vrarcadesnearme| Shanghai Jahwa changes in coach: Pan Qiusheng resigns as chairman, former Gaoxin Retail CEO Lin Xiaohai takes over as general manager

In less than four years, Shanghai Jiahua has changed its coach again.

May 14, Shanghai Jiahua United Co., Ltd. (Shanghai Jiahua, 600315VrarcadesnearmeAccording to a notice, Pan Qiusheng applied to resign as a director, chairman, member of the board of directors' strategy and sustainable development committee, as well as a subsidiary holding company and a shareholding company for personal reasons, effective from the date of delivery to the company's board of directors; at the same time, the application for resignation as chief executive officer and general manager of the company will take effect from May 31, 2024. Before the election of the new chairman of the board of directors, Cheng Jianxin, a director of the company, will be elected as the acting chairman of the company to perform the duties of the chairman of the board of directors until a new chairman is elected.

In addition, the board of directors decided to appoint Lin Xiaohai as chief executive and general manager of the company for a term beginning on June 1, 2024, and nominated Lin Xiaohai as a candidate for director, which will be submitted to the general meeting of the company for consideration.

Shanghai Jiahua is one of the national enterprises with a long history in China's cosmetic daily chemical industry, with a history of more than 125 years. It was listed on the Shanghai Stock Exchange in 2001. The company is mainly engaged in the R & D, production and sales of skin care, home care, mother and baby products, the main brands include Baicaoji, Yuze, Gao Fu, Meijiajing, Dianjie, Shuangmei, Qichu, Tang Meixing, Liushen, Jiaan, etc., and cooperative brands include Pian Tsai Yi (Oral Care), Fangxin, Beatrice, etc.

As of May 14, Shanghai Jiahua News 21Vrarcadesnearme.49 yuan per share, up 0.66%, up 1.46% so far this year.

Lin Xiaohai "parachuted" into Shanghai Jiahua and used to be the CEO of Da Runfa's parent company.

Lin Xiaohai, who was born in 1971 and graduated from South China University of Technology, has accumulated 30 years of offline and online management experience in China's FMCG industry, according to the resume. Worked for Procter & Gamble from 1995 to 2016, responsible for oral care and maternal and child care, key account team, channel management, e-commerce team, marketing department, etc. Among them, he served as marketing president of Greater China in Procter & Gamble (China) Marketing Co., Ltd. from 2014 to 2016; vice president of Alibaba Group Holdings Co., Ltd. and general manager of Retail Communications Division from 2016 to 2020. He served as Executive Director and CEO of Gaoxin Retail Co., Ltd from 2020 to March 2024.

It is worth noting that on the evening of March 26th, Gao Xin Retail (06808.HK) announced that Lin Xiaohai had resigned as Gao Xin Retail Executive Director and CEO from March 26th, 2024, and had another appointment due to the need to be transferred back to Alibaba Group.

Less than four years after Lin Xiaohai stepped down as Gao Xin retail CEO, he said he would return to Ali, but two months later he returned to the make-up track and parachuted into Shanghai Jiahua. Does Shanghai Jiahua value its more than 20 years of work experience in the daily chemical industry, or is it expected to have more in-depth cooperation with Alibaba?Vrarcadesnearme?

In response, Shanghai Jiahua exclusively responded to thepaper.cn that Lin Xiaohai has many years of management experience in multinational consumer goods companies and China's FMCG industry, is good at driving transformation and change, and has strong strategic leadership and execution. It is believed that under the leadership of Lin Xiaohai, Shanghai Jiahua will actively embrace the new changes in the trend of retail consumption, speed up the pace of change and transformation, and work together to scale new heights. Ali is one of the important partners of Shanghai Jiahua, but this appointment has nothing to do with cooperation.

Pan Qiusheng quitVrarcadesnearmeThe four-year performance fell short of expectations, and the business with low gross margin was closed and transferred.

In the year when the reform of Jiahua in Shanghai was beginning to bear fruit, Pan Qiusheng, 51, chose to leave. Shanghai Jiahua said that during his tenure, Pan Qiusheng promoted organizational structure reform, brand building and ESG sustainable development, and the Shanghai Jiahua Board of Directors thanked him for his contribution during his tenure.

In April 2020, Pan Qiusheng was elected CEO of Shanghai Jiahua and chairman of the company in June of the same year. According to the reporter, Pan Qiusheng is the fourth head of Shanghai Jiahua after GE Wenyao, Xie Wenjian, and Zhang Dongfang, and the third head of "Ping an Department" after Ping an Department entered Shanghai Jiahua in 2011. Pan Qiusheng was the deputy director of the Strategic Development Center of China Ping an Insurance (Group) Co., Ltd. In 2011, Ping Pu Investment, a subsidiary of Ping an Trust, beat HNA and Fosun to buy a 100% stake in Shanghai Jiahua Group from Shanghai State-owned assets Supervision and Administration Commission for 5.109 billion yuan, but there were conflicts between the two sides. GE Wenyao, the former chairman of the board, resigned in 2013 and was replaced by Xie Wenjian, the former chairman of Johnson Medical China nominated by Ping an Department.

Four years ago, the capital market was also extremely optimistic about Pan Qiusheng's joining. After the announcement of his new appointment, Shanghai Jiahua rose by the daily limit for two consecutive days, and then continued to rise, with its share price rising by more than 60% in less than two months. This has something to do with Pan Qiusheng's background in the beauty industry. From 2015 to 2019, he served as China Commercial General Manager of L'Or é al's Volkswagen Cosmetics Department and Asia-Pacific Commercial General Manager. During his tenure, he helped the company realize the transformation of channel strategy, and the proportion of online business has increased significantly.

It is worth noting that there was a problem of "internal infighting" within the company due to the previous changes in the head of Shanghai Jiahua. Pan Qiusheng said at his first shareholders' meeting after taking office that he would not make a "campaign" adjustment to the company's organizational structure, but would adopt a "gradual" approach, "break down the departmental wall, adopt a merit-based culture, and give colleagues with better performance a chance. Those who do not perform well will leave."

At the end of last year, under the leadership of Pan Qiusheng, Shanghai Jiahua implemented the organizational structure adjustment of the department system, and set up the beauty and skin care and mother and child business department, the personal care and cleaning business department, and the overseas business department. The financial report shows that in the process of adjustment, the middle and high-level teams have also been replaced, recruiting and replacing 346 people throughout the year, speeding up the speed of category closed-loop decision-making and response to the market.

As the market capitalization leader of A-share cosmetics industry, Shanghai Jiahua has been in the doldrums since 2013, gradually losing its status as the leading cosmetics stock, and several changes of coach have not made Shanghai Jiahua a breakthrough. Pan Qiusheng's entry once made the market have new expectations for the development of Shanghai Jiahua. However, during the four years when Pan Qiusheng was at the helm, Shanghai Jiahua's performance also failed to meet the original expectations and goals many times. Revenue increased in 2021 compared with the same period last year, but in the following two years, revenue declined one after another, and the annual net profit hovered around 500 million yuan. The market capitalization is also lower than Pelaiya, Shangmei shares, Bettany and other domestic beauty makeup enterprises.

Shanghai Jiahua's annual performance over the years comes from wind

In 2023, under the influence of multiple internal and external factors, the scale of operating income fell short of expectations, at 6.598 billion yuan, down 7.16% from the same period last year; the net profit from home was 500 million yuan, an increase of 5.93% over the same period last year, of which the net profit from domestic business increased by about 75% over the same period last year. The financial report pointed out that the company reflected on the main reasons for the backward performance in the past, and made major adjustments last year in the aspects of company strategy, organizational structure, marketing innovation, talent echelon and sustainable development. At present, it is still in the adjustment stage, and the decline in performance is mainly due to the digestion of the labor pains and problems left over by history caused by strategic transformation. However, the performance in the first quarter of this year has improved to a certain extent, with revenue of 1.905 billion yuan, down 3.76% from the same period last year, and net profit of 256 million yuan, up 11.18% from the same period last year.

After determining the new strategy and growth curve, where will Shanghai Jiahua go in the future?

2023 is the year when Pan Qiusheng made the deepest adjustment to Shanghai Jiahua during his term of office. In addition to the adjustment of the organizational structure, in 2023, Shanghai Jiahuahai determined the strategy of focusing on categories with high gross margin, high growth rate and high brand premium in the next few years, gradually moving to the strategy of increasing the proportion of beauty and makeup business and improving the profitability of personal care business through differentiation, and shut down some businesses with low gross margin, low contribution and low growth.

Pan Qiusheng said at the 2023 results meeting that this adjustment has begun to move forward step by step in 2023. Although it will bring pressure on revenue in the short term, it will bring continuous improvement to the overall quality of our business.

As for the business plan for 2024, the financial report pointed out that the company strives to achieve double-digit growth in operating revenue this year compared with last year. In the business policy, it is mentioned to accelerate strategic adjustment. It includes business adjustment, shutting down loss-making and uncontrollable businesses, focusing resources on core businesses with high gross margin and high growth, and organizational adjustment, combining with the structure of the new division, promoting the adjustment of internal assessment mechanism, introducing "horse racing" mechanism, layer by layer transmission, and transferring responsibility to people. In addition, in terms of promoting business growth, the financial report mentioned that we should strengthen brand research and development and brand launch, improve self-research and substitution, strengthen the development of new retail business, and make up for the offline traffic gap.

Bai Yunhu, an expert in cosmetics industry management, said that since Ping an joined Shanghai Jiahua, three chairmen have been replaced in the past 10 years, leading to strategic and organizational instability and missing out on the "golden decade" of local cosmetics development. During this period, other domestic cosmetics enterprises keep pace with the times, grasp the trend of channel changes and user upgrading, achieve rapid development and quickly surpass Shanghai Jiahua. The "Pan Qiusheng era" of Shanghai Jiahua has come to an end, but the Ping an "dynasty" of Shanghai Jiahua is still going on, which means that the essence has not changed. In the future, perhaps the best choice to return to the "Chinese gene" that has been precipitated over the past century is to finally take the top spot.