Investment Rating - The report maintains a "Recommend" rating for Giant Biogene (02367 HK) with a target price of HKD 54 40, compared to the current price of HKD 39 45 [1] Core Views - Giant Biogene achieved strong revenue and profit growth in H1 2024, with revenue reaching RMB 2 54 billion, up 58 2% YoY, and net profit attributable to shareholders of RMB 980 million, up 47 4% YoY [2] - The company's gross margin slightly decreased to 82 4% (-1 7pct YoY), while net margin stood at 38 6% (-2 9pct YoY), mainly due to the faster growth of lower-margin cosmetic products [2] - The flagship brand Kefumei (可复美) saw revenue growth of 68 6% YoY to RMB 2 07 billion, accounting for 81 5% of total revenue, driven by strong online sales and new product launches [2] - The company's online revenue reached RMB 1 77 billion, up 69 3% YoY, accounting for 69 7% of total revenue, with improved operational efficiency [2] - The report expects the company to benefit from potential approval of Class III medical device licenses for recombinant collagen products in 2025, opening a new growth curve [2] Financial Performance - Revenue for 2024E is projected at RMB 5 126 billion, up 45 4% YoY, with net profit attributable to shareholders of RMB 1 956 billion, up 34 7% YoY [2] - The company's gross margin is expected to remain stable at around 82 4% in 2024E, with net margin at 38 2% [2] - The report forecasts a 3-year revenue CAGR of 28% from 2024E to 2026E, with net profit CAGR of 26 9% [2] Product and Brand Strategy - Kefumei's collagen stick became the top-selling facial essence product on Tmall during the 618 shopping festival, with GMV growth exceeding 60% [2] - The company is building a diversified product matrix, with new launches such as the Focus Cream and Order Spot Stick gaining traction [2] - The Kelinge (可丽金) brand achieved 23 6% YoY revenue growth in H1 2024, with online GMV growth exceeding 100% during the 618 period [2] Valuation - The report values the company at 25x 2024E PE, based on its strong brand momentum and expected medical aesthetics growth [2] - The target price of HKD 54 40 implies a 38% upside from the current price [1]
巨子生物：2024年半年报点评：产品心智强劲，推新矩阵清晰