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"Chinese luxury" influences the performance of Shuiyang Co., Ltd.

Why Did Shuiyang Co., Ltd.'s Profits Soar?

On the evening of April 23, Shuiyang Co., Ltd. (300740.SZ) released its 2023 annual performance report. In 2023, the company achieved operating income of 44.93 billion yuan, a year-on-year decrease of 4.86%; net profit was 2.94 billion yuan, a year-on-year increase of 135.42%. Comparatively, in 2022, Shuiyang Co., Ltd.'s net profit plummeted by over 47%.

How Did the "China Luxury" Trend Affect Shuiyang Co., Ltd.?

The rebound in net profit of Shuiyang Co., Ltd. can be attributed to the contribution of its flagship product, Ifidan. In its performance report, Shuiyang Co., Ltd. pointed out that one of the reasons for the increase in net profit is "the further improvement of the self-owned brand multi-level brand matrix system, and the continuous increase in the proportion of high-margin brands."

What's Next for Shuiyang Co., Ltd. and Ifidan?

Ifidan represents Shuiyang Co., Ltd.'s self-owned brand and high-margin brand. As a high-end brand, Ifidan's main products are priced at the thousand yuan level, with a 50ml super mask priced at 1800 yuan on the Tmall platform. Over the past year, Ifidan has gained the favor of "Chinese luxury" consumers - on just two major e-commerce platforms, TikTok and Tmall, Ifidan's GMV has reached nearly 600 million yuan.

Shuiyang Co., Ltd. introduced Ifidan into the Chinese market in 2019 and acquired it three years later. Shuiyang Co., Ltd. made many localization changes for Ifidan, which also provided a template for Shuiyang Co., Ltd.'s "agency to self-owned" model.

What Challenges Lie Ahead for Shuiyang Co., Ltd.?

After Ifidan, Shuiyang Co., Ltd. has cooperated with several international high-end brands to carry out diversified brand strategies. How to recreate another "Ifidan" becomes the next goal for Shuiyang Co., Ltd.

For inquiries regarding Shuiyang Co., Ltd.'s future deployment of Ifidan and performance growth targets, a journalist from Times Weekly conducted an interview via email on April 25, but as of press time, no response has been received.

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In conclusion, Shuiyang Co., Ltd.'s strategic acquisition and localization efforts have propelled its brands, such as Ifidan, into the forefront of the Chinese luxury market. However, as the market evolves and consumer preferences shift, the company faces the challenge of sustaining this growth and adapting to changing trends. Only time will tell if Shuiyang Co., Ltd. can replicate the success of Ifidan with its other brands. Your thoughts on this matter are highly appreciated. Feel free to comment, follow, like, and thank you for reading!