Investment Rating - The report maintains a "Buy" rating for Giant Biogene (2367 HK) with a target price of HKD 52 0, implying a potential upside of 27 5% from the current price of HKD 40 8 [4][2] Core Views - Giant Biogene's 1H24 results exceeded expectations, with revenue and net profit growing 58 2% and 47 4% YoY, respectively, surpassing both the company's guidance and market expectations [2] - The strong performance was driven by the Kefumei brand, which saw a 68 6% YoY revenue increase, contributing 81 5% of total revenue [2] - Online sales grew 69 3% YoY, accounting for 69 7% of total revenue, reflecting the company's successful e-commerce strategy [2] - Management raised full-year guidance, expecting revenue growth slightly above 40% and adjusted net profit growth of around 35%, demonstrating confidence in achieving targets [2] - The company's long-term growth is supported by product matrix expansion and omnichannel development, with new products performing well during the 618 shopping festival [2] - The approval timeline for medical aesthetic products has been delayed to 1Q25 due to stricter regulatory requirements, but the impact on profitability is expected to be limited [2] Financial Performance and Forecasts - Revenue is projected to grow from RMB 3 524 million in 2023 to RMB 9 025 million in 2026, with a CAGR of 37 0% [3] - Net profit is expected to increase from RMB 1 452 million in 2023 to RMB 3 322 million in 2026, with a CAGR of 31 0% [3] - The company's gross margin remains strong, forecasted at 82 3% in 2024 and 81 9% in 2026 [3] - ROE is expected to stabilize around 32% from 2024 to 2026, down from 52 0% in 2022, reflecting the company's maturing growth profile [3] - The PE ratio is projected to decline from 25 7x in 2023 to 11 8x in 2026, indicating improving valuation attractiveness [3] Industry Context - Giant Biogene operates in the cosmetics industry, which is highly competitive, particularly in the online channel [2] - The company's focus on collagen-based products and medical aesthetics positions it well in the premium skincare segment [2] - The delay in medical aesthetic product approvals highlights the increasing regulatory scrutiny in the industry [2] Peer Comparison - Among covered cosmetics companies, Giant Biogene has a "Buy" rating, similar to Proya (603605 CH) and Betaine (300957 CH), while Huaxi Biotech (688363 CH) has a "Hold" rating [9] - The target price implies a 2024E PE of 19 8x, which is lower than some peers like Proya (24 4x) but higher than Betaine (14 5x) [9][3]
巨子生物：1H24业绩超预期，产品矩阵扩容及全渠道扩张支持长期增长