FAST NEWS: Beauty Farm profit surges on post-Covid reopening
The latest: Beauty store operator Beauty Farm Medical and Health Industry Inc. (2373.HK) said on Thursday it expects to record a 40% increase in revenue and 400% jump in net profit in the first half of the year.
Looking up: The company attributed the strong revenue growth to an increase in client visits during the period after China scrapped most of its Covid restrictions at the end of last year.
Take Note: The profit surge was partly due to big spending in the year-ago period on expenses related to the company’s Hong Kong IPO. That means a portion of the big improvement this year was unrelated to its daily operations.
Digging Deeper: Founded in 1992, Beauty Farm is one of China’s oldest cosmetic services chains. It started out providing conventional beauty treatments such as facials, then later expanded into medical aesthetics. The company’s revenue has been growing steadily in recent years, but decreased by 8.2% to 1.64 billion yuan ($230 million) last year, as traffic at its stores fell due to China’s strict pandemic controls. Its net profit last year also halved to 110 million yuan. With the relaxation of Covid controls this year, the company’s customer flow and revenue have rebounded significantly, and management believes its financial performance will rebound this year.
Market Reaction: Beauty Farm shares rose on Friday, closing up 8.3% at HK$22.75 by the midday break. The stock now trades near the lower end of its 52-week range.
Translation by Jony Ho
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