Summary of the Conference Call on Ergothioneine Industry Industry Overview - The ergothioneine production in China is limited, relying heavily on cross-border e-commerce, with significant issues related to counterfeit products. Collaboration among brand owners, raw material suppliers, and distribution channels is essential to enhance consumer awareness and ensure product efficacy, guiding consumers to purchase through professional channels to combat market chaos [1][5][12]. Key Insights and Arguments - The health supplement contract manufacturing industry has technical barriers. Leading manufacturers like Xianle and Baihe enhance product value through encapsulation technology and flavoring. Most companies in the industry are taking a wait-and-see approach regarding regulations, while top firms are upgrading product specifications and promoting consumer awareness [1][4]. - Ergothioneine products have high gross margins, primarily concentrated at the production end, with high purity being a core competitive advantage. Companies like Jingshan Bio achieve purity levels of 99.99%, impacting the profit margins of contract manufacturers. Chemical synthesis may introduce heavy metals, making quality control and process inspection crucial [1][7]. - The anti-aging market is gaining traction, with ergothioneine recognized as a natural antioxidant that directly acts on mitochondria to eliminate free radicals, protect DNA, and reduce inflammation and oxidative damage, showing significant effects. A clear trend is emerging with a plethora of new products [1][10]. - The ergothioneine market is rapidly expanding, projected to reach 100 million by 2025, with expected growth of 6-7 times in the next two to three years. Companies like Kelong are working to lower costs and expand the consumer base through extensive promotion, such as partnerships with media outlets [1][11]. Additional Important Points - The pricing structure of ergothioneine shows that the highest profits are made from the brand to consumer end, with gross margins reaching 70%-90%. Mastering high-purity raw materials and reducing costs are key competitive advantages [3][14]. - The biological synthesis technology is reducing the price of ergothioneine, with two-chain purity priced around 8,500-9,500 yuan per kilogram, while four-chain purity exceeds 100,000 yuan. Companies like Huarui and Jingshan Bio have good reputations, with gross margins of at least 50% [3][20]. - The domestic production of ergothioneine is still constrained, necessitating reliance on cross-border e-commerce or overseas supply chains. Despite increased crackdowns on counterfeit products, low-dose and impure products remain prevalent in the market [5][12]. - The market for ergothioneine is expected to grow significantly, with the health supplement market reaching over 400 billion, and anti-aging supplements gaining attention. Consumer awareness of ergothioneine is currently limited, but positive feedback from users, such as marathon runners, is encouraging [11][34]. - The overseas market for ergothioneine has not gained widespread recognition compared to traditional supplements like fish oil, leading to a significant information gap. However, with proper marketing strategies, its market position can be improved [42][43]. Market Dynamics - The ergothioneine market is positioned in the third tier of health supplements in China, with an annual GMV of around 1 billion. The first tier includes fish oil and historical overseas products, while the second tier includes liver health products [41]. - The growth of the ergothioneine market is influenced by several factors, including regulatory frameworks, sales restrictions, and raw material supply, primarily sourced from Northeast Asia, Australia, and the US [38][39]. - The marketing strategies for ergothioneine products on e-commerce platforms focus on showcasing efficacy through data and scenario-based marketing, which effectively drives sales growth [47]. This summary encapsulates the key points discussed in the conference call regarding the ergothioneine industry, highlighting its current state, growth potential, and market dynamics.

商贸零售 2025 年 05 月 18 日 投资评级：看好（维持） 行业走势图 数据来源：聚源 -29% -14% 0% 14% 29% 43% 2024-05 2024-09 2025-01 商贸零售 沪深300 相关研究报告 《关注零售行业中期投资策略：深挖 情 绪 消 费 景 气 赛 道 — 行 业 周 报 》 -2025.5.11 《悦享生活，深挖情绪消费景气赛道 —2025 年零售行业中期投资策略》 -2025.5.7 《零售企业经营持续承压，关注高景 气优质公司—行业周报》-2025.5.5 618 大促拉开帷幕，关注国货美妆表现 ——行业周报 | 黄泽鹏（分析师） | 陈思（联系人） | | --- | --- | | huangzepeng@kysec.cn | chensi@kysec.cn | | 证书编号：S0790519110001 | 证书编号：S0790124070031 | chensi@kysec.cn 证书编号：S0790124070031 投资主线三（化妆品）：关注具备差异化且能力持续迭代的优质国货美妆品牌， 重点推荐毛戈平、珀莱雅、上美股份、巨子生物、润本股份、丸美生物等 ...

Core Viewpoint - The article discusses the rebuttal by Huaxi Biological regarding the "outdated hyaluronic acid theory," claiming it is a narrative constructed by "restless capital" to divert attention from the necessary evolution of China's industry [1][4]. Group 1: Industry Context - Huaxi Biological argues that the rise of the "outdated hyaluronic acid theory" is a result of misleading narratives that have emerged in recent years, portraying hyaluronic acid as inferior to other substances [3][4]. - The company highlights that since 2022, the capital market has shifted its focus to the concept of recombinant collagen, which has been promoted through misleading comparative studies against the hyaluronic acid industry [3][4]. Group 2: Company Performance - Huaxi Biological has experienced a significant decline in net profit and stock price, with its market value dropping from over 140 billion yuan in 2021 to just 24.3 billion yuan currently [7]. - In contrast, competitors like Juzhi Biological, which went public in Hong Kong in 2022, have seen both their performance and stock price rise, with a current market value of 90.9 billion HKD [8]. - Another competitor, Jinbo Biological, listed on the Beijing Stock Exchange, has also seen its stock price double in recent months, reaching a market value of 42.5 billion yuan [9].

Core Viewpoint - The article discusses the dual identity of Fan Daidi as both the new vice president of Northwest University and a wealthy entrepreneur, highlighting her significant contributions to the biotechnology industry through her company, Juzhi Biotechnology, which specializes in recombinant collagen products [2][3][5]. Group 1: Company Overview - Juzhi Biotechnology was founded in 2001 by Fan Daidi and her husband Yan Jianya, focusing on the commercialization of scientific research, particularly in recombinant collagen technology [5][7]. - As of May 15, 2025, Juzhi Biotechnology's market capitalization reached HKD 86.2 billion, with the couple's shareholding valued at over HKD 45 billion, making them the wealthiest couple in Shaanxi province [7]. - The company’s flagship product, the "Kefumei" mask, achieved annual sales of RMB 4.5 billion, showcasing the commercial success of their research [5][15]. Group 2: Research and Development - Fan Daidi's research on recombinant collagen began in the early 2000s, overcoming challenges associated with animal-derived collagen, leading to a breakthrough using E. coli fermentation for production [9][11]. - Juzhi Biotechnology's revenue heavily relies on its two main brands, "Kefumei" and "Keli Jin," which together account for 97.1% of the company's total revenue [12][18]. - The company has maintained a high gross margin, with figures of 83.3%, 84.6%, and 87.2% from 2019 to 2021, comparable to leading brands like Kweichow Moutai [16][18]. Group 3: Market Dynamics - The demand for collagen-based products is growing, with the medical beauty market for collagen masks valued at RMB 4.8 billion in 2021, projected to reach RMB 25.5 billion by 2027 [29]. - Juzhi Biotechnology faces competition from other brands in the beauty industry, which may impact its market share and growth potential [38][39]. - The company is also exploring new active ingredients, such as ginsenoside, to diversify its product offerings beyond collagen [36]. Group 4: Leadership and Future Prospects - Fan Daidi's appointment as vice president of Northwest University is seen as an opportunity to enhance the university's technology transfer capabilities, leveraging her industry experience [28][27]. - The company is considering succession planning, with their daughter Yan Yubo recently appointed as an executive director and chief product officer, indicating a focus on continuity and future growth [40][42].

Market Overview - The Shanghai Composite Index fell by 0.40% on May 16, with 15 industries experiencing gains, led by the automotive and machinery sectors, which rose by 1.91% and 0.83% respectively [1] - The beauty and personal care sector had the largest decline, dropping by 1.31%, followed by the non-bank financial sector, which fell by 1.21% [1] Capital Flow Analysis - The net inflow of capital in the two markets was 307 million yuan, with 14 industries seeing net inflows. The automotive sector led with a net inflow of 4.616 billion yuan, while the basic chemical industry had a net inflow of 1.981 billion yuan and a daily increase of 0.60% [1] - Conversely, 17 industries experienced net outflows, with the non-bank financial sector seeing the largest outflow of 1.925 billion yuan, followed by the transportation sector with a net outflow of 1.250 billion yuan [1] Beauty and Personal Care Sector - The beauty and personal care sector saw a decline of 1.31% with a net outflow of 294 million yuan. Out of 31 stocks in this sector, 11 rose while 20 fell [2] - The stocks with the highest net inflow included Qingdao Kingking with 50.67 million yuan, followed by Zhongshun Jierou and Yiyi Co., with net inflows of 20.55 million yuan and 9.64 million yuan respectively [2] - Notable stocks with significant net outflows included Furuida with 151 million yuan, Aimeike with 49.19 million yuan, and Qingsong Co. with 38.32 million yuan [2] Individual Stock Performance - The top stocks in the beauty and personal care sector based on capital flow include: - Furuida: -3.82% with a net outflow of 150.98 million yuan [3] - Aimeike: -2.06% with a net outflow of 49.19 million yuan [3] - Qingsong Co.: -7.34% with a net outflow of 38.32 million yuan [3] - Other notable performers include: - Qingdao Kingking: +1.89% with a net inflow of 50.67 million yuan [3] - Zhongshun Jierou: +0.87% with a net inflow of 20.55 million yuan [3]

Core Viewpoint - The recent advertisement for Ergothioneine capsules by Kelun Pharmaceutical has sparked attention, particularly due to the endorsement by the company's chairman, Liu Gexin, highlighting the scientific value and industrial prospects of Ergothioneine [1] Summary by Sections What is Ergothioneine and Why is it Called the "Longevity Vitamin"? - Ergothioneine (EGT) is a natural sulfur-containing amino acid derivative first isolated from ergot fungus in 1909, found in high concentrations in vital organs such as the liver, kidneys, and brain [2] - International studies have shown that Ergothioneine has significant antioxidant and cell-protective properties, with notable recognition from Nobel Prize nominee Bruce Ames, who referred to it as the "longevity vitamin" in a prominent publication [2] Mechanism of Action - Mitochondria, the "energy factories" of cells, generate energy (ATP) but also produce reactive oxygen species (ROS) as byproducts, which can accumulate and damage cellular components when mitochondrial efficiency declines due to aging or inflammation [4] - Ergothioneine is unique among known antioxidants and mitochondrial protectants as it can penetrate cell membranes and enter mitochondria, facilitated by its exclusive transport protein, OCTN1, allowing it to exert powerful antioxidant effects [6] Industrial Chain Overview - The production of Ergothioneine involves three main stages: raw material supply, biomanufacturing, and downstream applications [9] - Raw materials are primarily sourced from fungi and mushrooms through fermentation [9] - The mainstream production method is biomanufacturing via genetic engineering and high-efficiency fermentation, followed by extraction and purification [10] - In cosmetics, Ergothioneine is valued for its anti-aging, whitening, anti-inflammatory, and reparative properties, while in food and beverages, it is recognized for its anti-aging and cognitive enhancement effects, approved as a food ingredient in several countries [10] Key Companies in the Ergothioneine Industry - Huaxi Biological is a pioneer in the Ergothioneine sector, producing high-purity raw materials and setting industry standards, with a comprehensive product range from dietary supplements to medical applications [11] - Furuida has launched a new brand "Baifu" to expand its product line in high-end raw materials, including Ergothioneine [12] - Shouxiangu has developed advanced techniques to enhance the content and bioavailability of Ergothioneine in its products [12] - Other companies like Jiabiyou, Kelun Pharmaceutical, and Huadong Pharmaceutical are also actively involved in the production and application of Ergothioneine, contributing to the growth of the anti-aging product market [13][14] Conclusion - As scientific research progresses and regulations improve, Ergothioneine is transitioning from a niche ingredient to a broader market presence, expected to play a significant role in the anti-aging and functional food sectors [14]

Core Viewpoint - The medical beauty industry is experiencing a significant performance divergence among listed companies, driven by a shift from hyaluronic acid to collagen products, indicating a potential restructuring of industry value logic [1][3]. Group 1: Performance Analysis - In 2024, the performance of upstream medical beauty companies showed significant divergence, with companies like Juzi Biological and Jinbo Biological leading with high growth rates, while major hyaluronic acid players like Aimeike, Huaxi Biological, and Haohai Biological faced pressure [2][3]. - Aimeike's revenue growth slowed to 5.45%, the lowest since its listing, while Huaxi Biological's revenue declined by 11.61% and net profit dropped by 70.59% [3][5]. - Juzi Biological achieved revenue of 5.539 billion, a year-on-year increase of 57.2%, and a net profit of 2.062 billion, up 42.4% [5][7]. Group 2: Market Trends - The market for recombinant collagen products in China is projected to grow from 18.5 billion in 2022 to 108.3 billion by 2027, with a compound annual growth rate of 42.4% [7]. - Companies are increasingly entering the collagen market, including Aimeike and Huaxi Biological, which are exploring new opportunities in this segment [7][8]. - Huaxi Biological is developing proprietary recombinant human collagen products that have entered clinical trials, indicating a strategic shift towards innovative product development [7].

Core Insights - The analysis focuses on the inventory status of 14 representative listed companies in the daily chemical skincare sector for the year 2024, highlighting trends in inventory scale and turnover efficiency [1][2]. Inventory Scale and Proportion - Over half of the selected skincare companies experienced growth in inventory scale in 2024, with Chuang'er Biological showing the highest year-on-year increase of 62.44%, reaching an inventory scale of 0.35 billion [2][3]. - Other companies with significant inventory growth include Kesi Co. (0.97 billion, up 47.96%), Jinbo Biological (0.97 billion, up 45.68%), and Fulejia (1.6 billion, up 30.26%) [2][3]. - Water Sheep Co. has the highest inventory proportion relative to total assets at approximately 19.52% in 2024, indicating a notable increase from 19.32% in 2023 [4]. Inventory Turnover Efficiency - Among the analyzed companies, only Marubi and Qingsong Co. showed improvement in inventory turnover efficiency, while the remaining eight companies experienced an increase in inventory turnover days, indicating a decline in efficiency [1][5]. - Jinbo Biological, Huaxi Biological, and Beitaini reported inventory turnover days exceeding 270 days (approximately 9 months), with turnover days of 307.93 and 254.45 respectively for Jinbo and Huaxi [1][5]. - Eight out of the 14 companies improved their inventory turnover efficiency, while companies like Fulejia, Kesi Co., Marubi, Huaxi, Water Sheep, and Jiaheng Household experienced a decline in efficiency [7].

Core Insights - The performance of the daily chemical skincare industry in 2024 is generally pessimistic, with only 6 out of 17 selected companies achieving both revenue and net profit growth [1][2][4] - Notably, 4 companies reported losses, including Yatsen E-commerce, Jiaheng Cosmetics, Furuida, and Shanghai Jahwa, with Yatsen E-commerce experiencing continuous losses since its IPO in 2020, totaling over 6.5 billion yuan in losses [1][2][4] Revenue and Profit Analysis - Among the 17 companies analyzed, 6 companies reported a decline in both revenue and net profit, including Qingsong Co., Kesi Co., Shuiyang Co., Furuida, and Huaxi Biological [4][5] - The companies with revenue and net profit growth include Jinbo Biological (revenue up 84.92%, net profit up 144.27%), Shangmei Co. (revenue up 62.1%), and Juzi Biological (revenue up 57.2%) [2][7][9] - Companies with revenue but no profit growth include Lafang Co. (revenue 889 million yuan, net profit down 36.84%), Beitaini (revenue 5.736 billion yuan, net profit down 33.53%), and Fulejia (revenue 2.017 billion yuan, net profit down 11.77%) [2][4] Losses Overview - Yatsen E-commerce reported total revenue of 3.393 billion yuan, a slight decline of 0.63%, with a net profit loss of 710 million yuan [5][6] - Shanghai Jahwa's revenue was 5.679 billion yuan, down 13.93%, with a net profit loss of 833 million yuan, marking a significant decline of 266.6% [5][6] - Jiaheng Cosmetics reported revenue of 923 million yuan, down 9.13%, with a net profit loss of 24 million yuan, a decline of 159% [5][6] Performance Rankings - The top three companies in revenue growth are Jinbo Biological, Shangmei Co., and Juzi Biological, with growth rates of 84.92%, 62.1%, and 57.2% respectively [7] - The bottom three in revenue growth are Shanghai Jahwa, Furuida, and Jiaheng Cosmetics, with declines of 13.93%, 13.02%, and 9.13% respectively [7] - In terms of net profit growth, the top three are Jinbo E-commerce, Shangmei Co., and Juzi Biological, with growth rates of 144.27%, 74%, and 42.4% respectively [9]

Market Overview - Chinese market sentiment was low due to weak social financing data and US sanctions on Huawei, impacting tech stocks[3] - European markets opened lower but recovered, driven by better-than-expected manufacturing data in the Eurozone[3] - US stocks showed mixed performance; weak economic data initially led to a drop, but Powell's comments raised rate cut expectations, resulting in a four-day rise for the S&P 500[3] Fixed Income - US economic data weakness has reignited expectations for Fed easing, leading to a rebound in the bond market; 5-10 year Treasury yields fell over 10 basis points[4] - The 10-year US Treasury yield has risen above 4.4%, driven by strong economic data and Powell's signals against immediate rate cuts[6] - Short-term outlook suggests the 10-year yield will remain above 4.0% unless economic pressures increase or the Fed shifts to a dovish stance[6] Economic Indicators - April PPI in the US saw its largest decline in five years, while retail sales showed minimal growth, indicating economic slowdown[6] - The US housing market sentiment index fell to its lowest in 2023, reflecting ongoing economic challenges[6] Stock Performance - Major US indices showed varied results; the Dow Jones rose by 0.65% to 42,322.8, while the Nasdaq fell by 0.18% to 19,112.3[9] - Alibaba's revenue missed expectations, causing its stock to drop by 7.57%, impacting the performance of Chinese concept stocks[9] Commodity Prices - International oil prices fell due to concerns over increased supply from potential US-Iran nuclear agreements; NY crude oil closed at $61.62, down 2.42%[27] - Gold prices rebounded, closing at $3,226.6 per ounce, influenced by a weaker dollar and geopolitical tensions[27] Currency Movements - The US dollar index declined by 0.16% to 100.879, reflecting weak economic data and market sentiment[27] - The euro appreciated against the dollar, trading at 1.119, up 0.1%[26]