Futu News reported on December 29 that$FOREST CABIN (02657.HK)$The stock closed up 18.75% in the gray market today, at HK$92.35. Each lot contains 50 shares, and without considering handling fees, investors earned HK$729 per lot.
Source of market data: Futu Securities
Investment Highlights
Market Leadership: The company has consistently focused on providing skincare solutions rooted in traditional Chinese culture to solidify its leading position in the facial essence oil category. Through in-depth research on native high-altitude camellia flowers and their breakthrough application in essence oil formulations, the company pioneered the concept of “nourishing skin with oil” in 2014 and launched the first generation of camellia essence oil. According to data from CIC Consulting, the company has ranked first nationwide among all facial essence oil products in terms of total retail sales across all channels for 11 consecutive years since 2014.
Supply Chain Advantages: According to data from CIC Consulting, the company is the only enterprise in China’s facial essence oil market that has achieved full value chain integration of core ingredients, covering exclusive procurement of camellia, extraction of patented components, product development, and production. This end-to-end control ensures consistent quality from source to shelf, reinforcing the company's leadership in China’s premium skincare market.
Risk Factors
Market Competition Risks: The high-end skincare industry in China, where the company operates, is relatively concentrated. According to data from CIC Consulting, the top 15 brands account for 66.1% of the market share. In 2024, based on retail sales, Linqingxuan ranked 13th among all high-end skincare brands in China (including domestic and international brands), holding a 1.4% market share and being the only domestic brand among China’s top 15 high-end skincare brands. The company’s ability to compete effectively depends on several factors, including brand reputation, product innovation and efficacy, competitive pricing, quality, production efficiency, and robust sales and marketing strategies. If the company fails to compete effectively, its market share may decline, and its business, financial condition, and operating performance could be materially and adversely affected.
Market Demand Risks: The skincare industry and demand for the company’s products are influenced by overall market conditions and consumer purchasing behavior. Despite growing consumer interest in skincare and self-expression, market demand for the company’s products primarily depends on consumers' disposable income and willingness to purchase skincare products. Therefore, this industry is particularly vulnerable to market fluctuations and broader macroeconomic factors. During such periods, consumers may prioritize essential spending while cutting expenditures on non-essential items like skincare products. Consequently, any decline in consumer purchasing power could lead to reduced customer traffic, potentially having a material adverse impact on the company’s business, financial condition, and operating performance.
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Editor/Deng