Revenue surpasses the 3 billion threshold, Marubi Co. faces the dilemma of "traffic tax" where income increases but profits do not

On April 1st, Marubi Biotech (603983.SH) opened lower, closing at 26.11 yuan per share, down 1.47%. The previous day, Marubi Biotech released its 2025 annual report, revealing a situation where the company’s performance shows increased revenue but no profit growth, reflecting the brutal reality of the current cosmetics industry fighting in the red ocean of traffic acquisition costs.

According to the data disclosed in the annual report, in 2025, Marubi Biotech achieved operating revenue of 3.46B yuan, an increase of 16.48% year-on-year; however, net profit attributable to the parent was only 247 million yuan, a significant decrease of 27.63% year-on-year; net profit after non-recurring gains and losses was 231 million yuan, down 29.2%.

Looking at quarterly changes, the trend is even less optimistic. According to Tonghuashun iFinD data, Marubi Biotech achieved revenue of 1.01B yuan in the fourth quarter, a quarter-on-quarter increase of 47.13%, but a year-on-year decrease of 0.84%; meanwhile, net profit attributable to the parent was only 3.3469 million yuan, a sharp decline of 96.75% year-on-year, and also decreased by 95.18% quarter-on-quarter.

From the profit statement data, the significant increase in operating expenses is a major reason for the profit decline. In 2025, Marubi Biotech’s gross profit margin was 74.29%, which essentially maintained the level of previous years, even slightly increasing.

The main issue lies in sales expenses. In 2025, the company’s sales expenses reached 2.06B yuan, an increase of 25.8% year-on-year; the proportion of operating revenue increased by 4.41 percentage points to 59.45% from the previous year’s 55.04%. Additionally, management expenses also increased by 48.36%, reaching 161 million yuan, which the company explained was due to increased depreciation and amortization costs from the completion of Marubi Tower.

In the annual report, Marubi Biotech explained the year-on-year decrease in net profit attributable to the parent as mainly caused by high online traffic and promotion costs, as well as increased depreciation and amortization from Marubi Tower, leading to growth in sales and management expenses.

Notably, the sales expenses in the fourth quarter of 2025 were particularly substantial. According to Tonghuashun iFinD data, Marubi Biotech’s sales expenses in the fourth quarter reached 642 million yuan, setting a new quarterly high since the company’s listing in 2019. However, whether looking at year-on-year or quarter-on-quarter, revenue growth did not keep pace with the growth of sales expenses, and the proportion of sales expenses to revenue continued to rise.

Considering that the fourth quarter includes the important sales event “Double Eleven” in the beauty industry, in today’s environment where e-commerce channels are highly relied upon in the cosmetics industry, this surge in sales expenses leading to increased revenue but no profit growth may indicate that the company is paying higher “customer acquisition” costs to top platforms and live-streaming influencers.

Meanwhile, Marubi Biotech’s brand development may also be facing an unbalanced growth situation. The annual report shows that the Marubi brand achieved operating revenue of 2.55B yuan, an increase of 23.94% year-on-year.

The PL Lianhuo brand, on the other hand, appears to have ended its rapid growth and entered a bottleneck period. In 2025, the PL Lianhuo brand achieved operating revenue of 906 million yuan, roughly flat year-on-year. In 2024 and 2023, the revenue growth rates for the PL Lianhuo brand were 40.72% and 125.14%, respectively.

By defining “biotechnology” as the core strategy, Marubi Biotech continues to increase its investment in research and development. In 2025, the company’s R&D expenditure was 85 million yuan, an increase of 16.08% year-on-year, and this expenditure has maintained steady growth in recent years.