that most domestic beauty brands face together after the traffic dividend fades. For Perfect Diary, listing on the capital market may bring funding and external oversight, but what truly determines its long-term value still lies in whether it can reduce traffic costs, enhance product strength, and break away from path dependence on a single brand.

Written and compiled by: Nandu N Video reporter Xu Bingqian