Investment Rating - The report assigns an "Accumulate" rating for the company for the first time [1] Core Insights - The company is a leader in the medical sodium hyaluronate dressing market and is actively expanding into class III medical devices [4] - The company has established a diverse product matrix focusing on functional skincare products and class II medical devices, leveraging core technologies of sodium hyaluronate and collagen [16][17] - The online direct sales ratio has been steadily increasing, with significant growth on platforms like Tmall and Douyin [28][33] - The company's stock ownership is highly concentrated, with the chairman holding 84.41% of shares, which enhances operational execution and team stability [34][38] Financial Forecast - The company's total revenue is projected to be 1,823.46 million yuan in 2025, with a year-on-year decline of 9.59%, followed by a recovery to 2,054.34 million yuan in 2026, and 2,259.77 million yuan in 2027 [7][9] - The net profit attributable to shareholders is expected to be 452.41 million yuan in 2025, down 31.57% year-on-year, followed by 502.92 million yuan in 2026 and 539.82 million yuan in 2027 [7][9] - The company's price-to-earnings (P/E) ratios for 2025-2027 are projected to be 27.6, 24.8, and 23.1 times, respectively [7][9] Industry Overview - The professional skincare industry in China has seen significant growth, with the market size for functional skincare products and medical dressings expected to reach 623.0 billion yuan and 253.8 billion yuan by 2026, respectively [52][56] - The market for professional skincare products has grown from 102.5 billion yuan in 2017 to 309.6 billion yuan in 2021, with a compound annual growth rate (CAGR) of 31.8% [52][56] - The competitive landscape in the medical dressing market is fragmented, with the company holding a 10.1% market share, making it the leading brand in the industry [60]

Investment Rating - The report assigns an "Accumulate" rating for the company for the first time [1] Core Viewpoints - The company is a leader in the medical sodium hyaluronate dressing market and is actively expanding its product line to include type III human-derived collagen products [4] - The company has a strong channel advantage, having expanded its medical dressing products from public hospitals to various medical institutions, beauty organizations, and retail pharmacies [9] - The online direct sales ratio has been steadily increasing, from 24.97% in 2020 to an expected 49.67% in 2024, indicating a shift towards e-commerce [9] Financial Forecast - Total revenue is projected to be 1,933.50 million yuan in 2023, with a growth rate of 9.29%, and is expected to reach 2,259.77 million yuan by 2027, with a growth rate of 10.00% [7] - Net profit attributable to the parent company is forecasted to be 749.34 million yuan in 2023, declining to 452.41 million yuan in 2025, before recovering to 539.82 million yuan by 2027 [7] - The company's price-to-earnings (P/E) ratios for 2025-2027 are projected to be 27.6, 24.8, and 23.1 times, respectively [9] Industry Overview - The professional skin care product market in China has grown from 180.5 billion yuan in 2017 to 317.1 billion yuan in 2021, with a compound annual growth rate (CAGR) of 15.1% [48] - The market for functional skin care products and medical dressings is expected to reach 623.0 billion yuan and 253.8 billion yuan, respectively, by 2026 [53] - The competitive landscape in the medical dressing market is fragmented, with the company holding a 10.1% market share, making it the leading brand in the industry [9][61]

Core Viewpoint - The medical beauty industry, particularly in the collagen segment, is experiencing a collective transformation due to slowing growth, declining gross margins, and shrinking valuations, prompting companies to shift their strategic focus towards global markets [1]. Group 1: Financial Performance - Recent financial reports indicate a collective slowdown in growth within the collagen sector, with major companies like Jinbo Biological reporting a net profit of 651 million yuan, down 11.08% year-on-year, and Juzhi Biological experiencing its first dual decline in profitability with a net profit of 1.915 billion yuan, down 7.2% year-on-year [1]. - The domestic market is facing diminishing returns and intensified competition, leading companies to seek international expansion as a new growth driver [1]. Group 2: International Expansion - Companies are increasingly focusing on international markets, with Jinbo Biological obtaining D-class entry approval in four Southeast Asian countries and Juzhi Biological penetrating the Malaysian market [1][3]. - The shift towards internationalization is seen as a strategy to counteract declining domestic profits, with companies aiming to leverage overseas markets for stable growth [1][4]. Group 3: Market Dynamics - The medical beauty sector is witnessing a transition from a seller's market, characterized by high margins and limited competition, to a more competitive landscape where compliance is merely the starting point for market entry [5][6]. - The number of approved collagen filler products has surged, leading to increased competition and price wars, which are pressuring profit margins for manufacturers [6][7]. Group 4: Valuation and Market Sentiment - The valuation landscape for the medical beauty sector is undergoing significant changes, with companies like Jinbo Biological seeing their market capitalization drop from over 50 billion yuan to 18.05 billion yuan, and Juzhi Biological's market cap shrinking by over 50 billion HKD [9]. - The industry is moving away from speculative valuations towards a more rational manufacturing approach, emphasizing operational efficiency and compliance in global markets [10].

Sales Channel Optimization - The offline sales channel optimization is progressing as expected, with significant improvements in channel quality and management capabilities [2] - The company is expanding its offline sales team to establish a solid foundation for long-term operations [2] - The shift from traditional distribution to value-driven sales models aims to enhance profitability and growth potential of offline channels [2][3] Market Competition - The company views strong competitors as catalysts for growth, providing valuable learning experiences [3] - The offline profit margins are substantial, prompting proactive adjustments to adapt to intense market competition [3] Revenue Expectations - The company is optimistic about recovering offline revenue in 2026, having made adequate preparations in 2025 [4] - Continuous efforts will be made to expand the offline market in 2026 [4] Online Sales Performance - The largest online sales platforms are Douyin and Tmall, with both showing similar sales volumes [5] - Other platforms, such as JD.com, have also shown significant growth in 2025 [5] Product Development - The company has high expectations for the upcoming medical product, the seaweed sugar repair patch, which is still in the pre-launch phase [5] - The lactose acid mask launched previously performed excellently in 2025, meeting sales expectations [5] - The company is preparing to submit materials for the approval of a new collagen product, with clinical trials completed [6]

1. Report Industry Investment Rating - No information provided about the industry investment rating. 2. Core Viewpoints of the Report - The company's online sales channels, including those managed by the Shanghai and Hangzhou teams, have improved in terms of personnel, expertise, and operational efficiency, and the online sales performance meets expectations. The company will continue to recruit professionals to enhance operational efficiency [21]. - The proportion of non - patch products is increasing year by year, and the company will continue to diversify product forms to meet consumer needs [21]. - The online sales proportion has exceeded the offline proportion. The company's offline market has great potential, and it will increase efforts to expand the offline market in the future [21][23]. - The ROI of the Douyin platform improved significantly in 2025 through refined operations, and the company aims to further improve and stabilize it [21]. - In 2025, the company launched dozens of new products, including the Centella asiatica series, the oil - based skin - care series, etc. [23]. - The company has set internal sales targets for 2026 but has no publicly available performance guidance [23]. - The company's recombinant type III humanized collagen freeze - dried fiber has completed clinical trials, and the injection - type recombinant type III humanized collagen gel plans to start clinical trials this year [23]. 3. Summary by Directory 3.1 Research Basic Situation - The research object is Fuerjia. The reception time was on March 17, 2026. The listed company's reception personnel included Director and Board Secretary Deng Baijiao, Securities Affairs Representative Wu Hong, and Investor Relations Management IR Qi Xinxin [16]. 3.2 Detailed Research Institutions - The research institutions include Guohai Securities Co., Ltd. (represented by Li Yuchen), Rongtong Fund Co., Ltd. (represented by Ma Chunxuan), and Caitong Securities (represented by Yang Jiarui). Guohai Securities Co., Ltd. participated twice [17]. 3.3 Research Institution Proportion - No information provided about the research institution proportion. 3.4 Main Content Information - **Sales channels**: The Shanghai team is responsible for interest e - commerce platforms like Douyin, and the Hangzhou team is responsible for shelf e - commerce platforms like Tmall. The offline sales channels are divided into three teams for CS & KA channels, professional channels, and OTC channels [21]. - **Non - patch product proportion**: The proportion of non - patch products is increasing, and the company will continue to diversify product forms [21]. - **Online - offline proportion trend**: Initially, the offline proportion was higher, but now the online proportion has exceeded the offline proportion [21]. - **Douyin ROI**: The ROI on Douyin improved significantly in 2025, and the company aims to further improve and stabilize it [21]. - **New products in 2025**: Dozens of new products were launched, such as the Centella asiatica series, the oil - based skin - care series, etc. [23]. - **Performance guidance**: The company has set internal sales targets for 2026 but has no publicly available performance guidance [23]. - **Medical aesthetic product planning**: The recombinant type III humanized collagen freeze - dried fiber has completed clinical trials, and the injection - type recombinant type III humanized collagen gel plans to start clinical trials this year [23]. - **Offline market outlook**: The offline market has great potential, and the company will increase efforts to expand it in the future [23].

Group 1: Business Operations and Strategy - In 2025, the company optimized its offline sales channels and improved its management team, leading to enhanced operational capabilities and a solid foundation for 2026 [1] - The sales channels were shifted from traditional distribution to value-driven sales, resulting in a streamlined number of distributors and improved profitability [1] - The offline sales team is divided into three groups: CS and KA channels, professional channels, and OTC channels [1] Group 2: Financial Performance and Projections - Financial data for 2025 is still under audit, with specific figures to be disclosed in the annual report on April 23, 2026 [2] - The offline profit margin is higher than online, with improved profitability due to sales channel optimization [3] - The sales team has grown to over 200 members, reflecting ongoing recruitment efforts [4] Group 3: Product Development and Innovation - The company plans to continue its dual focus on medical devices and functional skincare products, with new product launches expected in various forms including dressings, masks, and creams [5] - Progress is being made on a recombinant type III humanized collagen freeze-dried fiber, which has completed clinical trials and is preparing for submission [6] Group 4: Corporate Governance and Future Plans - The company is considering mergers and acquisitions to enhance R&D capabilities and product offerings, with future updates to be disclosed as per regulatory requirements [7] - The dividend plan for this year has not yet been determined, with an announcement expected on April 23, 2026 [8] - There are ongoing considerations for stock incentive plans, with no current confirmation on implementation [9] - No share reductions have occurred from executives whose restrictions were lifted in February 2025 [9]

Group 1: Company Operations and Changes - In 2025, the company optimized its offline sales channels and improved its management team, which aligned with expectations [2] - The offline market is crucial for the company's long-term development, necessitating adjustments for better profitability [2] - The company aims to maintain stable pricing across all channels, managing price through promotions during peak sales periods [3] Group 2: Sales Channel Adjustments - The optimization led to a reduction in the number of distributors, focusing on higher quality partnerships with service-oriented distributors [3] - The company expects positive performance in offline sales for 2026 due to improved channel quality and team enhancements [3] Group 3: Product Development and Future Plans - The medical aesthetics channel remains a key focus, with plans to increase R&D efforts and accelerate product launches [3] - Progress is being made on injectable products, including a humanized collagen product that has completed clinical trials and is preparing for submission [3]

Group 1: Channel Optimization and Sales Outlook - The company's offline channel optimization is progressing as expected, focusing on "strong regulation + strong optimization" to enhance market control and balance inventory levels to avoid excess stock risks [2] - The sales outlook for 2026 will be assessed after the release of periodic reports, with the company committed to maintaining strong offline sales efforts [3] Group 2: New Product Planning - The company has a well-prepared new product plan for 2026, covering various product forms including dressings, masks, lotions, creams, and serums, with actual launches to be confirmed later [3] Group 3: Non-Patch Product Revenue Trends - Since the establishment of the Shanghai R&D center, the company has increased its focus on non-patch products, leading to a rising revenue share from these products [3] Group 4: OTC Channel Development - The current coverage of the OTC channel is relatively low, indicating significant expansion potential; the company plans to increase personnel in this area to improve pharmacy coverage [3] Group 5: Sales Performance and Promotions - Sales during the 38 Festival are meeting expectations, with a focus on daily sales complemented by promotional activities to enhance overall performance [3] Group 6: Product Development Progress - Clinical trials for the recombinant type III humanized collagen freeze-dried fibers have been completed, with submission materials being prepared; other products are at various stages of clinical trials [3] Group 7: Shareholder and Acquisition Plans - The chairman has no current plans to reduce his shareholding, and while the company is monitoring potential acquisition targets, there are no suitable candidates at this time [3] Group 8: Dividend Considerations - The dividend proposal for the fiscal year 2025 has not yet been determined, and stakeholders are encouraged to stay updated [4]

Group 1: Sales and Market Strategy - The company's offline channel optimization is progressing as expected, focusing on "strong regulation + strong optimization" to enhance market control and balance inventory levels to avoid excess stock risks [2] - The sales outlook for 2026 will be assessed after the release of periodic reports, with the company committed to maintaining offline sales efforts [3] - The company has increased personnel in the OTC channel to improve pharmacy coverage, indicating significant growth potential in this area [3] Group 2: Product Development and Innovation - The company has a well-prepared product plan for 2026, including various new product forms such as dressings, masks, lotions, creams, and serums [3] - Since the establishment of the Shanghai R&D center, the revenue share of non-patch products has been increasing due to ongoing R&D efforts [3] - Progress on three types of medical devices includes completion of clinical trials for recombinant type III humanized collagen freeze-dried fibers and initiation of clinical trials for other products [3] Group 3: Financial and Corporate Governance - The chairman has no plans to reduce his shareholding in the company, ensuring stability in corporate governance [3] - The dividend plan for the fiscal year 2025 has not yet been determined, pending further developments [4] - The company is monitoring potential acquisition projects but currently has no suitable targets [3]

Market Overview - As of February 28, 2026, the number of listed companies on the Beijing Stock Exchange (BSE) reached 295, with a total market capitalization of 942.59 billion, and an average market value of 3.195 billion per company. The proportion of national-level specialized and innovative enterprises is approximately 61.02%, while high-tech enterprises account for 91.19% [6][8]. Index Performance - The BSE 50 Index and the Specialized and Innovative Index closed at 1537.13 and 2581.02 points respectively by the end of February 2026. The BSE 50 Index experienced a monthly fluctuation of 0.36%, while the Specialized and Innovative Index had a fluctuation of 0.39% [2][12]. - The PE (TTM, excluding negative values) for the BSE 50 Index was 48.65 times, while the Specialized and Innovative Index had the lowest PE (TTM, excluding negative values) among similar indices at 69.79 times [23][27]. Industry Performance - In February 2026, only the power equipment industry (2.97%) and the computer industry (2.08%) showed positive average fluctuations, while other industries had negative average fluctuations. Year-to-date, the power equipment and computer industries had impressive average fluctuations of 16.06% and 7.35% respectively, while the automotive industry had the lowest at -5.87% [39][44]. - The PE (TTM, excluding negative values) for the computer and electronics industries was notably high at 149.12 times and 73.42 times respectively, while other industries ranged from 32.79 times to 46.55 times [44]. Liquidity Situation - The trading volume for the BSE 50 Index fluctuated between 16.379 billion and 22.508 billion, while the Specialized and Innovative Index ranged from 4.983 billion to 6.477 billion. The turnover rates for the BSE 50 Index and the Specialized and Innovative Index were maintained at 1.59% to 2.84% and 2.40% to 2.97% respectively [31][33]. Company Announcements and Regulatory Dynamics - The BSE 50 sample stocks underwent periodic adjustments, with three stocks including Jikang Technology being added, while three stocks including Aweit were removed. Several key companies reported their 2025 performance forecasts, with Bianxing Technology showing a revenue and net profit growth of 69.56% and 80.91% year-on-year, respectively [60][62].