2020.06.09 CoStone Capital Views:
Lily & Beauty is the largest one-stop online retailer of beauty products in China and the world’s largest provider of online counters for cosmetic brands.
On June 4, Lily & Beauty, a CoStone portfolio company, was approved by CSRC to be enlisted.
Lily & Beauty is the largest one-stop online retailer of beauty products in China and the world’s largest provider of online counters for cosmetic brands.
The company is an authorized agency and partner of international top cosmetics groups, such as Kanebo, AmorePacific, Henkel, more than 60 renowned world brands including Erno Laszlo, Whoo, Freeplus, Sulwhasoo, Avene and Schwarzkopf to sell their products in China via flagship stores on Tmall, a popular online retail platform.
Each flagship store is equipped with a professional operation team to develop science-based plans for procurement and marketing. In addition, product layout, visual design, big data analysis, targeted advertisement injecting, CRM, pre-and-post sales services, warehouses, and logistics, regular promotion and new product marketing are all among the team’s responsibilities.
Lily Beauty has a profound talent pool. Their C-level executives are professional, experienced, and stable.
From 2016 to 2018, the company’s operating income registered 2.02bn, 3.42bn, and 3.61bn RMB with net profits of 81mn, 227mn, 252mn RMB respectively. The annual compound growth rates of the operating income and net profits were 33.9% and 76.4%.
According to IResearch, the online market of brands reached 161.34bn RMB in 2018 from 2011’s 5.9bn RMB with a compound growth rate of 60.42%. It is expected to reach 347.36bn RMB in 2021.
Upgraded consumption and expanding middle class in China boost the investment in one’s appearance. Correspondingly, the demand for cosmetics, especially middle-high end cosmetics are on the rise, especially when sold online. The online trading volume of cosmetics and personal care has reached 84.25bn RMB, occupying 23.3%, twice that five years ago.
Lily & Beauty is also exploring cosmetic brands with development potential. By partnering with these brands, the company hopes to boost its sales and image via professional online marketing. Also, Lily & Beauty attempts to cooperate with brands beyond cosmetics to become a comprehensive e-commerce agency.
Lily & Beauty owns a bright future.
Rewritten by Chen Cong, Edited by Li Yunzhen, Du Zhixin
Over the past year, the bull market returned, with technology leading the way.
As I said back in October 2024, the rally that began on September 24 was not merely a rebound, but a reversal. Since then, China's capital markets have undergone a broad revaluation, moving from undervaluation toward fair value.
The Shanghai Composite Index reached its highest level in a decade. The "Yi-Zhong-Tian" trio—Eoptolink, Zhongji Innolight and TFC Communication, three prominent Chinese optical communications stocks—saw their share prices multiply severalfold in a single year. Cambricon's market capitalization briefly exceeded RMB 600 billion. Elsewhere in the technology sector, triple-digit price-to-earnings ratios and valuations exceeding RMB 10 billion became commonplace.
Some investors were greedy; others, fearful. Still others asked me: Are technology stocks in a valuation bubble?
My answer is that what we are witnessing is the hunger and anxiety of an era, reflected in the capital markets. Once you understand this, the current fervor for technology investing is no longer difficult to explain.
Investment has nothing to do with macroeconomics, but everything to do with geopolitics.
China-US relations will shape the investment landscape for decades to come. Geopolitics has played a major role in shaping the hunger and anxiety of our times, fundamentally reshaping the way we invest.
What, then, lies at the heart of China's hunger and anxiety?
The Fourth Industrial Revolution is already underway, yet China has not fully overcome the technological shortcomings left by the Third. There is no time to lose.
This is why some people wonder: Why do Chinese computing chip companies command such high valuations when their technologies still lag so far behind NVIDIA's? Why does NVIDIA trade at just 50 times earnings, while a company hailed as "China's answer to NVIDIA" commands a multiple of 300?
To me, this gets the logic exactly backward.
It is precisely because these companies cannot catch up with NVIDIA in the near term that they command a higher strategic premium. The wider the technological gap, the greater the strategic value.
The further something lies beyond our reach, the stronger our hunger. The harder it is to catch up, the deeper our anxiety. If China were to achieve a complete breakthrough in computing chips one day, valuations might actually come down.
Where can one find China's most spectacular natural landscapes?
Much of the answer, I believe, lies in and around the Hengduan Mountains: the Meili Snow Mountains, Jade Dragon Snow Mountain, Mount Gongga, Mount Siguniang, Jiuzhaigou, and many others. Vast differences in elevation and deep fault lines have given rise to landscapes of extraordinary grandeur.
Hard-tech investing follows a similar logic.
Technological gaps, discontinuities in capabilities, and missing links in industrial systems: a leap in difficulty brings a leap in valuation, and a successful breakthrough can, in turn, bring a leap in returns.
This logic extends well beyond computing chips. It is equally evident in memory semiconductors, commercial spaceflight, and other sectors where China still faces substantial technological gaps with other countries.
It was precisely this conviction that led CoStone Capital, starting in 2016, to decisively focus its investments on three areas: hard tech, emerging industries, and life sciences and healthcare. In this context, "hard tech" refers specifically to important industries in which China faces a technological gap with the United States.
Thanks to this forward-looking strategy, CoStone Capital established an early presence across the full value chains of key sectors, including semiconductors, artificial intelligence, and robotics.
Looking ahead, the frontiers of technological progress and industrial upgrading are boundless. Nor can the gaps in hard technology be closed overnight. The twin windows of opportunity presented by technological innovation and the development of homegrown alternatives to foreign technologies have only just begun to open.
The road ahead is long, but the future holds immense promise.
As an investment firm, CoStone Capital will continue to invest where the hunger and anxiety of each era run deepest, move forward with the tensions that shape our times, and extend our reach toward the most challenging—and most important—frontiers.
Spring 2026