On February 12, the National Equities Exchange and Quotations (NEEQ) announced the halt of Shandong Linsen Bio-products Co., Ltd. from stock trading starting February 13, marking it as the first cosmetic company to delist in 2025. Linsen Bio once thrived during its peak in 2022, boasting a revenue of 161 million RMB with a staggering 83.33% increase in net profit year-on-yearYet, the company’s fortunes have declined, leading to its final exit from the capital marketThis trajectory is not only indicative of the company's struggles but also reflects deeper trends and challenges within the industry itself.

Linsen Bio, founded in 2005 by entrepreneur Yu Jingtang, offered a range of products centered around plant-based skincare and extractsIt generated its revenue primarily through the sale of cosmetics, raw materials, biological agents, and functional protein peptidesThe company went public on the NEEQ in 2018, but its financial performance has exhibited significant volatility since thenRevenue figures for the years 2018 to 2020 fluctuated dramatically, ranging from 31.81 million RMB to 68.36 million RMB, with the company only returning to profit in 2020, netting 4.55 million RMB after two years of lossesYet overall, there was no noticeable revenue growthThe year 2021 marked a turning point, as revenues soared to 122 million RMB, a staggering increase of 284.72% year-on-year, leading to net profits of 7.82 million RMB, largely due to substantial exports and sales within China.

2022 continued the upward trend, with revenue reaching 161 million RMB and net profits surpassing the 10 million RMB mark for the first time at 14.34 million RMBHowever, the landscape changed abruptly in 2023, with Linsen Bio experiencing a catastrophic drop in revenue by 85.99% to just 22.58 million RMB and incurring a net loss of 5.46 million RMBThe decline continued into the first half of 2024, with revenue dropping to 6.25 million RMB—a further decline of 38.10%—and additional losses mounting to 1.01 million RMB

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Alarmingly, on October 16, 2024, Linsen Bio announced its intentions to delist, and trading was suspended on November 1.

The dramatic fall in Linsen Bio's performance is intricately linked to a significant downturn in one of its key business segments: plant-based skincare productsBetween 2018 and 2020, the revenue from plant-based skincare hovered around 2 million RMB, accounting for less than 10% of total salesHowever, this segment witnessed exponential growth in 2021, generating 86.68 million RMB, a phenomenal increase of over 4,200%, and representing 71.02% of total revenueThis upward trend continued in 2022, with revenue surging another 61.37%. Yet, in 2023, revenue from this crucial segment plummeted by 98.01% to just 2.78 million RMB; and in the first half of 2024, it dwindled to 389,600 RMB—a decline of 79.17%, now accounting for only 5.6% of total salesPreviously popular brands under Linsen, such as Tianyuan Wusha, struggle to maintain any significant sales presence, as only sporadic products are available on platforms like Taobao, lacking any official brand store.

Simultaneously, the unexpected arrest of founder and chairman Yu Jingtang in April 2023 for allegedly interfering with drug management laws contributed to the company's instabilityThe Jiangbei District Public Security Bureau acted on this case, leading to immediate legal and operational repercussions for the companyJianghai Securities highlighted the risks posed by Yu's inability to perform his duties, which adversely affected corporate governance and day-to-day operationsIn both the 2023 annual report and the first half of 2024, Linsen Bio noted the impact of the arrest of its major shareholder and actual controller, emphasizing how personal actions have significant adverse ramifications on production and salesBy June 2024, Yu and his wife collectively held 92.48% of the company’s shares, making their presence as co-controlling shareholders even more critical amidst the turmoil.

The landscape for the cosmetics industry is rapidly changing, and with Linsen Bio’s exit, it serves as a stark reminder of the impermanence of market positions

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