Shanghai Jahwa (600315.SS) disclosed its 2026 interim report on the evening of August 19, reporting first-half revenue of 3.79 billion yuan (approximately $564.8 million), up 8.99% year-on-year; net profit attributable to shareholders of 381 million yuan (approximately $56.8 million), up 43.35%; and non-GAAP net profit of 352 million yuan (approximately $52.4 million), up 58.92%. The company also announced plans to sell its 19% stakes in Sephora Shanghai and Sephora Beijing to Sephora Asia for a combined consideration of 70 million euros (approximately 555 million yuan, or $82.7 million), fully exiting an equity investment held for more than two decades.<\/p>\n
On a quarterly basis, the second quarter was notably stronger: revenue grew 12.4% year-on-year, net profit surged 226.7%, and non-GAAP net profit rose 195.6%. Gross margin expanded by roughly 3 percentage points year-on-year to 66.3%, driving both net profit and non-GAAP net profit to decade highs.<\/p>\n
Beauty segment leads, online channels contribute significantly<\/p>\n
Growth was uneven across business lines. The beauty segment posted first-half revenue of 1.03 billion yuan (approximately $153.9 million), up about 38.2% year-on-year \u2014 the fastest-growing segment. Personal care revenue reached 1.74 billion yuan (approximately $259.8 million), up about 9.7%. By contrast, the innovation business recorded revenue of 331 million yuan (approximately $49.3 million), down about 24.2%, while overseas business revenue came in at 681 million yuan (approximately $101.5 million), down about 3.0%.<\/p>\n
The company attributed the profit improvement primarily to a product mix shift toward higher-margin beauty products, procurement cost optimization, and production efficiency gains, along with factors including a refund of prior-year U.S. tariffs on overseas business and higher investment income from associates.<\/p>\n
On the channel front, online channels for the company’s China domestic business grew over 40% year-on-year, with their share of domestic business revenue rising by more than 9 percentage points to above 45%. Online growth for both beauty and personal care exceeded 50% year-on-year. Core brands performed particularly well online: Liushen’s online sales rose over 50%, Herborist’s online sales jumped over 80%, and Dr.Yu’s online sales climbed over 30%, with Douyin and Kuaishou platforms showing significant growth.<\/p>\n
At the brand level, the company continued to deepen its “four focuses” strategy: focusing on core brands, brand building, online channels, and efficiency. Liushen, Herborist, and Dr.Yu \u2014 the three core brands \u2014 were the main growth drivers. Blockbuster single products continued to gain momentum: GSV for Liushen’s Mosquito Repellent Egg 3.0 rose over 150% year-on-year, Herborist’s Big White Clay Mask GSV rose over 120%, Dr.Yu’s Dry-Sensitive Cream GSV rose over 60%, and Dr.Yu’s Oil-Sensitive Cream GSV rose over 80%.<\/p>\n
On brand building, Liushen entered its sixth year of deep collaboration with global brand ambassador Xiao Zhan, while also announcing brand ambassador Tian Jiarui and “youthful freshness” ambassador Mu Zhicheng, expanding its roster of next-generation celebrity endorsers. Dr.Yu held a new product launch at the Jinshanling Great Wall early in the year and established China’s first artemisinin-based daily chemical raw material demonstration base in Yongzhou, Hunan in April. Herborist created the “Long Time No See, China White” art exhibition and partnered with IPs including Shangchengshi and Heaven Official’s Blessing for diversified collaborations.<\/p>\n
Marketing spend surges, operating cash flow under pressure<\/p>\n
Despite the strong profit performance, the sharp increase in marketing investment warrants attention. First-half selling expenses totaled 1.79 billion yuan (approximately $266.7 million), up 17.35% year-on-year \u2014 outpacing revenue growth. The selling expense ratio stood at approximately 47.2%, up about 3.4 percentage points year-on-year. The company said this reflects proactive increases in brand and online investment, which are expected to lay the foundation for sustainable future growth.<\/p>\n
Meanwhile, net operating cash flow was 397 million yuan (approximately $59.1 million), down 41.81% year-on-year. The company explained that the decline was mainly related to front-loaded brand investment and higher advertising and marketing expenses. The management expense ratio fell by 0.9 percentage points, and accounts receivable declined 7.5% year-on-year, indicating continued improvement in efficiency management.<\/p>\n
From a longer-term perspective, Shanghai Jahwa has now posted five consecutive quarters of positive year-on-year non-GAAP net profit growth since mid-2025, with the core business’s cash-generation capability gradually strengthening and the continuity of its operational recovery becoming established.<\/p>\n
Exiting Sephora: a 20-plus-year investment draws to a close<\/p>\n
The Sephora stake sale, disclosed alongside the interim report, marks the end of Shanghai Jahwa’s capital partnership with Sephora spanning more than two decades.<\/p>\n
According to the announcement, Shanghai Jahwa plans to sell its 19% stakes in Sephora Shanghai and Sephora Beijing to Sephora Asia for a combined consideration of 70 million euros, equivalent to approximately 555 million yuan. Upon completion, Shanghai Jahwa will no longer hold any equity in the two companies. The transaction remains subject to shareholder approval and foreign exchange registration procedures.<\/p>\n
The investments began in 2004 and 2006 respectively, with Shanghai Jahwa contributing a total of 55.09 million yuan (approximately $8.2 million) at the time. However, Sephora’s China business has underperformed for an extended period. Over the past three years, the company has cumulatively recognized investment losses of approximately 235 million yuan (approximately $35.0 million) from the two Sephora entities, and the book value of both long-term equity investments has been written down to zero. In 2025, Sephora Shanghai and Sephora Beijing posted a combined net loss of approximately 504 million yuan (approximately $75.1 million); in the first quarter of 2026, the two companies together achieved a modest profit.<\/p>\n
The two 19% stakes were appraised at a combined value of approximately 548 million yuan (approximately $81.6 million), with the final transaction price set at 555 million yuan. If the deal is completed, Shanghai Jahwa expects to book after-tax investment income of approximately 474 million yuan, with the final amount subject to audit results.<\/p>\n
Notably, this gain exceeds the company’s entire first-half net profit attributable to shareholders. However, analysts pointed out that this is a one-time investment gain from an equity disposal and should not be equated with the sustainable profitability of the core business.<\/p>\n
MetricH1 2026YoY ChangeRevenue3.79 billion yuan+8.99%Net profit attributable to shareholders381 million yuan+43.35%Non-GAAP net profit352 million yuan+58.92%Gross margin~66.3%+3 pct ptsSelling expenses1.79 billion yuan+17.35%Net operating cash flow397 million yuan-41.81%<\/p>\n
Note: Data sourced from the company’s 2026 interim report.<\/p>\n
Key areas to watch<\/p>\n
For Shanghai Jahwa, the interim report shows improvement in core business operations, but growth remains concentrated in the beauty segment and is accompanied by heavy marketing spend. Following the exit from the Sephora equity investment, market observers will focus on three areas: whether the beauty segment’s high growth can be sustained, whether the innovation and overseas businesses can stabilize and recover, and whether revenue growth can be more consistently converted into operating cash flow.<\/p>\n
Data from China’s National Bureau of Statistics shows that retail sales of cosmetics by enterprises above designated size grew 6.3% year-on-year in the first half of 2026. Shanghai Jahwa’s China domestic business revenue reached 3.11 billion yuan (approximately $463.4 million), up 12.03% year-on-year, outperforming the broader industry. However, since the company also covers personal care and other categories, its figures are not directly comparable to the cosmetics retail sales statistical scope.<\/p>\n
Looking at the brand portfolio, beyond the three core brands, Shanghai Jahwa is also advancing differentiated positioning for brands including VIVE, GF, Maxam, Diancui, and Giving in their respective segments. GF achieved double-digit growth in the first half, with its men’s sunscreen category topping JD.com’s sunscreen repurchase and positive review rankings during the 618 shopping festival. Diancui is focused on the light medical aesthetics home skincare segment, with its new-generation peptide line featuring cyclo-dipeptide-1, a peptide-based cosmetic ingredient newly registered by Shanghai Jahwa. The subsequent performance of these brands will determine whether the company can cultivate additional growth engines beyond beauty.<\/p>\n","protected":false},"excerpt":{"rendered":"Shanghai Jahwa (600315.SS) disclosed its 2026 interim report on the evening of August 19, reporting first-half revenue of…\n","protected":false},"author":2,"featured_media":67656,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12718],"tags":[41798,41797,41796,4955,12733,41799,41795,41800],"class_list":["post-67655","post","type-post","status-publish","format-standard","has-post-thumbnail","category-sephora","tag-dr-yu","tag-herborist","tag-liushen","tag-lvmh","tag-sephora","tag-sephora-asia","tag-shanghai-jahwa","tag-xiao-zhan"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/france\/wp-json\/wp\/v2\/posts\/67655","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/france\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/france\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/france\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/france\/wp-json\/wp\/v2\/comments?post=67655"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/france\/wp-json\/wp\/v2\/posts\/67655\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/france\/wp-json\/wp\/v2\/media\/67656"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/france\/wp-json\/wp\/v2\/media?parent=67655"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/france\/wp-json\/wp\/v2\/categories?post=67655"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/france\/wp-json\/wp\/v2\/tags?post=67655"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}