Bid farewell to the growing pains, Shanghai Jahwa enters a new growth cycle

Ask AI · How do Shanghai Jahwa’s four focus strategies drive a turnaround in performance?

By Yun Tan

Over the past few years, amid round after round of intense competition, the century-old domestic brand Shanghai Jahwa’s strategy seems to have gradually lost its way and been thrown off the fast track.

How to reverse the downturn is an urgent question that Shanghai Jahwa needs to answer.

Judging by the 2025 answers already submitted, after the pivotal year of strategic reform, this long-established personal care brand shows signs of “reviving vitality.”

Turning losses into profits for the full year, and achieving profitability even after excluding non-recurring items; the channel reform has produced visible results, brand building has become increasingly mature, the big single-product strategy has gained market recognition, and the “four focus” strategy is being steadily advanced.

After cutting out the rot, this ethnic brand—carrying both honor and history—has moved from the “painful reform period” into the “strategy realization period.”

【Get out of the low point, grow with quality】

“Growth is the hard truth—it can solve 80% of the problems.”

When Lin Xiaohai, a veteran in retail, took over as Chairman of Shanghai Jahwa and CEO, he said so.

After these two years of reform that required decisive cuts, this century-old personal care company has returned to a growth momentum.

Moreover, against the backdrop of the broader beauty market fragmenting, it is showing a trend of high-quality growth. The financial report shows that in 2025, Shanghai Jahwa achieved revenue of 6.317 billion yuan, up 11.25%, with a growth rate far higher than the industry’s overall 5.1% benchmark (National Bureau of Statistics data);

▲ Source: National Bureau of Statistics

Second, on the profit side, after shedding the historical burden, it successfully turned losses into profits, achieving attributable net profit of 268 million yuan, up 132.12%. This is also higher than the midpoint of the earlier performance forecast (268.5 million yuan). Profitability after excluding non-recurring items was also achieved, indicating that operating quality has improved effectively;

Third, cash flow and gross margin—indicators that better reflect the “real” quality of operations—are also rebounding. In 2025, operating cash flow was 801 million yuan, up 193.33% year over year; gross margin rose to 62.59%, the highest in 7 years, showing that the growth in performance has a high-quality “tone.”

▲ Shanghai Jahwa’s gross margin by year, Source: Company financial reports, Tonghuashun

Looking through the financial reports, under the “four focus” strategy, Shanghai Jahwa’s performance is quite impressive.

In particular, the three “hundred-million-yuan” (i.e., 100-million-yuan) big single products lead the growth. Previously, due to having too many SKUs, Shanghai Jahwa’s resources were scattered and efficiency was not high. After the new management took office, it proposed a “focus” strategy—by 2024 alone, it compressed the number of SKUs from over 10,000 to about 3,000, and the following year further cut SKUs by nearly 30%.

▲ The three 100-million-yuan big single products

Lin Xiaohai also emphasized: “In the online era, big single products are the key entry point for a brand to enter consumers’ minds.”

Especially in the digital consumption era, creating one or more evergreen, breakout big single products is crucial for consumer companies—especially beauty and cosmetics companies—to continuously shape longevity.

At present, Shanghai Jahwa has successfully built three major 100-million-yuan single products: Six God mosquito-repellent lozenges, Yuze anti-acne moisturizer (Second Generation), and Herborist New Qibai Whitening Mud Mask (Big White Mud). Among them, Herborist Big White Mud’s full-year GMV exceeded 200 million yuan; after Yuze anti-acne moisturizer (Second Generation) refreshed and re-launched, it captured double-digit growth; Six God mosquito-repellent lozenges precisely seized outdoor demand trends and Z-generation consumption trends, effectively expanding its customer base.

While driving performance growth, the “big single-product strategy + potential breakout products” continues to enhance brand influence, helping the company ride out cycle fluctuations and achieve long-term development.

Meanwhile, the focus on an online strategy has achieved notable results: online business has become the core growth engine, and domestic business online-channel revenue increased 36.9% year over year.

Lin Xiaohai revealed, “In 2025, the share of the company’s domestic business online revenue was 44.4%. Since our still-absolute main brand Six God still relies mainly on offline channels, offline remains the larger portion for now. But the online share has already increased by 7 percentage points, and the pace of increase is very fast.” Other brands rely mainly on online: Yuze’s online share is 85%, and Herborist’s online share is also as high as 75%. With strategic efforts ramping up, almost all brands in the company achieved steady growth online, and the overall picture shows a vigorous upward development trend.

Second, the company’s operating efficiency has also improved significantly. Inventory at period-end was 620 million yuan, down 7.6% year over year; accounts receivable were 570 million yuan, narrowing by 26.5% year over year, and inventory turnover improved to 3.65 times.

It can be seen that under the four focus strategy guidance—“focus on core brands, focus on brand building, focus on online presence, focus on efficiency”—Shanghai Jahwa not only achieved its phased repair targets, but also gradually moved out of the painful period and entered a virtuous cycle of brand-driven, steady growth.

【Fuel the four focuses to activate brand assets】

A performance report is an accounting-style representation of whether a company’s strategy is effective. Shanghai Jahwa’s performance rebound in 2025 is a manifestation driven primarily by the “four focus” strategy.

At the beginning of Lin Xiaohai’s tenure, he pointed out: “Previously, Shanghai Jahwa was a channel-driven company; in the future, Shanghai Jahwa must be brand-driven.”

Soon after, “focus on core brands” became the company’s central lever for reform. By sorting through brand assets, Shanghai Jahwa concentrates the main resources and strength to support its core brands. Through differentiated positioning, it aims for each brand to reach the top three in its subdivision.

As for “focus on brand building,” in the fourth quarter of 2025, the company established a “100-million-yuan Single-Product Club,” with the goal of reusing brand resources and operating experience to continuously build breakout products, striving to expand the matrix of 100-million-yuan big single products and drive development through a big single-product ecosystem.

In the consumer sector, “it’s not hard to build one big single product; what’s hard is the mechanism and methodology to continuously output breakout products.”

In recent years, Shanghai Jahwa missed the bonus period of the fast growth of e-commerce. Meanwhile, big single-product categories such as creams and serums have basically been taken by other companies. Lin Xiaohai believes that it is necessary to make precise choices among subcategories, build differentiated positioning, and only then can there be a chance to become a TOP3 in the category.

In addition to the three big single products that have already emerged, Shanghai Jahwa also has several new products showing momentum to challenge 100-million-yuan single products. Six God refreshing fragrance shower gel, Yuze oil-sensitive moisturizer (Second Generation), Yuze nourishing moisturizer, Herborist fairy-herb oil, and more could become potential contenders for “100-million-yuan single products,” validating the replicability of the big single-product strategy and the increasingly mature ability to incubate breakout products.

As for “focus on brand building,” each brand has been taking frequent actions. The Six God brand’s core driving force is “professional mosquito-repellent technology” combined with “rebuilding a younger image,” successfully creating a breakout hit and strengthening young communication through IP collaborations. Herborist, Yuze, Goff, and Qichu have all announced spokespersons, using celebrity effects to amplify brand visibility.

With “focus on online presence,” the company continues to deepen its efforts in online channels and has achieved steady, rapid growth in revenue.

Around the layout of interest e-commerce, Shanghai Jahwa has continuously strengthened content production and precision ad targeting capabilities, actively seizing the channel development trends in the personal care industry and continuously releasing online growth momentum.

After two years of exploration, Shanghai Jahwa’s capabilities have kept iterating and evolving, and it can now refine strategies based on the characteristics of different platforms.

In terms of “focus on efficiency,” over the past two years, by cutting off low-performing long-tail SKUs, resource allocation has become more precise. At the same time, by focusing on big single products and continuously outputting breakout products, the input-output ratio of resources has improved dramatically.

On the other hand, the company carried out a profound reshaping of its organizational structure—from shifting from a channel-driven model to a brand-driven model. It established an agile organization with brand as the combat unit and business divisions as the command center. These measures enhance combat strength and responsiveness in the face of fierce market competition.

In recent years, the beauty industry has undergone a transformation from “traffic-driven” to testing “hardcore capabilities” such as “brand-driven” and “product-driven.” The cases where former traffic darlings fell are still fresh in memory. Only by strengthening hard-core capabilities can the industry withstand cycle fluctuations.

As the “four focus” strategy continues to be implemented in depth, the effects of Shanghai Jahwa’s reforms are being released continuously, and the company’s deep brand accumulation will once again demonstrate competitiveness.

【Value realization, back to growth】

After the new management took office, it launched what can be described as “cutting out the rot” reforms in 2024. However, because it recorded an impairment loss of approximately 613 million yuan for goodwill, the company posted losses for the first time since its listing. But after this “deciding what to keep and what to let go,” the company moved forward lightened of burdens, paving the way for its “rebirth.”

With the burdens removed, the reform knife cuts deep and produces results. Judging from the 2025 performance, it is evident that Shanghai Jahwa’s reform has already begun to show effectiveness, indicating the company has found a relatively suitable “good remedy.”

However, in 2025, net profit after excluding non-recurring items is still some distance from the peak period.

▲ Shanghai Jahwa’s net profit after excluding non-recurring items by year, Source: Tonghuashun

Today’s beauty market is a track where changes iterate quickly. Consumer preferences, emerging e-commerce platforms, biotechnology, and approaches to brand promotion are all changing at every moment. How to help a century-old brand regain vitality in the new era is a question that every Shanghai Jahwa executive must think about.

We must both inherit the classics and iterate with innovation. The key lies in the effectiveness of strategy execution on the ground; the core is the continuity of execution.

Entering 2026, the company’s growth path is already clear: build a clear combination of “brand—big single products—channels,” and establish a growth logic driven by brand.

Since 2026, Shanghai Jahwa’s core brands have not only kept making moves, but also delivered results.

Six God’s classic floral dewdrop (Tianlu) refreshes its packaging and is now on the market, with higher recognizability and improved sense of quality; Yuze officially launched a new product, the Special Soothing Moisturizer (Te Run X), and based on the PBS patented technology, it innovatively applies fermented wormwood oil, further improving the layout of the repair category;

Herborist’s core single product “Xiancao oil” since its launch has continuously topped Tmall’s essence-oil new product charts and ranked TOP1 in beauty and skincare charts in Taobao livestream rooms. In multiple livestreams since 2026, it achieved GMV of over 10 million yuan (after adjusting), showing strong potential for big single products;

Last year, Meijiajing introduced a new product, “Bee-Glue Fragrance Hand Cream.” It ranked among the hot-selling lists in Tmall’s hand cream new product chart right after launch, reshaping the brand image of “hand-cream expert.” In addition, its average order value has stronger advantages, and it is expected to improve profit margin space.

From the perspective of the capital market, Shanghai Jahwa has experienced a round of market fluctuations, but there are signs that its performance has hit bottom and fundamentals have improved.

Looking back, Shanghai Jahwa’s lingering problems lie in strategic wavering and frequent management changes, which caused reform strategies to lose focus and also failed to find accurate solutions in time. Now, the “four focus” strategy has shown solid therapeutic effects, and the company’s business flywheel has begun to operate in a healthy cycle—its return to a growth era is worth期待.

The company’s guidance for 2026 performance is still for revenue growth in the teens (two digits).

Under Lin Xiaohai’s leadership, this century-old company through ups and downs has shown investors the possibility of regaining vitality.

Disclaimer

This article involves content related to listed companies. The author provides personal analysis and judgment based on information disclosed by the listed companies in accordance with their legal obligations (including but not limited to temporary announcements, periodic reports, and official interaction platforms, etc.). The information or opinions in the article do not constitute any investment or other commercial advice. The stock market observation does not assume any responsibility for any actions taken as a result of adopting this article.

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