Shanghai Jiahua announced that in order to further focus on its main business, it plans to sell 19% of its shares in Sephora Shanghai and 19% of Sephora Beijing shares to Sephora Asia for 70 million euros. Sephora Shanghai and Sephora Beijing were established in 2004 and 2006 respectively. They are joint ventures between Shanghai Jiahua and Sephora Asia to operate Sephora's online and offline business in China. Sephora Asia holds 81% of the joint ventures and Shanghai Jiahua holds 19% of the shares. Sephora Asia is a wholly-owned subsidiary of LVMH Group. From 2023 to 2025, Shanghai Jiahua lost profits and losses on investment in these two companies for three consecutive years. As of the announcement date, the book value of Shanghai Jiahua's long-term equity investment in the two companies has been written down to zero, that is, there is no value on the book. After the transaction is completed, Shanghai Jiahua will no longer hold its shares and is expected to increase the company's post-tax investment income by about RMB 474 million. The deal also resulted in an agreement to avoid competition in the industry. Within two years from the date of delivery, Shanghai Jiahua and its subsidiaries are not allowed to directly or indirectly participate in or operate a multi-brand retail store in China. However, they can distribute their own cosmetics through single-brand cosmetics retail stores, department store counters, and multi-brand stores owned by the company that specialize in selling self-produced products.

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