A former university lecturer turned entrepreneur has built HBN into one of China’s top domestic skincare names in less than six years, and its parent, Hujia Technology, has just filed to list in Hong Kong. The narrative of rapid ascent — from a niche ‘improvement’ skincare brand to a top-10 domestic player — is compelling, but the company’s prospectus exposes a business model that leans heavily on marketing spend rather than clinical research or durable product differentiation.
HBN positions itself in the mid-to-high-end improvement-oriented skincare segment, promoting a “morning C, evening A” regimen that pairs vitamin C brightening with retinoid (A) anti-wrinkle treatments. The brand claims leadership in China’s retinoid (A) segment by sales for 2022–2024 and ranks highly in essence/toner categories, pricing products below global luxury names but above many domestic peers.
Financials underline the growth story and the tension at its core. Hujia reported revenues of RMB 1.948 billion, RMB 2.083 billion and RMB 1.534 billion in the three reporting periods, with adjusted net profits rising but net margins remaining muted. Gross margins are unusually high — above 73% across the periods — yet net profit margins are low, sometimes falling below 2% and never exceeding 10% during the report periods.
The explanation is straightforward: marketing. During the reporting periods the company spent RMB 1.114 billion, RMB 1.049 billion and RMB 721 million on promotion, representing roughly 57%, 50% and 48% of revenue respectively. Sales and distribution expenses exceeded RMB 1.2 billion in the largest year and accounted for more than half of revenue each period. Put bluntly, if a consumer pays RMB 500 for an HBN product, more than RMB 250 effectively goes to advertising and promotions.
Hujia seeks to burnish HBN’s scientific credentials — citing 130 patents and a leading number of first-author SCI publications among domestic skincare brands — and self-describing the brand as “derm-level.” Yet R&D spend tells a different story: R&D expenditure fell from RMB 66 million to RMB 57.8 million and then to RMB 40 million across the reporting windows, with R&D intensity at 3.4%, 2.8% and 2.6% of revenue. Relative to peers in the domestic mass-market and improvement segments, HBN’s R&D investment is modest.
The supplier list reinforces the promotional dependency: the company’s largest vendors are largely platform and promotion service providers rather than ingredients, contract manufacturers, or clinical partners. That reliance on third-party advertising ecosystems has fuelled rapid top-line growth but left operating leverage thin and exposed Hujia to rising customer-acquisition costs and competitive pressure.
For investors and sector observers the implications are clear. HBN’s IPO will give the company capital and visibility, but it also foregrounds a classic question in consumer brands: can growth sustained by high marketing intensity convert into durable profitability without greater investment in product science, owned channels, or lower-cost distribution? In a crowded Chinese skincare market, where both foreign giants and nimble local rivals compete, HBN’s current model looks vulnerable to a higher cost of customer acquisition or any cooling in marketing effectiveness.