Summary of the Conference Call for Juzi Biotechnology Company Overview - **Company**: Juzi Biotechnology - **Key Brands**: Kefu Mei and Keli Jin Industry Insights - **Market Trends**: The recombinant collagen market continues to show strong growth potential, with no signs of slowing down. The demand for products in this category remains robust, as evidenced by the high growth rates of key products and positive feedback from new product launches [4][10]. Core Points and Arguments - **Product Innovation**: Juzi Biotechnology is driving growth through product iterations, such as the upgrade of collagen peptide to version 2.0, and the introduction of new products like Focus Cream and Honey Repair Cream. These new products have received positive feedback from distribution channels and are expected to become new growth drivers [2][5]. - **Kefu Mei Brand Strengths**: Kefu Mei focuses on efficacy and safety, having established professional trust through medical device certification. The brand is expanding its product line into niche areas such as acne treatment and thermal injury repair, while also enhancing offline direct store presence to improve market performance [2][9]. - **Sales Performance**: Kefu Mei's collagen stick accounts for approximately 30% of total sales and continues to grow rapidly. The new customer acquisition rate is close to 50%, with a repurchase rate significantly higher than the industry average [2][12]. - **Keli Jin Brand Dynamics**: Keli Jin has achieved short-term growth through organizational restructuring and product line optimization. However, long-term growth may face challenges due to potential limitations in collagen technology for anti-aging effects [2][20]. - **Regulatory Challenges**: Sales of Class II medical device products are growing steadily, but the approval process for Class III medical devices is slow, with uncertain timelines for specific approvals despite receiving priority review qualifications for collagen fillers [2][21]. Financial Performance - **Revenue Growth**: Juzi Biotechnology has experienced rapid revenue and profit growth, although the sales expense ratio has increased. The company plans to control this ratio through product combination sales and customer referral strategies [6][7]. Marketing and Competitive Landscape - **Competitive Positioning**: Kefu Mei differentiates itself from competitors by emphasizing safety and efficacy. The brand has established a strong medical aesthetic image through partnerships with hospitals and medical institutions, contrasting with competitors that rely on celebrity endorsements [17][25]. - **Market Competition**: While other brands have launched collagen products, Kefu Mei's unique positioning and established trust in safety and efficacy mitigate significant competitive threats. The market is expanding collectively rather than through direct competition [25]. Product Strategy - **Product Development**: Kefu Mei's strategy includes launching successful single products and then expanding related skincare offerings. The brand also targets various consumer needs with different product forms [11][12]. - **New Product Launches**: The Focus Cream and Zhenyu Secret Repair Cream have distinct market positions, with the latter targeting a high-end consumer segment and addressing specific skin repair needs [18]. Future Outlook - **Growth Projections**: Kefu Mei is expected to achieve a growth rate of 40% to 50% in Q1 2025, with an annual performance forecast of 25% to 28%. The overall performance is anticipated to remain stable due to new product launches and marketing strategies [10][19]. Additional Considerations - **Consumer Sentiment**: Recent controversies regarding product ingredient content are not expected to significantly impact the company's fundamentals, as consumer recognition of product efficacy remains high [3][24]. - **Offline Expansion**: Kefu Mei has begun establishing offline direct stores, with plans to open 40 new locations in 2025. This strategy aims to enhance member interaction and improve market performance [22][23].

Core Viewpoint - The domestic medical beauty industry is facing significant scrutiny due to allegations regarding the quality and labeling of collagen products, particularly targeting the leading company, Giant Bio, and its flagship product, "Collagen Stick" [1][5][6]. Industry Overview - The controversy highlights the lack of national standards for the testing of recombinant collagen in cosmetics, leading to significant discrepancies in test results as companies rely on self-defined methods or pharmaceutical industry standards [5][6]. - The National Medical Products Administration has initiated the establishment of industry standards for recombinant collagen and its testing methods, with companies participating in the process [5]. Company-Specific Issues - Giant Bio's "Collagen Stick" was accused of having a collagen content of only 0.0177%, which is below the national cosmetic labeling requirement of 0.1% for non-trace additives, and the key amino acid glycine was reportedly not detected [6][8]. - In response to the allegations, Giant Bio issued a statement denying the claims, asserting that their products meet the required standards and have been approved by regulatory authorities [8]. Testing Method Discrepancies - The testing methods used by the parties involved differ significantly; the blogger employed a high-precision HPLC method, while Giant Bio referenced outdated national standards that have been criticized for their ineffectiveness in the current complex cosmetic landscape [9][10]. - The HPLC method is noted for its high sensitivity and ability to accurately quantify amino acids, while the methods referenced by Giant Bio have been deemed inadequate for testing collagen in cosmetics [10][15]. Market Impact - Following the allegations, Giant Bio's stock price fell over 8% on the Hong Kong Stock Exchange, closing down 4.04%, reflecting market concerns over the credibility of its products [8].

在皮肤健康管理领域，基底膜的重要性早已被学界广泛认知，它堪称皮肤的"地基"，维系着表皮与真皮间的稳固连 接。而作为基底膜核心支撑结构的IV型胶原蛋白，不仅主导皮肤屏障修护进程，更在痤疮、瘢痕增生等皮肤健康问题 上具有关键作用。 在全球化妆品科学领域不断追求创新突破的当下，合成生物学正成为驱动产业发展的核心力量。近期，ICIC2025国际 化妆品创新大会在上海圆满落幕，这场汇聚世界权威皮肤学专家的高规格盛会，聚焦前沿科技成果，为产业发展注入 新动能。作为全球重组胶原蛋白领导者，巨子生物携旗下品牌可复美深度参与大会，不仅举办《合成生物学驱动产业 发展新技术》学术交流分论坛，还成功召开「巨子生物独家专利重组IV型胶原蛋白」发布会，充分展现了以合成生物 学驱动产业创新的强劲实力。 学界洞见：合成生物学重塑皮肤健康管理新范式 巨子生物搭建起以生物活性成分为基础的合成生物学平台，成为全球首家实现量产并商业化生产重组胶原蛋白的企 业。依托前沿合成制备技术，企业突破性实现重组IV型胶原蛋白的研发与规模化量产，并在中国首次实现重组IV型胶 原蛋白与基底膜屏障完整性作用机制的系统性科学验证。大量实验数据证实了其褪红与修护双通路作 ...

Group 1: Market Activity - Net inflows into various stocks include 5.258 billion HKD into the Tracker Fund, 1.919 billion HKD into Meituan, and 1.131 billion HKD into Hang Seng China Enterprises [1] - Continuous net selling observed for Tencent Holdings totaling 20.93514 billion HKD over 16 days and for Alibaba totaling 4.30674 billion HKD over 6 days [1] - Continuous net buying for China Construction Bank totaling 7.8041 billion HKD over 11 days and for Meituan totaling 7.86759 billion HKD over 8 days [1] Group 2: Stock Performance - Meituan's stock increased by 2.1% with a net inflow of 1.318 billion HKD [3] - Bubble Mart's stock rose by 5.4% with a net inflow of 0.17 billion HKD [3] - Xiaomi Group's stock saw a slight increase of 0.5% with a net inflow of 0.47 billion HKD [3] Group 3: Company Announcements - Meituan announced a promotional event from May 28 to June 18, covering a wide range of consumer categories [4] - Bubble Mart's profit forecasts for 2025 and 2026 were raised by 5% and 6% respectively, with a target price increase from 236 HKD to 275 HKD [4] - Xiaomi Group reported a 47.4% year-on-year revenue growth for Q1 2025, reaching 111.3 billion CNY, with adjusted net profit surpassing 10 billion CNY for the first time [5]

Core Viewpoint - The controversy surrounding the skincare brand Kefu Mei, owned by Juzhi Biotechnology, has raised significant concerns about the authenticity of its flagship product, the recombinant collagen essence, which was alleged to contain only 0.0177% collagen, contradicting regulatory standards that require non-trace ingredients to exceed 0.1% [1][2][3] Company Summary - Juzhi Biotechnology, established in 2000, is a leading player in the recombinant collagen market in China, with a revenue growth from 900 million yuan in 2019 to 5.5 billion yuan in 2024, marking a more than fivefold increase [8] - The company reported a revenue of 5.539 billion yuan in 2024, a year-on-year increase of 57.2%, and a net profit of 2.062 billion yuan, up 42.1% [8] - Kefu Mei, the core brand of Juzhi Biotechnology, generated 4.54 billion yuan in revenue in 2024, reflecting a significant growth of 62.9% [9] Industry Summary - The recombinant collagen market in China was valued at 10.8 billion yuan in 2021 and is projected to surge to 219.38 billion yuan by 2030, with a compound annual growth rate of 44.93% [8] - The absence of industry standards for the collagen content in cosmetics has led to regulatory ambiguities, as highlighted by the ongoing controversy [7] - The recent scrutiny of Juzhi Biotechnology's products comes at a time when recombinant collagen is gaining popularity in the cosmetic industry, potentially replacing hyaluronic acid as a preferred ingredient [9]

Summary of Key Points Core Viewpoint - The Hong Kong stock market experienced significant net inflows from Northbound trading, with a total net buy of HKD 119.75 billion on May 27, 2023, indicating strong investor interest in certain stocks while others faced net sell-offs [1]. Group 1: Northbound Trading Activity - Northbound trading saw a net buy of HKD 81.67 billion through the Shanghai Stock Connect and HKD 38.08 billion through the Shenzhen Stock Connect [1]. - The most bought stocks included the Tracker Fund of Hong Kong (盈富基金, 02800), Meituan (美团-W, 03690), and Hang Seng China Enterprises Index (恒生中国企业, 02828) [1]. - The most sold stocks were Tencent (00700), Alibaba (阿里巴巴-W, 09988), and Li Auto (理想汽车-W, 02015) [1]. Group 2: Individual Stock Performance - The Tracker Fund of Hong Kong (盈富基金, 02800) had a net buy of HKD 36.63 billion, while Meituan (美团-W, 03690) saw a net buy of HKD 36.62 billion [2]. - Xiaomi Group (小米集团-W, 01810) recorded a net buy of HKD 24.96 billion, while Alibaba (阿里巴巴-W, 09988) faced a net sell of HKD 3.89 billion [2]. - China Mobile (中国移动, 00941) received a net buy of HKD 5.93 billion, contrasting with the net sells of Tencent (11.78 billion) and Li Auto (2.01 billion) [8]. Group 3: Market Insights and Analyst Reports - Analysts from Huatai Securities noted that despite concerns over supply shocks and rising overseas interest rates, the liquidity in the Hong Kong market remains robust, which could support large IPOs and attract new capital [4]. - Meituan's first-quarter earnings exceeded expectations, with management committed to maintaining market share despite anticipated increases in subsidies and marketing expenses [5]. - Bubble Mart (泡泡玛特, 09992) received a positive outlook from Bank of America, raising its target price by 17% to HKD 275, reflecting confidence in its growth trajectory [6].

Group 1: Report's Investment Rating for the Industry - No information provided on the industry investment rating Group 2: Core Viewpoints of the Report - Amid the China-US trade game, technology has become the decisive factor, and China will continue to increase investment in technology, creating a good environment for tech companies [4][8] - Due to early listing rules, many Chinese tech companies are listed in Hong Kong. With interest rate cuts, southbound capital inflows, and low valuations, Hong Kong tech stocks have investment value, and investing in Hong Kong Stock Connect actively managed funds is a good choice [4] - Great Wall Hong Kong Stock Connect Value Selection Multi-Strategy A (007132.OF), which focuses on Hong Kong tech stocks and new consumption, has excellent performance and is worthy of attention [4] Group 3: Summary of Each Section in the Report I. Scarce Tech Stocks Gather in HKEX, and Hong Kong Stock Connect Funds Show Allocation Value 1. **Tech Manufacturing as the Decisive Factor in China-US Game** - China's R&D expenditure in 2024 reached 3.41 trillion yuan, accounting for 2.68% of GDP, and is expected to increase. The proportion of high-tech manufacturing in industrial added - value has risen from 9.4% in 2012 to 15.5% in 2022 [8] - The Chinese government attaches great importance to new - quality productivity, with leaders making multiple statements on its development directions [11][12] 2. **Flourishing High - tech Industries** - In 2024, China's new energy vehicle production was 11.712 million, a year - on - year increase of 43.69%, and exports were 1.2992 million, a year - on - year increase of 25.20%. Mobile internet monthly traffic per user has been increasing, and the semiconductor industry is growing well [13][16] 3. **HKEX Gathers Scarce Tech Stocks with Valuation Advantages** - Many Chinese tech companies are listed in Hong Kong. With global interest rate cuts, Hong Kong stocks, especially tech stocks, have investment value due to low valuations and continuous southbound capital inflows [18][20][21] 4. **Attention to Hong Kong Stock Connect Tech - themed Funds** - Among various investment channels for Hong Kong stocks, Hong Kong Stock Connect actively managed funds are a good choice for investors seeking excess returns. Great Wall Hong Kong Stock Connect Value Selection Multi - Strategy A is worthy of attention [24][25] II. Investment Value Analysis of Great Wall Hong Kong Stock Connect Value Selection Multi - Strategy (007132.OF) 1. **Experienced Fund Manager** - The fund manager, Qu Shaojie, has rich experience in Hong Kong stock market investment management. The fund is managed by Great Wall Fund, which has a good track record and a large management scale [26][27] 2. **Forward - looking Industry Layout in Technology** - In 2024, the fund adjusted its industry weights, increasing new consumption, auto, and semiconductor weights while maintaining internet technology weights. It is more focused on the tech sector, and the manager is optimistic about the future of Hong Kong's tech and internet industries and emerging consumption [28][29] 3. **High - position and Value - oriented Portfolio** - The fund maintains a high equity position (above 85% since 2024, with the latest at 88.15%), and shows a value - oriented style with good valuation performance [35] 4. **Top Holdings Covering Leaders in Hard Tech and New Consumption** - The fund's top holdings include internet tech, high - end manufacturing, and emerging consumption companies. It has early and continuous investments in internet tech stocks, and timely increased positions in new energy vehicle stocks and emerging consumption stocks like Pop Mart [37] 5. **Outstanding Recent Performance** - The fund has excellent recent performance, with a 51.16% return in the past year, a Sharpe ratio of 1.57, and an excess return of 33.02% compared to the benchmark. In the past 6 months, the return was 38.27%, ranking first among similar products, and 32.89% this year, ranking third. It is a five - star rated fund [39][42]

Core Viewpoint - The controversy surrounding Juzhibio's flagship product, the "Recombinant Collagen Essence," has raised significant concerns about its actual collagen content and potential false advertising, leading to a sharp decline in its stock price and questioning the company's marketing practices [1][3]. Group 1: Product Controversy - A report by the self-media "Big Mouth Doctor" claims that the actual recombinant collagen content in Juzhibio's "Recombinant Collagen Essence" is only 0.0177%, which is below the cosmetic labeling standard of 0.1% [2][3]. - The report also highlights the absence of glycine, a key structural component of collagen, challenging the product's technical authenticity [2]. - Juzhibio has denied these claims, asserting that internal tests show collagen content greater than 0.1% and questioning the validity of the testing methods used by the "Big Mouth Doctor" team [3]. Group 2: Financial Performance and Dependency - Juzhibio's revenue is heavily reliant on its skincare products, with 99.7% of revenue coming from this segment, while health products contribute only 0.3% [5]. - The "Recombinant Collagen" and "Keli Jin" brands account for over 90% of the company's revenue, indicating a significant dependency on these two brands [6][7]. - In 2024, Juzhibio's sales and distribution expenses are projected to be 2.008 billion yuan, while R&D expenses are only 106 million yuan, highlighting a 19-fold disparity [7]. Group 3: Market Impact - Following the allegations, Juzhibio's stock price fell by 8% after the market opened on May 26 [3]. - The affected product has been removed from all sales channels, including major platforms like Taobao, Douyin, and JD [3]. - If consumer backlash leads to collective lawsuits or mass returns, it could severely impact the company's sales performance during key promotional periods, jeopardizing its annual revenue growth targets [6].

Market Overview - The Hong Kong stock market showed volatility in early trading, with the Hang Seng Technology Index dropping over 1% at one point, but later indices rebounded to close higher. The Hang Seng Index rose by 0.43% to 23,381.99 points, with a total turnover of HKD 203.27 billion [1] - Guotai Junan International noted that market sentiment and valuation levels have recovered, indicating that new upward momentum for Hong Kong stocks is developing. Investors are advised to adopt a dividend style as a base and wait for clearer market conditions before increasing allocations in sectors supported by domestic policies [1] Blue Chip Performance - Meituan-W (03690) saw a moderate increase of 2.09%, closing at HKD 132.1, contributing 24.28 points to the Hang Seng Index. The company reported Q1 revenue of RMB 86.557 billion, up 18.1% year-on-year, and a profit attributable to equity holders of RMB 10.057 billion, up 87.33% [2] - Other notable blue chips included CSPC Pharmaceutical Group (01093) which rose by 5.83%, and China Biologic Products (01177) which increased by 4.68% [2] Sector Highlights Pharmaceutical Sector - The pharmaceutical sector showed strength, with notable gains from companies like Viva Biotech (01873) up 12.73% and Junshi Biosciences (01877) up 12.61%. The upcoming ASCO conference is expected to highlight over 70 research achievements from Chinese pharmaceutical companies, enhancing the outlook for domestic innovation [3][4] New Consumption Sector - The new consumption sector performed well, with companies like Mixue Group (02097) rising by 9.97% and Pop Mart (09992) increasing by 5.42%. Analysts suggest that trends in emotional consumption and health-oriented products are driving growth in this sector [4][5] Aviation Sector - The aviation sector continued its upward trend, with China Eastern Airlines (00670) rising by 4.63%. Analysts attribute this to favorable oil prices and a strengthening RMB, suggesting a potential recovery in airline performance [5] Automotive Sector - The automotive sector faced pressure, with companies like Brilliance China (01114) and GAC Group (02238) declining. The market is observing a new round of price wars among car manufacturers, which could impact profitability [6] Notable Stock Movements - Zhongan Online (06060) surged by 12.16% following the passage of a stablecoin regulation in Hong Kong, which is expected to benefit its virtual asset business [8] - Horizon Robotics (09660) rose by 11.39% after being included in the Hong Kong Stock Connect, which is anticipated to increase liquidity for the stock [9] - Ji Hong Co. (02603) debuted strongly, closing up 39.06% on its first trading day, indicating strong market interest [11] New IPOs - Paig BioPharma-B (02565) experienced a significant drop of 25.9% after its IPO, reflecting market skepticism about its business model and product pipeline [12]

Group 1: Market Overview - The Hang Seng Index fell by 0.18%, down 41 points, closing at 23,241 points, while the Hang Seng Tech Index decreased by 0.58% [1] - Early trading volume in Hong Kong stocks reached HKD 111.4 billion [1] Group 2: Pharmaceutical Sector - Pharmaceutical stocks showed strength in early trading, driven by significant data expected to be released at the ASCO conference, enhancing the industry's outlook for innovative drugs [1] - Junshi Biosciences (01877) rose by 6%, Lepu Biopharma-B (02157) increased by 8%, King’s Ray Biotech (01548) gained 5%, and WuXi AppTec (02268) also saw a 5% rise [1] - Heyu-B (02256) surged over 2% after receiving CDE approval for the breakthrough therapy designation for Ipagufin in treating HCC [1] - Yiming Oncology-B (01541) increased by over 4%, with results from the IMM2510/AXN-2510 combination chemotherapy Phase II trial expected to be announced in the second half of the year [1] Group 3: Technology and Other Sectors - ZhongAn Online (06060) rose over 5%, with a cumulative increase of over 30% in stock price this month, likely benefiting from the Hong Kong stablecoin bill [2] - Smoore International (06969) increased by over 7%, with the new generation of heat-not-burn product Glo Hilo set to launch in Japan [3] - Inspur Digital Enterprise (00596) rose over 7%, recognized as a leading company in China's ERP sector, with institutions noting its valuation is significantly undervalued compared to peers [3] - Gu Ming (01364) surged over 7% to reach a new high, with expectations to enter the Hong Kong Stock Connect next month and notable same-store sales growth in Q1 [4] - KEEP (03650) increased by over 7%, with the upcoming launch of a smart sports watch featuring upgraded AI running coach functions [4] - Jacobson Pharmaceutical (02633) rose over 5%, with projected net profit growth of over 10% year-on-year for the fiscal year 2025 [5] - Horizon Robotics-W (09660) increased by 9%, as the company was included in the Shenzhen-Hong Kong Stock Connect, with institutions expecting chip shipments to grow annually [5] - Giant Bio (02367) fell over 2% due to its brand Kefu Mei being involved in a "fake product" scandal, raising concerns from Citigroup about its performance during the 618 promotional period [5]