Summary of Giant Biogene Holding (2367.HK) Earnings Call Company Overview - Company: Giant Biogene Holding (2367.HK) - Market Cap: HK$58.7 billion / $7.5 billion - Industry: China/Korea Cosmetics & Jewelry Key Financial Highlights - 1H25 Performance: - Sales increased by 23% year-over-year (yoy) to Rmb3,113 million, in line with Goldman Sachs estimates (GSe) [17] - Net income (NI) rose by 20% yoy to Rmb1,182 million, matching GSe [22] - Operating profit grew by 25% yoy to Rmb1,360 million, exceeding GSe by 6% [21] Core Insights - Sales Growth: - Professional skin treatment products sales grew by 23% yoy, with Comfy brand sales up 23% to Rmb2,542 million, and Collgene sales up 27% to Rmb503 million [17] - Cosmetics sales increased by 24% yoy to Rmb2,410 million, while medical device sales rose by 17% to Rmb693 million [17] - Channel Performance: - Direct sales increased by 26% yoy to Rmb2,325 million, with online direct-to-consumer (DTC) sales growing by 134% [17] - Distribution sales grew by 12% yoy to Rmb787 million [18] Margin Analysis - Gross Margin: Contracted by 0.7 percentage points yoy to 81.7%, in line with GSe [19] - Operating Margin: Expanded by 0.9 percentage points yoy to 43.7%, exceeding GSe by 2.4 percentage points due to lower selling and R&D expenses [21] - Net Margin: Declined by 1.8 percentage points yoy to 38.7%, consistent with GSe [22] Guidance and Future Outlook - Full Year Guidance: - Sales growth expected at 25-28% and NI growth at 21-24% yoy [1] - Management plans to invest in brand revitalization in 2H25, anticipating a stronger KOL lineup ahead of Double 11 [2] - Earnings Revisions: - 2025E NI revised to Rmb2.4 billion, reflecting a 16% yoy increase, with sales growth of 25% [23] Valuation and Price Target - Target Price: Remains unchanged at HKD71, implying a 29% upside from the current price of HKD54.85 [1][24] - P/E Ratio: Target 2025-26E P/E set at 25x, based on expected NI growth of 16% and 27% for 2025E and 2026E respectively [24] Risks - Key Risks: - Slower-than-expected growth in the professional skin treatment market - Increased competition - Regulatory risks [24][27] Additional Insights - Operational Efficiency: Improved ROI measured by GPM-Selling expenses ratio, which increased by 0.4 percentage points yoy [1] - Cost Management: Selling and distribution expenses increased by 19% yoy but were lower than GSe, contributing to improved margins [19][20] This summary encapsulates the key points from the earnings call, highlighting the company's performance, future outlook, and associated risks.
巨子生物：2025 年上半年业绩：自营运利润（OP）因管理费用率改善高于预期；维持买入评级