2373.HK
Established in 1993, Beauty Farm is one of the oldest domestic chains in China’s beauty industry.

The Latest: Beauty store operator Beauty Farm Medical and Health Industry Inc. (2373.HK) announced Tuesday and Wednesday that two of its subsidiaries subscribed to structured deposit products worth 100 million yuan ($14.3 million) and 50 million yuan from Industrial and Commercial Bank of China and China Merchants Bank, respectively.

Looking Up: The company believes that the investments represent a good use of its idle funds, which will help to enhance its return on capital

Take Note: The spending of so much money on wealth management products may lead some investors to feel the company is not investing heavily enough in its core beauty stores.

Digging Deeper: Established in 1993, Beauty Farm is one of the oldest domestic chains in China’s beauty industry. It started out by offering traditional beauty services, but more recently has expanded into medical beauty and was listed on the Hong Kong Stock Exchange in January last year. The company’s revenue was growing steadily, but declined in 2022 during the pandemic. Its business has rebounded strongly with the pandemic’s end, with revenue up 31% in 2023 and 13.6% in the first half of this year.

Market Reaction: Beauty Farm shares were largely unchanged on Wednesday, closing up 0.2% at HK$16.26 by the midday break. The stock now trades near the upper end of its 52-week range.

Translation by A. Au

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