Beauty Community eyes Chinese mart
BANGKOK: Thai entrepreneur Suwin Kraibhubes set up Beauty Community Pcl with his last 500,000 baht (RM63,877) after the Asian financial crisis.
Two decades on, the company’s shares are the top-performers globally among cosmetics providers.
The firm plans to tap China’s US$4.3 billion (RM18.2 billion) beauty sector for the next leg of expansion, after building a network of more than 300 retail outlets in Thailand and other parts of Southeast Asia.
Sales growth will be vital for a stock that Aberdeen Asset Management describes as expensive.
“Chinese customers like our products because of their quality and affordable prices,” said Suwin on Tuesday. “We’re focusing first on online sales through wholesalers to build brand awareness there.”
Beauty Community has delivered a total return of over 1,100 per cent since listing on the Thai exchange in December 2012, at least three times more than better-known rivals such as L’Oreal SA and Shiseido Co.
The company’s sub-US$10 lipsticks and creams are targeted at the middle class as well as tourist demand, including the nine million Chinese who visit Thailand each year.
“We focus on mid-end customers because they’re the biggest group of people,” said Suwin.
The firm’s total return since listing is the highest in the world among cosmetics companies with a market capitalisation of at least US$1 billion, according to data compiled by Bloomberg.
Sales growth averaged more than 30 per cent annually in the past five years, reaching 2.5 billion baht last year. Net income jumped 63 per cent to 656 million baht last year compared with 2015.
Suwin said he’s targeting a yearly increase of at least 20 per cent in both revenue and profit for the foreseeable future.
The stock’s valuation of about 42 times blended forward 12month earnings is the highest in the 22-member Stock Exchange of Thailand Commerce Index, adding pressure to expand sales.
In mainland China, Beauty Community sells through online channels, including Alibaba Group Holding Ltd’s Tmall platform.