Analysis Report on the Proportion of Marketing Expenses of Banmuhuatian

Based on the collected information, I will systematically analyze the issue of the proportion of marketing expenses of Banmuhuatian.

Based on the public Hong Kong IPO application materials, the marketing expense data of Banmuhuatian (Shandong Huawutang Cosmetics Co., Ltd.) is as follows [1][2]:

Time Period	Operating Revenue	Sales and Marketing Expenses	Marketing Expense Ratio
2023	RMB 1.199 billion	RMB 637 million	53.1%
2024	RMB 1.499 billion	RMB 677 million	45.2%
First 9 months of 2025	RMB 1.895 billion	RMB 896 million	47.3%

From the data, it can be seen that Banmuhuatian’s marketing expenses have the following characteristics:

• Continuous growth in absolute amount
  : From RMB 637 million in 2023 to RMB 896 million in the first 9 months of 2025 (nearly RMB 100 million per month on average)
• Optimized expense ratio
  : Dropped from 53.1% in 2023 to 45.2% in 2024, stabilizing at around 47.3% in the first 9 months of 2025

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A comparison of Banmuhuatian with major domestic beauty brands in the same industry is as follows [3][4][5]:

Brand	Marketing Expense Ratio	Time Period
Banmuhuatian	45.2%-53.1%	2023-2025
Perfect Diary	48.2%-68.8%	2020-2021
Proya	47.9%-49.7%	2024-2025
Fu’erjia	47.8%	First 3 quarters of 2025
Botanee	53.06%	First 3 quarters of 2025
Mao Geping	47.5%-52.6%	2021-2024

:

• Banmuhuatian’s marketing expense ratio (45%-53%) is basically on par with leading domestic beauty brands in the industry
• Lower than the peak 68.8% of Perfect Diary, but higher than Proya’s 47.9%
• On par with Mao Geping (47.5%-52.6%)

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Nearly

[1][2]:

• 2023: 85.7% (RMB 1.027 billion)
• 2024: 75.9% (RMB 1.137 billion)
• First 9 months of 2025: 76.3% (RMB 1.445 billion)

Deeply bound to mainstream online platforms such as Douyin, Tmall, JD.com, and Xiaohongshu, it requires continuous large-scale marketing expenses to acquire traffic.

As a growing domestic brand, Banmuhuatian is in the

:

• Founded in 2010, aiming to become the “first domestic personal care stock in Hong Kong” in 2026
• Relies on content marketing, influencer live streams, short videos, and other methods to stimulate user interest
• Category expansion (body care → hair care → facial care) requires continuous brand investment

The beauty industry is highly competitive; “category recognition requires saturation attacks” — it takes 500 grass-planting notes + 20 live streams + Focus Media advertising coverage per week to make users remember a brand name [4].

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Banmuhuatian’s marketing investment has brought certain returns:

Indicator	2023	2024	First 9 months of 2025
Revenue Growth Rate	-	25.0%	76.7%
Adjusted Net Profit	RMB 23.7 million	RMB 82.8 million	RMB 148 million
Net Profit Growth Rate	-	249.4%	197.2%

:

• The marketing expense ratio dropped from 53.1% to 45.2%, indicating that
  marketing efficiency has improved
• Both revenue and profit have achieved high growth, and marketing input and output are well matched
• The company has become the
  top domestic brand
  in China’s body scrub market

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, not “excessively high”, but it is indeed at a relatively high level:

1. Horizontal comparison
   : Compared with leading domestic beauty brands such as Proya, Fu’erjia, and Mao Geping, Banmuhuatian’s marketing expense ratio (45%-53%) is within the normal industry range
2. Vertical trend
   : Dropped from 53.1% in 2023 to 45.2% in 2024, indicating that marketing efficiency is improving
3. Rationality
   : Considering that nearly 80% of the company’s revenue comes from online channels and it is in the critical period of brand building, this expense level is common in the industry

1. Diminishing marginal returns
   : As traffic costs rise, the marginal returns of marketing investment may continue to decline [4]
2. Content compliance risk
   : Was once penalized by platforms for vulgar live stream promotion content [1]
3. Intensified competition
   : The skin and personal care market is highly fragmented, and continuous vigilance against the impact of emerging brands is required

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[1] NetEase News - “Banmuhuatian’s Parent Company Huawutang Pursues Hong Kong IPO, Nearly 80% of Revenue Comes from Online Channels” (https://www.163.com/dy/article/KJG1HOGJ05569L3G.html)

[2] Sina Finance - “Banmuhuatian Aims to Become the First Domestic Personal Care Stock in Hong Kong, Achieves RMB 1.895 Billion Revenue in First Three Quarters of 2025” (https://finance.sina.com.cn/stock/hkstock/hkzmt/2026-01-17/doc-inhhqhvz1956988.shtml)

[3] Mininglamp Technology - “2023 KOL Marketing White Paper” (https://www.mininglamp.com/wp-content/uploads/2024/08/20230104_秒针系统X中国广告协会-2023-KOL营销白皮书_final.pdf)

[4] 36Kr - “Lipstick Effect Fails? The Beauty Industry Faces a Difficult Time in 2025” (https://m.36kr.com/p/3540115291352966)

[5] Sino-Manager - “Key Words of the Beauty Industry in 2024: Performance Pressure, Emphasis on R&D, Flagship Products” (https://sino-manager.com/detail/9528)