Core Insights - Huaxi Biological Technology Co., Ltd. reported its worst interim results since its listing, with a revenue of 2.261 billion yuan, a year-on-year decline of 19.57%, and a net profit of 221 million yuan, down 35.38% [2][3] Business Performance - The three main business segments of Huaxi Biological all experienced declines: the skin science innovation transformation business fell by 33.97% to 912 million yuan, accounting for 40.36% of total revenue; the raw materials business saw a slight decrease of 0.58% to 626 million yuan, making up 27.7% of revenue; and the medical terminal business dropped by 9.44% to 673 million yuan, representing 29.77% of revenue [3][9] - The company faced significant profit pressure due to credit impairment, asset impairment, and personnel optimization, with a total of 48.37 million yuan in impairment losses reported in the second quarter [3] Management Issues - Internal management problems have surfaced, including a financial fraud scandal involving a former marketing director, which has led to public disputes and allegations of financial misconduct [5] - The company has undergone significant management changes, with a focus on reforming its operational structure and reducing reliance on external management [6][7] Strategic Reforms - Founder Zhao Yan returned to the company to implement major reforms, including a crackdown on corruption and a shift towards hiring entrepreneurial talent for management positions [6][7] - Huaxi Biological is concentrating its resources on high-margin core segments, specifically raw materials and medical terminal businesses, which contributed over 57% of its main business revenue in the first half of 2025 [9][10] Research and Development Focus - The company has reduced its R&D projects significantly, focusing on raw materials and medical terminal businesses, while sales expenses decreased by 31.44% to 808 million yuan [8] - Despite the challenges, there are signs of marginal recovery, with a net profit of 119 million yuan in the second quarter of 2025, marking a year-on-year increase of 20.89% [8]

Core Viewpoint - The company's 1H25 performance met expectations, with revenue of 3.11 billion yuan, a year-on-year increase of 22.5%, and a net profit attributable to shareholders of 1.18 billion yuan, up 20.2% year-on-year [1][2] Financial Performance - Revenue for 1H25 reached 3.11 billion yuan, reflecting a 22.5% year-on-year growth - Net profit attributable to shareholders was 1.18 billion yuan, representing a 20.2% increase year-on-year - Adjusted net profit stood at 1.21 billion yuan, with a year-on-year growth of 17.4% [1] Product Development and Market Trends - The product matrix continues to expand, driving rapid revenue growth for key brands: - Revenue for Kefu Mei was 2.54 billion yuan, up 22.7% year-on-year - Keli Jin generated 500 million yuan, with a year-on-year increase of 26.9% - Performance of key products includes: - Kefu Mei's collagen stick ranked first in Tmall's liquid essence sales during the 618 shopping festival - Keli Jin's upgraded collagen mask performed well [1][2] Profitability and Cost Management - Gross margin slightly declined by 0.7 percentage points to 81.7% due to changes in product mix - Sales expense ratio decreased by 1.1 percentage points to 35.1%, attributed to improved operational efficiency across online platforms - Net profit margin decreased by 0.7 percentage points to 38.0%, maintaining industry-leading profitability [2] Future Outlook - Short-term impacts from previous events are gradually dissipating, with clear marketing and promotional plans for the second half of the year - The company is expected to see further operational improvements in its cosmetics business and steady progress in its medical aesthetics pipeline [2] Earnings Forecast and Valuation - The profit forecast for 2025-2026 is maintained at 2.5 billion and 3.2 billion yuan respectively - Current stock price corresponds to a 20x and 16x P/E for 2025 and 2026, with a target price of 82 HKD, indicating a 57% upside potential [3]

Core Viewpoint - The company is experiencing steady growth in H1 2025, with a focus on collagen products and a strong performance in the skincare segment, supported by dual-brand strategies and effective channel expansion [1][2]. Financial Performance - In H1 2025, the company achieved revenue of 3.113 billion yuan, representing a year-on-year increase of 22.5%, and a net profit attributable to shareholders of 1.182 billion yuan, up 20.2% [1]. - The company's gross margin for H1 2025 was 81.7%, a slight decrease of 0.7 percentage points, influenced by product mix adjustments [2]. Product and Brand Development - The company has a robust product matrix, with the "可复美" brand generating revenue of 2.542 billion yuan (up 22.7%) and the "可丽金" brand achieving 503 million yuan (up 26.9%) in H1 2025 [2]. - The product lineup includes a series of medical devices and five skincare efficacy series, with notable performance from collagen dressings and upgraded star products [2]. Channel Expansion - The company has expanded its offline presence to approximately 1,700 public hospitals and 3,000 private hospitals and clinics, while also increasing its brand-specific stores to 24 in cities like Hangzhou, Nanjing, and Tianjin [2]. - Online sales through direct-to-consumer (DTC) stores and e-commerce platforms saw significant growth, with e-commerce revenue increasing by 133.6% [2]. Research and Development - In H1 2025, the company filed for 19 new patents and had two medical devices related to recombinant collagen approved for review, indicating a strong focus on innovation in the medical aesthetics sector [2].

Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of HKD 82.50 [1]. Core Insights - The company demonstrated rapid growth in H1 2025, achieving revenue of RMB 3.113 billion, a year-on-year increase of 22.5%, and a net profit of RMB 1.18 billion, up 20.6% year-on-year, with a net profit margin of 37.98% [5]. - The company is focusing on long-term strategies, maintaining stable business operations, and ensuring both revenue and profit growth while keeping profitability relatively stable [5]. - The company is expanding the application boundaries of recombinant collagen through research and development, enhancing brand value, and iterating quality products to create a long-term growth matrix [5][6]. Financial Performance - For H1 2025, the company's revenue from its main brand, Kefu Mei, was RMB 2.542 billion, a year-on-year increase of 22.7% [6]. - The company reported a gross margin of 81.68%, with a sales and distribution expense ratio of 34.01%, reflecting optimization in sales expenses [8]. - The company expects to maintain its profit forecast, projecting net profits of RMB 2.6 billion, RMB 3.203 billion, and RMB 3.812 billion for 2025, 2026, and 2027 respectively, with corresponding EPS of RMB 2.53, RMB 3.11, and RMB 3.71 [9]. Market Position and Growth Potential - The company has successfully expanded its offline channels, entering approximately 1,700 public/private hospitals and clinics, and over 13,000 chain pharmacies [7]. - The direct sales through e-commerce platforms showed significant growth, achieving revenue of RMB 391 million, a year-on-year increase of 133.6% [7]. - The company is also exploring international markets, having entered Watsons in Malaysia, which is expected to provide new growth opportunities [7]. Valuation Metrics - The company is valued at a market capitalization of HKD 55.955 billion, with a closing price of HKD 52.25 as of August 28 [1]. - The projected PE ratios for the upcoming years are 24.23 for 2025, 19.22 for 2026, and 15.60 for 2027, indicating a favorable valuation compared to peers [4][11].

Core Viewpoint - Bank of America Securities has raised the target price for Giant Bio (02367) to HKD 79.5, maintaining a "Buy" rating due to the strong visibility of growth in its collagen product restructuring [1][2]. Financial Performance - Giant Bio's revenue for the first half of the year reached RMB 3.113 billion, representing a year-on-year increase of 22.5% [2]. - The company has adjusted its revenue forecast for the Comfy brand upwards based on the strong performance in July [2]. Earnings Forecast - The total revenue forecasts for 2025 to 2027 have been increased by 1.9% each [2]. - Earnings per share forecasts for 2025, 2026, and 2027 have been raised by 2%, 1.7%, and 1.7% respectively [2]. Cost Structure - Due to a decrease in the contribution from live streaming revenue, the sales expense ratio for 2025 has been lowered [2].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company reported steady growth in H1 2025, achieving revenue of 3.113 billion yuan (up 22.5% year-on-year) and a net profit of 1.182 billion yuan (up 20.2% year-on-year). As a leader in the collagen protein sector, the company is expected to continue delivering strong performance [4] - The company maintains its profit forecast, expecting net profits of 2.597 billion, 3.185 billion, and 3.834 billion yuan for 2025, 2026, and 2027 respectively, with corresponding EPS of 2.51, 3.07, and 3.70 yuan. The current stock price corresponds to PE ratios of 19.7, 16.0, and 13.3 times for the respective years [4] Financial Summary and Valuation Metrics - Revenue for 2023 was 3.524 billion yuan, with projections of 5.539 billion for 2024, 7.186 billion for 2025, 9.022 billion for 2026, and 11.024 billion for 2027, reflecting year-on-year growth rates of 49.0%, 57.2%, 29.7%, 25.5%, and 22.2% respectively [8] - Net profit for 2023 was 1.452 billion yuan, with projections of 2.062 billion for 2024, 2.597 billion for 2025, 3.185 billion for 2026, and 3.834 billion for 2027, with year-on-year growth rates of 44.9%, 42.1%, 25.9%, 22.6%, and 20.4% respectively [8] - The gross margin for 2025 is projected to be 81.6%, with net margins of 36.1% and ROE of 28.8% [8] - The diluted EPS is expected to be 2.5 yuan for 2025, with P/E ratios decreasing from 35.2 in 2023 to 19.7 in 2025 [8]

Investment Rating - The report assigns an "Outperform" rating to Giant Biogene, indicating an expected total return over the next 12-18 months that exceeds the return of its relevant broad market benchmark [20]. Core Insights - In 25H1, Giant Biogene achieved a revenue of 3.11 billion yuan, representing a year-on-year growth of 22.5%. The revenues from its two core brands, Comfy and COLLGENE, were 2.54 billion yuan and 500 million yuan, reflecting growth rates of 22.7% and 26.9% respectively [2][8]. - Functional skincare products have emerged as the core growth engine for the company, contributing significantly to overall revenue [2][8]. - The company has seen a decrease in all operating expense ratios, with an operating profit margin increase of 0.9 percentage points, while the net profit margin attributable to the parent company decreased by 0.7 percentage points [3][9]. Revenue Breakdown - Revenue from direct sales channels was 2.33 billion yuan, up 26.5% year-on-year, accounting for 74.7% of total revenue. Distributor channel revenue was 790 million yuan, up 12.1% [2][8]. - Online DTC store revenue reached 1.82 billion yuan, a 13.3% increase, while e-commerce platform direct sales surged by 133.6% to 390 million yuan [2][8]. - By product category, functional skincare products generated 2.41 billion yuan, up 24.2%, making up 77.4% of total revenue [2][8]. Operating Expenses and Profitability - The gross profit for 25H1 was 2.54 billion yuan, with a gross margin of 81.7%, down 0.7 percentage points year-on-year [3][9]. - Selling expenses increased to 1.06 billion yuan, up 18.7%, while the selling expense ratio decreased to 34%, down 1.1 percentage points [3][9]. - The operating profit for 25H1 was 1.36 billion yuan, up 25.1%, with an operating profit margin of 43.7%, an increase of 0.9 percentage points [3][9]. Product and R&D Developments - As of June 30, 2024, the company had over 140 product SKUs and more than 140 products under research and development [4][10]. - The company launched new products and upgraded existing star products, including the Comfy Collagen Stick 2.0 and the Zhenyu Mixture series [4][10]. - In 25H1, Giant Biogene added 19 patents, enhancing its portfolio in the fields of hair care and whitening [4][10]. Channel Strategy - The company is expanding its presence in both online and offline channels, with products now available in approximately 1,700 public hospitals and over 130,000 chain pharmacy stores [5][12]. - Online self-broadcasting capabilities have improved, reducing reliance on single influencers, while the company plans to enhance its presence in high-quality markets [5][12]. - The company has opened 24 brand retail stores in shopping centers and entered duty-free markets, including locations in Sanya and Seoul [5][12].

Summary of Key Points from the Conference Call of Juzi Biotechnology Company Overview - **Company**: Juzi Biotechnology Co., Ltd. - **Industry**: Biotechnology and Skincare Products Financial Performance - **Revenue**: 31.1 billion CNY in H1 2025, a year-on-year increase of 22.5% [2][4][5] - **Net Profit**: 11.8 billion CNY, up 20.6% year-on-year, maintaining a net profit margin of 38% [2][4][5] - **Core Brands**: - **Kefumei**: Revenue of 25 billion CNY, growth of 22% [2][4][7] - **Kelin**: Revenue of 4 billion CNY, growth of 27% [2][4][7] - **R&D Investment**: 41 million CNY, representing 1% of revenue, with 19 new patents granted, totaling 186 patents [2][8] Brand Performance - **Kefumei**: Launched the second generation of collagen sticks, achieving significant clinical trial success and ranking first in Tmall's liquid essence sales [2][9][24] - **Kelin**: Upgraded the collagen mask to version 3.0, addressing skin issues and ranking first in JD's nourishing mask sales [2][10] Market Expansion - **Channel Development**: Products are now available in approximately 1,700 public hospitals, 3,000 private hospitals, over 130,000 chain pharmacies, and more than 6,000 cosmetic stores and supermarkets [2][13] - **International Expansion**: Entered key Southeast Asian markets including Malaysia, Thailand, the Philippines, Vietnam, and Singapore, with plans for further expansion [2][31][32] Sales and Marketing Strategy - **Sales Expense Ratio**: Significant decrease in sales expense ratio, expected to grow in the low single digits for the full year [3][34][35] - **Online Sales Growth**: Direct sales revenue increased by 24.7%, with a focus on refined operations and marketing strategies [4][7] Product Development and Innovation - **New Product Launches**: Multiple new series and products introduced, including the Kefumei collagen stick and Kelin's anti-aging products [9][10][30] - **Clinical Research**: Kefumei collagen stick 2.0 showed excellent results in clinical trials, with over 95% satisfaction among participants [22][23][24] Consumer Engagement and Brand Building - **Consumer Interaction**: Initiatives like the "Lucky Blue Bag" campaign and campus events to engage younger consumers [12][25] - **Brand Awareness**: Participation in major industry conferences and events to enhance brand visibility and credibility [11][14] Future Outlook - **Growth Projections**: Positive expectations for revenue growth in H2 2025, with a focus on maintaining product pricing and enhancing marketing activities [17][18] - **Long-term Strategy**: Commitment to scientific research and brand building to ensure sustainable growth and market leadership [16][28] Social Responsibility - **Community Engagement**: Involvement in health education and environmental initiatives, including a bottle recycling program and support for underprivileged children [14][15][27] This summary encapsulates the key points from the conference call, highlighting Juzi Biotechnology's financial performance, brand strategies, market expansion efforts, and future outlook.

Investment Rating - The investment rating for the company is "Buy" (maintained) [3][18] Core Views - The company's performance in H1 2025 met market expectations, with revenue of 3.113 billion RMB, a year-on-year increase of 22.5%, and a net profit attributable to shareholders of 1.18 billion RMB, up 20.2% [8] - The company is expected to accelerate growth in H2 2025, with a focus on new product launches and expanding direct sales channels [2][8] Financial Summary - Revenue projections for the company are as follows: - 2023: 3,524 million RMB - 2024: 5,539 million RMB - 2025E: 7,066 million RMB - 2026E: 8,842 million RMB - 2027E: 10,691 million RMB - Year-on-year growth rates for revenue are projected at 49% for 2023, 57% for 2024, and gradually decreasing to 21% by 2027 [4][9] - Net profit attributable to shareholders is projected to grow from 1,452 million RMB in 2023 to 3,726 million RMB in 2027, with year-on-year growth rates of 45% in 2023 and 19% in 2027 [4][9] - The company's gross margin is expected to remain high, around 82-84% over the forecast period [4] Product and Market Insights - The company's flagship product, 可复美, generated revenue of 2.54 billion RMB in H1 2025, representing a year-on-year increase of 22.7% and accounting for 81.7% of total revenue [8] - New product launches, including the upgraded 胶原棒 2.0 and the 焦点面霜, have been well received in the market, contributing to revenue growth [8] - Direct sales revenue reached 2.33 billion RMB in H1 2025, up 26.5%, with significant growth in both online and offline channels [8] Future Outlook - The company is expected to achieve net profits of 2.54 billion RMB, 3.12 billion RMB, and 3.73 billion RMB for the years 2025, 2026, and 2027 respectively, with corresponding price-to-earnings ratios of 20, 16, and 14 [8][9] - The company is well-positioned in the collagen protein market, with ongoing expansion into medical aesthetics and B2B segments anticipated to drive future growth [8]

Core Viewpoint - The quality crisis during the "618 shopping festival" has significantly impacted the performance of Juzhi Biotechnology (02367.HK), although the company still reported revenue and net profit growth in the first half of the year, the growth rate has notably slowed compared to the previous year [1][2]. Financial Performance - In the first half of the year, Juzhi Biotechnology achieved revenue of 3.113 billion yuan, representing a year-on-year growth of 22.5%, while the net profit attributable to shareholders was 1.182 billion yuan, up 20.2% year-on-year [1]. - In the same period last year, the company's revenue and net profit growth rates were 58.2% and 47.4%, respectively, indicating a significant slowdown in performance this year [1]. - The company's largest brand, Kefu Mei, generated revenue of 2.542 billion yuan with a growth rate of 22.7%, while the second-largest brand, Keli Jin, achieved revenue of 500 million yuan, growing by 26.9% [1]. Market Outlook - The company previously set a 2025 revenue growth target of 25%-28%, and some analysts believe that the first half performance is still acceptable compared to this target [1]. - Following the quality crisis, the management described the operating conditions as "turbulent" but emphasized that the short-term impact will eventually pass [2]. - Third-party data indicates a recovery in online sales for the company's brands in July, with Kefu Mei's GMV growing by 32% year-on-year from January to July and by 62% in July alone, while Keli Jin's GMV decreased by 7% from January to July but increased by 35% in July [2]. Industry Context - The collagen industry is showing signs of cooling after several years of rapid growth, with competitors like Jinbo Biotechnology also reporting a significant slowdown in Q2 performance, raising concerns about the industry [2]. - More companies are entering the market, with brands like Shuerjia and Furuida launching related technologies or products in the first half of the year [2].