Shanghai Forest Cabin Cosmetics files for IPO in Hong Kong

Shanghai Forest Cabin Cosmetics Group, or Lin Qingxuan, a leading brand in China's domestic skincare market, has filed its IPO prospectus and plans to go public in Hong Kong, amid fierce competition in the skincare oil market.

On Dec 2, the Hong Kong stock exchange disclosed updated IPO application documents from Forest Cabin, marking its first attempt to go public. In its filings, the company positions itself as "China's first high-end domestic skincare stock", a bold claim in a market long dominated by global players such as L'Oreal and Estee Lauder.

Behind that ambition sits a highly concentrated business model. Forest Cabin's signature Camellia Essence Oil accounted for nearly 40 percent of total revenue in 2024 and 45.5 percent in the first half of 2025, underscoring the brand's dependence on a single star product to drive growth and profitability.

The company has also quietly adjusted its corporate identity to better match that focus. Earlier this year, it changed its registered name from Shanghai Forest Cabin Biotechnology Co Ltd to Shanghai Forest Cabin Cosmetics Group Co Ltd. The move signals a clearer positioning as a consumer beauty company rather than a technology-driven biotech firm.

Founded in 2003, Forest Cabin spent nearly a decade without clear momentum. Its turning point came in 2012, when management pivoted toward camellia-based skincare and introduced the concept of "skincare through oils", a niche segment that was still underdeveloped in China at the time.

The launch of Camellia Essential Oil in 2014 proved decisive. The product has since ranked first in China's facial oil retail sales for 11 consecutive years, according to the company.

That early-mover advantage has translated into a rare foothold in China's premium skincare segment for a domestic brand.

Data from consultancy CIC show that, based on 2024 retail sales, Forest Cabin ranked first among high-end domestic skincare brands in China and was the only local label to enter the country's top 15 high-end skincare brands overall, a list otherwise populated by international names.

Financially, the company's recent trajectory is striking. Revenue climbed from 691 million yuan ($97.75 million) in 2022 to 1.21 billion yuan in 2024, a compound annual growth rate of 32.3 percent. In the first half of 2025 alone, sales reached 1.05 billion yuan, nearly double that from a year earlier.

Profitability has improved even faster. Forest Cabin swung from a net loss of 5.93 million yuan in 2022 to a net profit of 187 million yuan in 2024.Net income for the first half rose to 182 million yuan, almost matching the prior full-year result.

Much of that profit is underpinned by unusually high margins. Camellia Essential Oil's gross margin rose from 81.7 percent in 2022 to 86.2 percent in the first half of 2025, pushing the company's overall gross margin above 82 percent. Such figures stand out in a sector where global competitors have increasingly faced margin pressure.

Yet the same model raises questions. Forest Cabin's heavy reliance on marketing relative to research and development has drawn scrutiny as it approaches investors. Sales and distribution expenses surged 100.2 percent year-on-year to 580.6 million yuan in the first half of 2025, accounting for 55.2 percent of revenue, up sharply from 40.1 percent for full-year 2024.

An investment platform under the French beauty group L'Oreal acquired about 2.75 percent of Forest Cabin in May through a fund, according to the prospectus. The stake is widely seen as an endorsement of domestic brands' growth potential, but it also highlights intensifying competition.

Recently, L'Oreal announced a minority investment in another Chinese skincare brand, Lan, which also emphasizes oil-based skincare and is Forest Cabin's closest rival in facial oil sales. Lan has quickly become a leader in the facial oil segment, ranking first in national facial oil sales for two consecutive years (2023 and 2024), according to consultancy Frost & Sullivan. During this year's Nov 11 shopping festival period, Lan remained the top-selling brand in the facial oil category, selling over 400,000 bottles across all channels.

The parallel investments suggest a portfolio-style strategy by the global giant, hedging its bets across competing local champions.

The timing may be favorable. Consumer demand for high-end anti-wrinkle and firming skincare products is accelerating, Forest Cabin pointed out in its prospectus. CIC estimates the high-end anti-aging skincare market will expand from 59.4 billion yuan in 2024 to 155.5 billion yuan by 2029, with oil-based skincare emerging as one of the fastest-growing subcategories.