Breaking Down Proya Cosmetics Co.,Ltd. Financial Health: Key Insights for Investors

From a Zhejiang startup in 2006 founded by Hou Juncheng to a Shanghai-listed powerhouse (stock code 603605) and the first Chinese beauty firm to top 10 billion yuan in annual revenue in 2024, Proya Cosmetics has scaled through a broad brand portfolio (Proya, TIMAGE, Off&Relax, HAPSODE, CORRECTORS, INSBAHA, Awaken Seeds, UZERO, ANYA), multiple R&D centers (Scientific Skincare Laboratory, International Scientific Research Institute), and integrated manufacturing in Huzhou; the company combines multi-channel retail dominance - including top rankings on major platforms during '618' and 'Double 11' and self-broadcasting accounting for over 60% of festival transactions in 2024 - with aggressive marketing investment (11.9 billion yuan over three years), tight cost control and efficiency that delivered a gross profit margin of 73.38% in H1 2025, and a market capitalization of about 32.10 billion yuan as of July 1, 2025 while preparing a 2025 secondary listing in Hong Kong to accelerate international expansion.

Proya Cosmetics Co.,Ltd. (603605.SS): Intro

• Founder: Hou Juncheng (2006)
• Primary listing: Shanghai Stock Exchange, 2017 (603605.SS)
• Revenue milestone: first Chinese beauty firm to exceed ¥10 billion annual revenue (2024)
• Planned secondary listing: Hong Kong Stock Exchange (announced 2025)

Ownership & Governance

• Major shareholders historically include the founder/management and institutional investors following the 2017 IPO.
• Public float on SSE provides diversified shareholder base; proposed HK listing aims to increase foreign institutional participation.
• Board and senior management focus on R&D-driven brand portfolio expansion and channel diversification.

Mission & Strategic Positioning

• Mission: develop science-backed, consumer-oriented beauty products across mass and premium segments.
• Strategy: combine in-house R&D with brand architecture to capture mainstream and high-efficacy skincare demand.
• Differentiators: vertically integrated supply chain, multiple R&D centers, and multi-brand segmentation.

Brands and Product Scope

• Brand portfolio spans skincare, makeup, body & hair, and high-efficacy lines:

• Proya
• TIMAGE
• Off&Relax
• HAPSODE
• CORRECTORS
• INSBAHA
• Awaken Seeds
• UZERO
• ANYA

Research & Development

• R&D centers include the Scientific Skincare Laboratory and the International Scientific Research Institute.
• Investments target formulation science, ingredient sourcing, clinical efficacy testing, and product safety.
• R&D capabilities support new product development cycles and premium/higher-margin product launches.

How Proya Works & Makes Money

• Revenue streams:
  • Retail sales through e-commerce (Tmall, JD, proprietary channels) and offline distribution (department stores, specialty retailers, franchises).
  • Sales across multiple brands and price tiers-mass-market Proya plus premium/high-efficacy lines.
  • Private-label, licensing, and potential cross-border exports as part of international expansion.
• Profit drivers:
  • Brand mix improvement toward higher-margin premium products.
  • Operational scale-manufacturing efficiencies and supply-chain integration.
  • Marketing and digital customer acquisition driving unit economics and repeat purchase rates.
• Capital and funding:
  • Raised equity via 2017 SSE IPO; 2025 HKEX plan intended to provide additional capital for R&D, marketing, and overseas expansion.

Proya Cosmetics Co.,Ltd. (603605.SS): History

• Founded: 2006
• IPO: Listed on SSE (603605) in 2017
• Headquarters: Zhejiang Province, China
• Primary channels: E‑commerce, department stores, specialty retailers

• Public listing: Proya Cosmetics Co.,Ltd. is publicly traded on the Shanghai Stock Exchange under the code 603605.SS.
• Largest shareholder: Founder & Chairman Hou Juncheng holds a significant controlling stake (approx. 22-26% range in recent filings), retaining decisive influence over strategy and governance.
• Institutional ownership: Domestic and international institutional investors collectively hold a substantial proportion of free float (roughly 35-45%), including mutual funds, insurance, and asset managers.
• Board composition: Typically 8-11 directors combining cosmetics industry veterans, finance professionals, and independent directors to satisfy Chinese governance standards.
• Secondary listing: In 2025 Proya announced plans for a secondary listing on the Hong Kong Stock Exchange to broaden its investor base and raise its international profile.

• Product portfolio: Skincare, anti‑aging, sun care and color cosmetics aimed at mid‑to‑premium consumers.
• Channels: Online marketplaces, brand flagship stores, Tmall/WeChat commerce, and offline retail partners.
• R&D and innovation: In‑house R&D labs and partnerships with universities/contract manufacturers to shorten product development cycles and protect margins.
• Marketing: Heavy digital advertising, KOL/celebrity endorsements, and seasonal product campaigns to drive conversion and repeat purchase.

• Governance aligns with PRC corporate law and SSE disclosure rules; regular quarterly/annual reporting and independent audit.
• Board committees cover audit, nomination, and remuneration, with independent directors to strengthen oversight.
• Investor relations emphasize transparency on sales channels, inventory levels, R&D spend, and margin trends.

Proya Cosmetics Co.,Ltd. (603605.SS): Ownership Structure

• Mission: 'Beauty Forever, Wonder to share' - delivering enduring beauty solutions and sharing the joy of beauty with consumers.
• Vision: Become a world-class cosmetics enterprise and lead in the global beauty industry.
• Corporate spirit: diligence, pragmatism, passion, progressiveness, integrity, gratitude.
• Core values: responsibility, willingness to learn, high efficiency, collaboration, innovation, fairness.

• UN recognition (2024) - contribution to UN Women / HeForShe.
• Regular ESG/sustainability reports - transparent disclosures on emission targets, supply-chain audits and social programs.

• Significant promoter stake aligns long-term strategy with brand-building, R&D investment and cross-border expansion.
• Institutional holdings provide liquidity and corporate-governance oversight, encouraging periodic disclosures and ESG reporting.
• Large retail float supports active secondary-market pricing and access to capital when expanding channels or launching new product lines.

• Product innovation and brand positioning - new SKUs and premiumization drive ASP uplift and gross-margin resilience.
• Multi-channel distribution - direct e-commerce, Tmall/JD flagship stores, third-party platforms, and offline partnerships.
• Marketing & KOL strategy - digital marketing, livestreaming and celebrity/KOL partnerships to convert awareness into sales.
• Supply-chain control - in-house R&D and manufacturing partnerships to manage costs, quality and time-to-market.
• International expansion - selective exports and cross-border e‑commerce to diversify revenue pools.

Proya Cosmetics Co.,Ltd. (603605.SS): Mission and Values

• R&D-led product development: Proya operates a Scientific Skincare Laboratory and an International Scientific Research Institute that drive formulation, clinical testing and new active ingredient adoption.
• Manufacturing footprint: Multiple production facilities - including a major production base in Huzhou, Zhejiang Province - provide contract and in-house manufacturing capacity to scale output and control quality.
• Multi-channel sales: The company sells through online platforms (brand stores, major e‑commerce marketplaces, livestreaming, brand-owned channels) and offline channels (department stores, specialty retailers, boutiques and distributors).
• Platform partnerships & event marketing: Strategic collaborations with leading Chinese digital platforms have delivered top category rankings during major shopping festivals (notably 618 and Double 11 in 2024), driving volume spikes and customer acquisition.
• Cost and efficiency management: Ongoing measures to optimize procurement, streamline production and improve SKU profitability have materially increased margins.

• Skincare (core): premium day/night creams, serums, essences and masks - primary revenue driver.
• Makeup: foundations, lip and color products that leverage brand equity from skincare presence.
• Body & hair: complementary personal care offerings to broaden basket size and retail distribution.
• High‑efficacy skincare: clinically positioned lines sold at higher ASPs (average selling prices) and targeted at channel partners and digital shoppers seeking performance claims.

• Production capacity: Huzhou base plus other facilities enables rapid scale-up for promotional peaks and improved gross margin leverage.
• Digital leadership: achieved top rankings in beauty categories on major platforms during 618 and Double 11 2024, elevating LTV and repeat purchase rates.
• R&D investment: centralized scientific labs and international research collaborations accelerate product cycle time and enable premium positioning.
• Margin improvement: targeted cost-reduction and efficiency programs contributed to a gross profit margin of 73.38% in H1 2025.

Proya Cosmetics Co.,Ltd. (603605.SS): How It Works

• Direct product sales - Proya's primary revenue driver is sales of its own branded cosmetics across multiple categories: exquisite skincare, high-efficacy skincare, makeup, and body & hair care.
• E-commerce & self-broadcasting - the company has a large digital footprint; self-broadcasting (live commerce) accounted for over 60% of transactions during major 2024 shopping festivals.
• Omnichannel retail - offline retail partners, franchise counters, and flagship stores complement online channels to capture wider demographic segments.
• Strategic partnerships - alliances with suppliers, logistics providers, and selected retailers enhance distribution efficiency and cross-promotional reach.
• Marketing-driven demand - heavy investment in advertising, content, and KOL/live-stream campaigns to drive SKU conversion and repeat purchases.

• Product development: in-house R&D plus selective external labs to accelerate efficacy-driven product launches and maintain SKU differentiation.
• Manufacturing: owned and contracted manufacturing to balance capacity control and cost flexibility; supports high gross margins through scale and mix management.
• Distribution: direct DTC platforms, live-streaming channels, third-party e-commerce marketplaces, and offline retail partnerships create diversified revenue streams and reduce single-channel dependency.
• Customer acquisition & retention: aggressive paid media, influencer/live-host incentives, and membership/loyalty programs financed by elevated marketing spend to grow lifetime value (LTV).

Proya Cosmetics Co.,Ltd. (603605.SS): How It Makes Money

• Core revenue drivers: branded skincare (mass and premium lines), color cosmetics, and allied personal-care products.
• Channels: e-commerce (own site, Tmall, JD), social commerce/KOL partnerships, and offline retail (department stores, specialty chains, franchise stores).
• Value capture: product premiumization, broad SKUs, high gross margins from in-house manufacturing, and efficient digital marketing funneling customers to direct-sale channels.

• Profit levers: high-margin own-brand products and direct e-commerce sales increase gross retention; R&D-led proprietary formulations allow premium pricing and product differentiation.
• Cost levers: scale economies in production, optimized digital marketing ROI, and channel mix shift toward lower-cost online sales.
• Strategic initiatives supporting revenue growth: accelerated digital transformation, expanded e-commerce footprint, internationalization via HK listing, and sustainability/ESG programs that support brand equity.