Core Viewpoint - The Chinese cosmetics industry is undergoing a significant "ingredient revolution," with recombinant collagen emerging as a core force in reconstructing product value systems. The key question remains whether large molecular recombinant collagen can effectively penetrate the skin barrier to reach its target sites [3][4]. Group 1: Technological Breakthroughs - The "transdermal collagen" technology developed by Kemi, a brand under Furuida Bio Co., has been recognized as reaching an internationally leading level by the China Light Industry Federation [4][20]. - Kemi's technology has achieved a 27.5 times increase in transdermal efficiency, addressing the industry-wide challenge of large molecular penetration [6][10]. - The core issue of collagen efficacy lies in the dilemma of activity versus permeability, with traditional methods reducing molecular size at the cost of biological activity [7][11]. Group 2: Innovative Solutions - Kemi's solution involves a systematic technology called "transdermal collagen," which enhances the penetration ability of large molecular collagen through genetic engineering [8][11]. - The "transmembrane peptide" acts as a "biological engine," enabling large molecular collagen to actively penetrate cell membranes, thus overcoming traditional passive diffusion limitations [8][10]. - The "super glass collagen microsphere" technology ensures stable presence and sustained release of active collagen within the skin, significantly improving penetration rates [10][11]. Group 3: Market Validation - Kemi's flagship product, the "Kemi Recombinant Collagen Anti-Wrinkle Essence," combines the two proprietary delivery technologies, resulting in measurable skincare effects [12][14]. - In just eight months, the transdermal collagen essence achieved sales exceeding 23 million units, topping various e-commerce beauty charts [14][15]. - The brand's marketing strategy focuses on building trust through deep communication and collaboration with authoritative media, enhancing consumer perception of its technological innovations [15][16]. Group 4: Industry Impact and Standards - Kemi has transitioned from a "dark horse" to a "definer" in the industry, actively participating in the formulation of industry standards, including the first group standard for measuring the penetration efficacy of recombinant collagen [20][23]. - The establishment of these standards marks a shift from vague marketing claims to quantifiable scientific parameters, promoting a new phase of verifiable efficacy in the industry [24][25]. - Kemi's approach signifies a broader industry shift from marketing-driven strategies to technology-driven value creation, setting a benchmark for future developments in the cosmetics sector [25].

Investment Rating - The report assigns a "Buy" rating for the company, indicating a positive outlook following the divestiture of its real estate business and steady growth in the cosmetics segment [5][42]. Core Insights - The company has transitioned its main business focus to cosmetics and pharmaceuticals after divesting its real estate operations in 2023. The cosmetics segment has shown resilience, contributing over 52.8% of total revenue [10][41]. - The company is leveraging a "product + R&D + channel" strategy to build competitive advantages, focusing on marketing synergies, innovation in product development, and a comprehensive online and offline sales network [8][30][34]. - Revenue projections for 2025-2027 are estimated at RMB 38.1 billion, RMB 39.3 billion, and RMB 43.0 billion, with corresponding growth rates of -4.3%, +3.1%, and +9.5% respectively. Net profit is expected to reach RMB 2.4 billion, RMB 2.7 billion, and RMB 3.1 billion during the same period [9][41]. Summary by Sections Market Performance - The closing price of the stock is RMB 7.36, with a total market capitalization of RMB 7,481.95 million and a circulating market value of RMB 7,481.95 million [3]. Financial Data - The company reported a gross margin of 46.49% in 2023, a significant increase of 21.84 percentage points from the previous year, primarily due to the strategic shift away from low-margin real estate operations [21]. Revenue and Profit Forecast - The company anticipates a decline in revenue for 2023, followed by a gradual recovery, with net profit growth projected at +0.2%, +8.8%, and +15.3% for the years 2025 to 2027 [9][41]. Business Segments - The cosmetics segment is expected to see revenue growth of -5%, +6%, and +14% from 2025 to 2027, while the pharmaceutical segment is projected to grow at -5%, -3%, and +5% during the same period [10][41]. - The raw materials and additives segment is forecasted to grow steadily, with revenue increases of +3%, +4%, and +5% from 2025 to 2027 [10]. Competitive Positioning - The company is positioned favorably against comparable domestic brands, with a projected price-to-earnings (P/E) ratio of 28 times for 2026, aligning with industry averages [42]. Marketing and R&D Strategy - The company has invested significantly in R&D, with a budget of RMB 1.16 billion for the first three quarters of 2025, representing a research expense ratio of 4.47% [30]. - New product launches and marketing initiatives are focused on enhancing brand visibility and consumer engagement across various channels, including e-commerce and physical retail [28][34]. Sales Channels - The cosmetics segment's revenue is heavily driven by online sales, contributing 84.2% of total revenue, while offline sales account for 15.8% [34]. - The company is expanding its presence in both online and offline markets, establishing flagship stores on major e-commerce platforms and increasing the number of physical retail locations [34].

Core Viewpoint - The breakthrough of "transdermal collagen" technology by Furuida Biological Co., under the brand Kemi, marks a significant advancement in the global cosmetics science arena, showcasing China's transition from application follower to principle definer in beauty technology [3][4][10]. Group 1: Event Overview - The 79th Annual Scientific Meeting of the Society of Cosmetic Chemists (SCC) was held in New York on December 16, 2025, celebrating the 80th anniversary of the SCC, which is a historic and influential academic platform in the cosmetics science field [5]. - The conference theme "Science Reimagined" indicates the ongoing transformation within the industry, with a focus on innovative technologies from Chinese enterprises [5][9]. Group 2: Technology Breakthrough - Kemi's report highlighted a 27.5 times increase in the permeability of large molecular collagen, addressing the long-standing challenge of low absorption rates in skincare applications [3][14]. - The technology utilizes a "transdermal engine" that integrates a short peptide sequence capable of penetrating cell membranes into the collagen gene, allowing the collagen to actively enter skin cells [12]. Group 3: Scientific Validation - The efficacy of the transdermal collagen was validated through rigorous scientific methods, including Raman spectroscopy, ensuring that the technology is grounded in real physiological conditions and consumer experiences [4][20]. - Clinical trials demonstrated that after 28 days of using the Kemi Recombined Collagen Anti-Wrinkle Essence, participants experienced a 17.16% reduction in crow's feet and a 23.24% reduction in frown lines, confirming the product's effectiveness [16]. Group 4: Market Impact - Kemi's products have achieved significant market success, with the "transdermal collagen essence" becoming a top-selling item shortly after launch, reflecting consumer demand for scientifically validated anti-aging products [21][23]. - The brand's positioning as a high-end product with a clear technological narrative has resulted in a customer price point significantly above the industry average, breaking the traditional price barriers for domestic brands [21][23]. Group 5: Future Implications - The success of Kemi at the SCC signifies a new phase for Chinese beauty technology, transitioning from product and ingredient output to technology solution output, showcasing the competitive edge of Chinese enterprises in global innovation [23][24]. - The global collagen market is expected to grow at a compound annual growth rate of over 40%, indicating a shift in competition towards a focus on bioactive design, intelligent delivery technology, and scientific efficacy validation [24].