GIANT BIOGENE(2367.HK)：STRONG PERFORMANCE IN 2024-格隆汇

机构：招银国际
研究员：Jill WU/Cathy WANG/Miao ZHANG/Bella LI

　　Giant Biogene announced strong 2024 results, with revenue up by 57% YoY to RMB5.5bn. Revenue from skincare products and medical dressing increased by 62.5% YoY and 41.5% YoY, respectively. The increase in revenue proportion of skincare products led to a decline in GPM from 83.6% in 2023 to 82.1% in 2024. Online revenue increased by 70.0% YoY, with revenue contribution rising to 71.6%. Due to the increased proportion of online revenue and rising marketing costs on Tmall and Douyin, the Company's selling expense ratio increased by 3.2 ppts to 36.3% in 2024. Therefore, attributable NPM decreased by 4 ppts to 37.2%.
　　Comfy maintains robust growth with successful category expansion. In 2024, Comfy's revenue increased by 62.9% YoY to RMB4.5bn. We estimate that revenue proportion of collagen sticks and dressings decreased to below 30% each, with other products continuously achieving solid growth. We estimated Comfy Focus Cream generated revenue of over RMB200mn in 2024, and we expect it to potentially double this year. According to Moojing, in 2M25, Comfy maintained strong growth momentum, with total GMV on Tmall, JD.com, and Douyin increasing by 60% YoY. Notably, the lotion/cream category’s GMV on Tmall increased by over 240% YoY in 2M25. We think the successful launch of Focus Cream further validates Comfy's ability to create blockbuster products. With the continuous expansion of product categories, we expect Comfy to grow rapidly.
　　Collgene accelerated growth. In 2024, Collgene’s revenue increased by 36.3% YoY to RMB840mn, with 2H24 revenue increasing by 50.1% YoY. We think the growth acceleration was driven by 1) robust online sales growth (according to Moojing, Collgene’s total GMV on Tmall, JD.com, and Douyin increased by 103% YoY in 2024); and 2) headwinds from the revenue decline of Xi’an Chuangkecun business waning). We estimate that Collgene’s offline revenue only accounted for approximately 30% in 2024, and online sales gradually unleashed growth potential. According to Moojing, Collgene’s total GMV on Tmall, JD.com, and Douyin increased by over 180% YoY in 2M25, a significant acceleration compared to 2M24.
　　Approval of injectable products delayed. The product targeting moderate to severe neck wrinkles (Injectable Recombinant Collagen Filler) was granted priority approval in Dec 2024 but the product targeting forehead lines and crow’s feet, which was expected to be approved in 1Q25, remains pending. However, the Company has begun to prepare for commercialization and expand its medical aesthetics team. Leveraging its wide distribution network and brand strength in medical aesthetics from medical dressings and the newly launched “Intensive Repair” portfolios, we believe Giant Biogene is still well-positioned for long-term growth in medical aesthetics market despite approval delays.
　　Maintain BUY. We believe the successful expansion of product portfolios will drive Giant Biogene’s long-term rapid growth. Additionally, four injectable products are currently in the application phase and nearing commercialization. We raise our TP of HK$79.96 based on a 9-year DCF model (WACC: 10.9%, terminal growth rate: 3.0%) considering the strong performance in 2024 and long-term growth potential.