The Zhitong Finance App learned that CMB International released a research report stating that it maintains the “buy” rating of Giant Biotech (02367) and continues to be optimistic about the continued growth in online sales of Juzi Biotech's functional skincare products. It is expected that injectable collagen products will be approved within the year; based on the DCF model, the target price was raised to HK$60.83.

CMB International's main views are as follows:

Giant Biotech announced on May 17 that it would place 33.22 million shares at a price of HK$49.40 per share, accounting for about 3.34% of the company's issued shares and 3.23% of the shares expanded through allotment and issuance of subscribed shares.

The placement price was discounted by approximately 6.7% from the closing price on May 16. The estimated net proceeds from the placement are approximately HK$1,627 million. The use of funds is: 1) Approximately 90% of the funds are intended for core business development and ecosystem layout, including but not limited to investment in brand promotion, marketing and R&D; and 2) around 10% is intended to supplement working capital and general corporate purposes. By the end of 2023, the company had net cash of 2.5 billion yuan and additional financial assets of 1.27 billion yuan. The company's operating cash flow in 2023 was 1.65 billion yuan. The bank expects the company to use sufficient cash reserves to build brand influence and further enrich the product line layout.

Giant Biotech continues to push the new momentum, and the product matrix continues to improve.

Since this year, Kefumei and Colijin have intensively launched a variety of products around key product lines to broaden product categories. In 2024, Kefumei created a focus series focusing on skin sub-health, and launched Focus Cream, Focus Essence, Focus Mask, and Focus Mask. The products use bionic combinations of natural sequence recombinant type I collagen, natural sequence recombinant type III collagen, and mini small molecule recombinant type I collagen peptides to work together to repair the skin barrier, enhance skin elasticity, and achieve firming, anti-wrinkle, brightening and moisturizing effects.

Currently, Kefumei's Focus Cream has topped the Tmall New Face Cream List, and is ranked 11th in the Tmall Face Cream Bestseller List and 8th in the Tmall Face Cream Praise List. According to Chan's mom's data, in April of this year, Kefumei Focus Face Cream's sales reached 25-50 million yuan on Douyin, and the potential for large single products is beginning to show. In addition, the company launched the new Order Mask and Order Cleansing Clay Mask in the Ke Mei Order series, launched a new Collagen Gel Mask in the Collagen Repair series, and upgraded the Restorable Toner 3.0. The Klein brand is focusing on creating a film series in response to consumers' anti-wrinkle and firming needs. This year, it has successively launched film creams, film eye creams, and film eye masks. Currently, Klein Film Cream is ranked 5th in Tmall's new cream product list. According to Chan's mom's data, the sales volume of film cream reached 5 to 7.5 million yuan on Douyin in April.

The “618” promotion is approaching, and we look forward to the beautiful sales performance of the company's cosmetics.

Lead anchor Li Jiaqi launched the “618” pre-sale on May 19, and products such as Kefumei Collagen Stick will once again be launched on Li Jiaqi's live broadcast room. Currently, Kefumei collagen sticks are ranked 7th in the Tmall repair essence hot seller list and 3rd in the Tmall repair essence repurchase list, and the trend of explosions continues. The bank estimates that in 2023, collagen sticks will account for more than 30% of the revenue of the Kefumei brand. The bank believes that collagen sticks will continue to show the strength of a major single product and continue to grow rapidly. At the same time, the bank is looking forward to the rapid release of new products such as the Kefumei Focus Series and the Creigin Film Series during the big promotion period.