Competitive Intelligence Report

on Major Players of

Cosmetic Industry

Table of Content

1. Industry Overview

1.1 Industry Scale

1.2 Imports & Exports

1.3 Operation

1.4 Main Competitors

2．Major Players

2.1 Summary

2.2 History

2.3 Shareholders and Brief Introduction

2.4 Management

2.5 Operation

2.5.1 Sales Revenue（latest 3 years）

2.5.2 Main Business

2.5.3 Primary Products and Outputs

2.5.4 Buying Areas

2.5.5 Major Suppliers

2.5.6 Sales Areas

2.5.7 Major Clients

2.5.8 Equipment and Production Capacity

2.6 Structure Chart

2.7 Sales Channel

2.8 Financial Standing

2.8.1 Profit & Loss

2.8.2 Balance Sheet

2.8.3 Major Indicators

2.9 Comments

All amounts in this report are given in Renminbi Yuan unless otherwise stated.

Part One
Industry Overview

I. Industry Scale

II. Imports & Exports

In 2000, China totally export cosmetics 3,1885,582 kg，export value was USD 119,488,000；import cosmetics 4,197,934 kg, import value was USD 44,561,000.

l The top 5 export countries/areas:

l The top 5 import countries/areas:

Data source is from China Custom and compiled by ACMR.

III. Operation

2000, Unit: RMB 1,000,000

IV. Main Competitors

2000, Unit: RMB 1,000,000

Part Two

Major Players

I. Sample Cosmetics Co., Ltd.

Summary

History
Foreign Sample Co., Ltd. and Beijing LL Company jointly established the Sample-LL Cosmetic Co., Ltd. (SSS) in December 1991. The registered capital was 72.3 million yuan at that time and Foreign Sample Co held 65% shares.

In January 1993, subject put into production and its products entered the market in November 1994.

In December 1999, the registered capital was increased to RMB 94.3 million yuan.

Shareholders and Brief Introduction

The Foreign Sample Co., Ltd. is one of the world famous enterprises for manufacturing high-class cosmetic products. Since its establishment in 1872 as a drug store, through the development of over one hundred years, it has become a world leading company in the international cosmetics industry, with seven domestic factories and seven factories overseas and sales of its products in more than fifty countries. It is the largest cosmetics producer in Asia and the fourth largest in the world.

Beijing LL Company was one of the early factories in China to produce and sell cosmetics. It is recognized by the state as a pillar enterprise in the national cosmetics industry.

Management

Operation
1. Sales Revenue

2. Main Business

Cosmetics manufacture and sales; related beauty consulting and service.

3. Primary Products and Output

4.Material Sources

5.Major Suppliers
Japan XX Co., Ltd.

6.Sales Places

7.Major Clients
Beijing: Large-scale shopping centers, such as World Trade Center，SOGO，

Shanghai: Large-scale shopping centers, such Paris Spring, Pacific Department Store

8. Main Equipment and Production Capacity
Subject has 8 canning lines, 4 of which were made in China and the others were imported from Japan. The production capacity reaches 370 million bottles per year.。

Structure Chart

Sales Channels
1. Office (18)

Tianjin, Shenyang, Changchun, Dalian, Zhengzhou, Nanjing, Shanghai, Fuzhou, Changsha, Hangzhou, Wuxi, Chengdu, Kunming, Wuhan, Jinan, Hefei, Chongqing, and Nanchang

2. Branches

3. Agents/Dealers

It is Sales Section I & II and the offices around China that responsible for selling products. The company does not have any agents and dealers.

Financial Standing
1. Profit & Loss Sheet

2.Balance Sheet

Dec 31; RMB 1,000

3.Major Indicators

(Source: The Annual Report of Industry, 2000, State Statistical Bureau)

Profit of Sales = Pre-Tax Profit/Sales Revenue

Turnover of Total Assets = Sales Revenue/Total Assets

Profit Return = Pre-Tax Profit/Total Assets

Equity Return = Pre-Tax Profit/Equity

Debt Raito = Total Liability/Total Assets

Current Ratio = Current Assets/Current Liability

Quick Ratio = Current Assets-Inventories/Current Liability

Inventory Turnover Rate = Cost of Sales/Inventory

Receivable Turnover Rate = Sales Revenue/Accounts Receivable

Comments
l Subject is the first company invested by Japan Sample Co., Ltd. As one of the leading companies in this field, Japan Sample Co., Ltd. granted subject many advanced management experience and technology. The managers of subject are all experienced in this field, which is proved by the increasing sales and reasonable management system.

l Subject kept consecutive three profitable years at a much higher rate than the average of this sector, the capacity of profit gaining is strong. The debt ratio is 36.03% in 2000, and the current ratio and quick ratio is good in both 1999 and 2000. The capacity of paying off debts is good.

l The shareholder of subject holds a very famous brand in the world. There is a market with great potential in China. With the good image in domestic consumers, subject has the potential to develop.