Nu Skin resumes China operations and share prices continue to rise

In light of the good news, the company’s share prices have also continued their upward march, following the steep fall seen since China authorities began an inquiry into allegations that the company was operating a pyramid scheme in the country.

Share prices almost tripled during the course of 2013 following a sharp increase in sales revenues from its skin care and beauty supplements in the China market.

Investigation led to big uncertainty for the company​

But when China regulators announced that they were launching an investigation into the company’s business practices in the country, the share price went into free fall for more than three months.

The company’s shares shed almost 40% of their value, a free fall that was turned around when China authorities confirmed that their investigation was concluded at the end of March, resulting in relatively modest fines for the company.

Following the announcement that Nu Skin was resuming its sales in China over the weekend, significant gains in share prices seen in the past month have been added to, with share prices gaining 3% on Monday to close at $89.

China watchdog concluded that sales staff were misinformed​

The country’s watchdog said that the fine targets practices that often rooted in how sales staff are trained, causing them to pass on the misleading information to the consumers.

The China State Administration for Industry & Commerce (SAIC) chose to fine Nu Skin a total of $540k and fine six sales staff a further $240K.

In 2013 mainland China became the company’s largest market, with a 32% share of its total revenues, which topped $3.1bn last year.