China Merchants International remains bullish on the rapid growth of Giant Biotechnology's skincare category, expecting injection-type collagen products to be approved in Q1 2025.
According to Zhitong Finance APP, China Merchants International released a research report stating that it maintains a "buy" rating for Giant Biotechnology (02367) and continues to be bullish on the company's rapid growth in the skincare category, with expectations that injection-type collagen products will be approved in Q1 2025. Slightly raised the company's FY24-26 profit forecast, based on the DCF model, increasing the target price to HKD 66.15 (WACC: 10.9%, perpetual growth rate: 3.0%).
CMB International's main points are as follows:
In 2024's singles' day sales wrap-up, the two core brands, Cofumei and Colagen, showed strong online growth.
During the Singles' Day sales period (October 8 to November 11), the online all-channel GMV of Kefu Mei and Keli Jin increased by over 80% and over 150% year-on-year respectively, showing acceleration compared to this year's '618'. Kefu Mei and Keli Jin experienced explosive growth on the Douyin platform, with year-on-year increases of over 100% and over 500% during the Singles' Day sales. According to the brand transaction rankings released jointly by Tianxia E-commerce and Tmall (October 21 to November 11), Kefu Mei ranked 14th in the Tmall fast-moving consumer brand sales list and 12th in the skincare brand sales list, ranking third among domestic brands. Kefu Mei ranked fourth in Douyin e-commerce's total skincare brand list during the Singles' Day promotions, and third among domestic brands.
The singles' day sales promotion kicked off in October, with Cofumei and Colagen showing strong growth.
In 2024, major platforms began their singles' day sales promotions earlier than in previous years, generally starting from mid to early October, about ten days earlier than in 2023. Combining the start of singles' day promotions and scheduling impacts, statistics from the Magic Mirror database indicate that in October 2024, Cofumei's online GMV saw a strong year-on-year increase of 90%, with GMV on Tianmao Taobao and Douyin platforms growing by 83% and 120% year-on-year, respectively. Cofumei's successful marketing investment on the Douyin platform, such as building a matrix of self-broadcasting rooms, drove Cofumei's rapid growth on the Douyin platform.
Cofumei collagen sticks continue to experience high growth, with impressive performance from new products.
The classic product Cofumei's reconstructed collagen dressing has retained the TOP1 position in the wound dressing category on Tianmao. The core bestseller, Cofumei collagen sticks, has maintained the TOP1 position in both the facial essence and liquid essence categories on Tianmao, and has topped the liquid essence category on Douyin. According to statistics from the Magic Mirror database, in October 2024, Cofumei's facial essence category on Tianmao Taobao saw a year-on-year GMV growth of 156%. The firm believes this was mainly contributed by the collagen sticks, which continue to experience rapid growth. Launched in April 2024, the Focus Cream ranked second among the best-selling domestic products in the repair cream category on Tianmao. According to statistics from the Magic Mirror database, in October 2024, Cofumei's lotion/cream category on Tianmao Taobao saw a year-on-year GMV increase of 333%, becoming the second-largest category by GMV for the Cofumei brand, mainly due to the rapid market penetration of the Focus Cream. Additionally, the Cofumei Order Point Acne Stick launched in June secured the TOP1 position in the balancing oil-water facial essence sales ranking on jd.com. The firm believes that the continuously enriched product matrix will drive long-term growth for the brand.
The new products from Keli Jin are gaining traction, and their growth potential is being rapidly unleashed.
According to statistics from the Magic Mirror database, the online GMV for Keli Gold in 10M24 saw a strong year-on-year growth of 109%, outpacing the Kefu Mei brand; among them, GMV on Tmall, Taobao, and Douyin platforms grew by 65% and 138% respectively. Keli Gold's new film cream and film eye cream brought new growth momentum. The Magic Mirror database shows that benefiting from the new film series, Keli Gold's lotion/cream category and eye care category experienced a year-on-year surge of 180% and 6,549% respectively in GMV on Tmall and Taobao in 10M24.
