500 yuan HBN, 250 yuan is advertising
Zebra Consumer Shen Tuo
A "post-80s" university teacher ventured into entrepreneurship and, in just five years, built the young brand HBN into one of China's top ten domestic skincare brands and the largest dermatology-grade domestic brand in China's improvement skincare market.
Recently, HBN's parent company, Hujia Technology, officially disclosed its prospectus, aiming for a listing on the Hong Kong stock market, which will mark another milestone in the brand's development history.
From a financial perspective, HBN has indeed demonstrated strong growth. However, its excessively high sales expenses, particularly in marketing, have resulted in a typical "high gross margin, low net margin" characteristic.
If HBN's sales cannot reduce its heavy reliance on advertising, Hujia Technology may face long-term growth challenges after going public.
University Teacher Crosses Over to Become No. 1
The story of Hujia Technology is one of a university teacher venturing into cross-industry entrepreneurship.
The company's founder, Yao Zhenan, 42, has a background in overseas study. In June 2006, he earned a bachelor's degree in graphic design from the University of Central Lancashire, UK, and in January 2008, he further obtained a master's degree in animation from the same university.
After graduation, Yao joined Shenzhen University as a faculty member. From June 2009 to September 2023, he served as a lecturer in the Department of Digital Media Arts and as a mentor for undergraduate and graduate students.
Despite having a stable and enviable job, Yao seemed restless. In 2014, he made his first entrepreneurial attempt by launching the sanitary napkin brand "Meize." Its core product, "Hunimei," bypassed traditional sales channels and directly connected with users through WeChat communities and membership systems, becoming a viral sanitary napkin brand.
After earning his first pot of gold from selling sanitary napkins, Yao turned his entrepreneurial focus to the more promising skincare sector. In 2019, the HBN brand was established.
Although China's skincare market is vast, it faces fierce competition from international giants and numerous domestic brands. From the outset, HBN chose differentiation. Specializing in improvement skincare, it emphasized "real efficacy" and was one of the first domestic skincare brands to promote the "AM Vitamin C, PM Retinol" skincare concept.
The "AM Vitamin C, PM Retinol" routine is a complementary daily skincare regimen that combines the brightening effects of vitamin C products during the day with the anti-wrinkle benefits of retinol products at night, supplemented by other professional improvement skincare products to maximize results through advanced active ingredients.
According to a CIC report, HBN has become a leading brand in China's retinol skincare segment. In terms of sales, HBN's retinol products ranked first in China for three consecutive years from 2022 to 2024. Its α-Arbutin Revitalizing Essence also ranked first in China's essence water category during the same period.
Positioned in the mid-to-high-end segment, HBN's full-size products range from hundreds to thousands of yuan, lower than international luxury brands but higher than most domestic skincare products.
By retail sales in 2024, HBN ranked tenth among domestic skincare brands and fourth among mid-to-high-end domestic skincare brands.
HBN Spends Over 50% of Revenue on Marketing
Its mid-to-high-end positioning has enabled HBN to achieve relatively high profitability.
The prospectus reveals that from 2023 to 2024 and the first nine months of 2025, Hujia Technology's gross margins were 76.6%, 73.4%, and 75.3%, respectively, higher than leading domestic skincare companies like Proya.
In the prospectus, HBN describes itself as China's leading "dermatology-grade" skincare brand to highlight its expertise in the improvement skincare category.
As of the end of September 2025, the company held 130 patents, including 21 invention patents, 95 design patents, and 14 utility model patents.
Led by a former university teacher, Hujia Technology excels in academic writing. As of the end of 2025, among domestic skincare brands, it ranked first in the number of papers published in SCI-indexed journals as the first author.
Although HBN emphasizes its "dermatology-grade" professionalism in the prospectus from various angles, its R&D spending is not higher than that of mainstream domestic skincare peers.
Data shows that during the reporting period, the company's R&D investment declined significantly. From 2023 to 2024 and the first nine months of 2025, R&D expenses were RMB 66 million, RMB 57.8 million, and RMB 40 million, respectively, with R&D expense ratios of 3.4%, 2.8%, and 2.6%.
However, in sales, the company often splurges to maintain growth. During the reporting period, sales and distribution expenses were RMB 1.268 billion, RMB 1.238 billion, and RMB 871 million, with sales expense ratios of 65.1%, 59.4%, and 57.6%, respectively. The largest portion was marketing expenses, including various ads and promotions. These expenditures were RMB 1.114 billion, RMB 1.049 billion, and RMB 721 million, accounting for 57.2%, 50.4%, and 47.6% of revenue in each period.
Simply put, if you spend RMB 500 on an HBN product, over RMB 250 of that goes toward the brand's advertising costs.
HBN's reliance on advertising is also evident in its supplier list. Most of its top five suppliers are marketing service providers and platform operators.
Heavy marketing spending has indeed driven growth for HBN. During the reporting period, Hujia Technology's revenue was RMB 1.948 billion, RMB 2.083 billion, and RMB 1.534 billion, respectively. Net profits were RMB 39 million, RMB 129 million, and RMB 145 million, while adjusted net profits were RMB 92 million, RMB 129 million, and RMB 145 million.
Due to its massive marketing expenses, HBN exhibits a typical "high gross margin, low net margin" profile. During the reporting period, its net margin was as low as under 2% and never exceeded 10%, significantly lower than major skincare peers.
If HBN's sales cannot break free from its heavy reliance on advertising, Hujia Technology may face persistent growth challenges after its IPO.
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