Chinese skincare firms Giant Biogene, Shanghai Chicmax plan to use Hong Kong IPO proceeds to boost R&D

Giant Biogene and Shanghai Chicmax have been given the green light to launch IPOs in Hong Kong, as they strive to cash in on China’s booming beauty industry

China’s cosmetics and skincare industry is expected to grow at an annual compound rate of 9.4 per cent to US$207 billion in 2026, versus 3.8 per cent for the global market, according to Frost & Sullivan

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Customers shop for cosmetics at Sanya International Duty Free Shopping Complex in Sanya, Hainan province. China’s cosmetics market is poised for huge growth in the next few years. Photo: Getty Images

Published: 5:43pm, 10 Oct 2022Updated: 5:47pm, 10 Oct 2022

Two Chinese skincare companies have been given the green light to launch initial public offerings (IPOs) in Hong Kong, as they strive to cash in on China’s booming beauty industry.

Giant Biogene Holding and Shanghai Chicmax Cosmetic said they plan to invest the bulk of the proceeds on research and development (R&D).

The IPOs come as consumers in China, the world’s second-largest cosmetics and skincare market, have become increasingly discerning, with domestic players facing competition from established international brands.

Xian, Shaanxi province-based Giant Biogene is a professional skin treatment firm offering products formulated with different types of recombinant collagen, as well as other products for skin repair and for problematic skin conditions such as sensitive skin and allergies, anti-ageing and skin maintenance, according to its prospectus.

IPOs in Hong Kong have slowed down this year. Photo: Jonathan Wong

Giant Biogene is also the largest collagen-based professional skin treatment product company by sales in China for three consecutive years since 2019, according to its prospectus. The company posted retail sales of 6 billion yuan (US$842 million) in 2021, making it the second-largest professional skincare company in China.

Apart from boosting its R&D capability, the company plans to use the IPO proceeds to expand its manufacturing capacity and enhance its sales and distribution network.