The parent company of the semi-annual brand is listed in Hong Kong. Can this "catfish" stir up the toothpaste market?

Our Daily News Reporter|Song Meilu Our Daily News Editor|Yang Yi

In 2020, a “flavored” mouthwash product launched by Semi—its brand name is 以参半—was on the market for 80 days, and sales topped 100 million yuan. Today, this “catfish” in the oral care market has come to the entrance of the Hong Kong Stock Exchange.

On March 27, oral care brand Semi’s parent company—Shenzhen Xiaokuo Technology Co., Ltd. (hereinafter referred to as Xiaokuo Group)—officially submitted its listing application to the Hong Kong Stock Exchange, with CMB International serving as the sole sponsor.

Public information shows that before founding the Semi brand, founder Yin Kuo mainly worked in areas related to smart hardware. The prospectus indicates that in 2015, Yin Kuo founded Xiaokuo Group. In 2018, he launched the oral care brand Semi. At first, Semi focused on the mouthwash category; in 2022, Semi expanded into toothpaste, and the group began to push into the toothpaste sector.

The prospectus of Xiaokuo Group shows that from 2023 to 2025, the company’s revenue was 1.096 billion yuan, 1.369 billion yuan, and 2.499 billion yuan, respectively. The three-year compound annual growth rate reached 51%, including a year-on-year growth of as high as 82.5% in 2025.

Behind the rapid growth in revenue, Xiaokuo Group’s financial profile shows clear characteristics of the “new consumption” trend. For example, in terms of gross margin, from 2023 to 2025, the company’s gross margin was 72.1%, 69.8%, and 71.9%, respectively, staying at a high level in the industry.

Looking at net profit, in 2023 and 2024, Xiaokuo Group recorded net surplus of 41.62 million yuan and 34.29 million yuan, respectively. In 2025, the company’s net loss was about 18.30 million yuan. The main reasons for the loss were changes in the book value of equity-settled share-based payments and the redemption liability. Of these, the former accounted for expenses of about 115 million yuan and is non-cash in nature. After removing these two factors, the company’s adjusted net surplus in 2025 was about 155 million yuan.

Judging from this, the company’s high gross margin has not translated into high profits, which is also related to its sales model. As reporters learned, Xiaokuo Group enters the market through online channels, adopts an OEM contract manufacturing outsourcing model for production, and focuses on brands and channels with a light-asset model—this is a typical sales mindset for technology products.

In fact, this sales model has also led to higher marketing expenses. The prospectus shows that from 2023 to 2025, Xiaokuo Group’s sales expense ratio remained at above 60% for a long time. Among them, marketing spending accounted for over 85% of sales expenses. Over these three years, the company’s marketing spending was about 570 million yuan, 720 million yuan, and 1.37 billion yuan, respectively. In terms of R&D expenses, in 2025, Xiaokuo Group’s R&D expenses were about 19.39 million yuan. R&D spending as a proportion of revenue was below 1%, which is lower than that of some established brands.

Judging from this, the structure of high gross margin and heavy marketing forms the core of Xiaokuo Group’s growth model. However, as platform traffic costs continue to rise, whether this model can continue to support growth has also become a focus of market attention.

In fact, the rise of the Semi brand is closely related to the online channel dividend. Data released by consulting firm Frost & Sullivan shows that in China’s oral care market, the share of online channels has increased from 25% in 2020 to about 40% in 2025, and is expected to rise to nearly 50% by 2030.

Previously, the competitive arena for traditional oral care brands was the offline shelf. Whichever company could keep the first row of shelves and secure more space in supermarkets and department stores would gain more market advantages. Under this sales logic, established brands such as Yunnan Baiyao, Colgate, Crest, and Pepsodent have already built solid competitive barriers.

When Yin Kuo started his business, he chose to bypass this high wall and expand the brand first through online channels. The first move made by the Semi brand was mouthwash—a category that had not yet been heavily laid out by big incumbents. Through internet traffic plays such as short-video seeding, influencer seeding, and livestreaming with direct sales, a Semi flavored mouthwash sold more than 100 million yuan in 80 days.

Against this backdrop, the Semi brand quickly attracted capital. IT Juzi shows that from 2020 to 2021, the Semi brand received funding across five rounds, including investors such as ByteDance, Innovation Workshop, and Tsing Capital.

Figure provided by IT Juzi

In 2022, Xiaokuo Group began to vigorously develop the toothpaste category. After several years of planning, toothpaste gradually became the revenue pillar of Xiaokuo Group. The prospectus shows that the company’s revenue contribution from its core oral care segment exceeded 90%, while the revenue share from professional and beauty oral care was about 7%.

In the past few years, as the online traffic dividend faded, the Semi brand faced a growth bottleneck. Against this backdrop, for Semi to become a national brand, it needed to enter supermarkets and get onto shelves. In 2023, Semi strategically laid out offline channels. Meanwhile, offline channels are also showing trends of change.

In 2024, Yin Kuo, in an interview with a reporter from The Daily Economic News, previously said that in the past, Chinese retail NKA (national large chain retail institutions) and LKA (local chain retail institutions) occupied the major retail formats in China. But in recent years, many discount stores and warehouse stores have emerged, and new retail formats centered on commerce carriers—such as Sanfu Department Store and Miniso—have gradually gained significant importance.

This change provides Semi with an opportunity to compete with traditional giants. “In the past, for those doing NKA, their aesthetics could not keep up with the new retail market. For an industry format like KKV with a shopping mall as the carrier, if you can’t create interaction with users in a more youth-oriented way, it’s hard to form direct purchase conversion.” Yin Kuo said.

The prospectus shows that from 2023 to 2025, Xiaokuo Group’s offline business contribution continued to rise, with its revenue share increasing from 5.5% to 19.7%.

In addition, according to statistics from Frost & Sullivan, in 2025, in the online toothpaste retail market, Xiaokuo Group ranked first in retail sales with a market share of 9.2%. In the offline toothpaste retail market, Xiaokuo Group ranked third in retail sales with a market share of 6.7%.

In fact, Xiaokuo Group’s expansion path differs from that of traditional oral care brands. For example, DengKang Oral relied on “Cold Sore Spirit” (Lengsuoling), a single big product, to support its business for nearly 40 years.

Today, with competition growing increasingly fierce, Xiaokuo Group believes that the deepening of consumer awareness of oral health drives the further segmentation of consumption scenarios, including care for infants and young children, oral care for sensitive mouths, gum health management, and care after orthodontics. These refined demands enable high-value functional and premium products to penetrate further, driving transformation in the industry. Against this backdrop, in oral care, Xiaokuo Group is not fixated on digging deep into a single category; instead, it continuously expands product categories and formats to meet the needs of segmented markets.

In September 2025, Xiaokuo Group began transforming into a “comprehensive daily chemical group,” launching a personal care brand—Little Arrow (小箭头)—focusing on hair and body care. As of the date the prospectus was disclosed, the brand’s cumulative retail sales exceeded 40 million yuan. The prospectus shows that currently Xiaokuo Group offers more than 500 SKUs (stock keeping units), covering oral and hair/body care products, and also has more than 300 reserved SKUs for future new product launches.

In response, some industry analysts point out that, in theory, the Semi brand could transfer its capabilities in e-commerce operations and brand communication to adjacent categories. However, the hair care and wash care track faces a new competitive landscape. International giants such as Procter & Gamble and Unilever have been deeply involved for decades, and local upstarts have also established their own “user mindsets.” If the listing on the Hong Kong Stock Exchange can be completed smoothly, it will provide Xiaokuo Group with more abundant capital support for channel expansion and category extension. But the scrutiny from the capital market will also come along with it.

Cover image source: Our Daily News Media Database

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