Eternal Beauty wafts towards Hong Kong listing  – Bamboo Works

The perfume and cosmetics group sees room for growth as Chinese consumers develop a stronger desire for branded scents and home fragrances 

Key Takeaways:

• Eternal Beauty’s revenues rose nearly 10% last year to 1.86 billion yuan
• The company manages 63 perfume brands, including many of the big names in the global fragrance industry 　

By Lau Chi Hang

Eternal Beauty Holdings Ltd. is hoping investors will pay through the nose for a share of its fancy fragrance business.

The company manages a portfolio of high-end perfumes and beauty products in China, selling through retail stores, online malls and social media channels. Aromatic products such as perfumes and scent diffusers have spawned a thriving “olfactory economy” in China, promoted by influencers and lifestyle bloggers as a way of enhancing personal well-being.

Pointing to studies linking the sense of smell to emotion and memory, perfume retailers have found a willing market in young and middle-income consumers. 

Eternal Beauty, a brand manager for international perfumes, now scents an opportunity to expand its presence by raising capital on the stock market.

The company filed this month to list on the Hong Kong Stock Exchange, saying it was well-placed to benefit from further expansion in the Chinese fragrance market. The company said the IPO funds would be used to upgrade its systems, raise the group’s profile and support growth.

Since its launch in 1980, Eternal Beauty has built a large portfolio of brands from perfumes to cosmetics, skincare, eyewear and home fragrances, which it places and promotes in the Chinese market.

Sniffing out an opportunity

Founder Liu Kui Wing set up a branch office in mainland China in 1987 to introduce international perfumes to domestic consumers. As the Chinese economy expanded, demand for perfumery and other aspirational products took off. The company grew to encompass more than 7,500 retail outlets in over 400 cities in mainland China, Hong Kong and Macau. With the arrival of the internet, it also began promoting its product range through e-commerce platforms and social media channels.

Eternal Beauty now manages 63 brands, including Hermès, Van Cleef & Arpels, Chopard, Albion and Laura Mercier. The company also sells under its own Santa Monica label, starting with eyewear in 1999 and adding five perfumes in 2022.

The company designs and implements customized plans for brands to target Chinese consumers, through its channels and distribution networks on the mainland, Hong Kong and Macau. The services include product selection, sourcing, inventory controls, logistics, warehousing, marketing and customer relationship management.

The company’s revenues have been rising steadily for the past three fiscal years, from nearly 1.68 billion yuan ($230 million) in the period to end-March 2022 to 1.7 billion yuan and 1.86 billion yuan in the following two years. Annual profits came in at 171 million yuan, 173 million yuan and 206 million yuan over the same period. Earnings grew despite a growing trend for consumers to downgrade their spending as the Chinese economy…