By Li Hongmei

Two lingerie companies of the Chinese mainland recently submitted their filings with Hong Kong authorities for an initial public offering (IPO), the Chinese-language Hong Kong Economic Journal reports.

The newspaper reported on Feb. 10, that Cosmo Lady, which has outlets in over 800 cities across the mainland, and Chaoying - a lingerie material supplier to American brand Victoria's Secret - both submitted their IPO application before the Chinese New Year.

The two companies operate with different business models, so the newspaper looked to two other companies already listed in Hong Kong to offer investors some insights into the industry.

Hong Kong-based Embry Holdings, which sells lingerie under its own brand name, posted a net profit of 184 million yuan (US$30 million) and displayed stable profitability between 2008 and 2012, with profit margins recorded between 9.8% and 14.2%, the newspaper stated.

Top Form International, a contract lingerie manufacturer headquartered in Hong Kong, on the other hand, posted losses of 4.3 million yuan (US$709,000) in the fiscal year ending June 2013.

Among the two IPO candidates, the newspaper said, Cosmo Lady has tried to build up its own brands, even hiring top Taiwanese model Lin Chih-ling to front their campaign.

The newspaper questioned such an approach, pointing towards the risk of the brand getting outshined by the fame of the celebrity hired to endorse it. The newspaper cited the success of Victoria's Secret, saying the brand, which began its annual lingerie show - now a major fashion event - in 1996, has managed to create stars among the models it has hired to display its products.

Although there are other brands trying to grab a market share through various marketing tactics, such as lower prices, custom-made designs and sending out products before payment, the newspaper said, they will find it hard to challenge Victoria's Secret, which has successfully transformed itself.