China's Leading Collagen Enterprises Landed in HKEx

According to the prospectus, Giant Biogene has been the largest collagen skin care company in China for three consecutive years since 2019.

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(Credit: Giant Biogene)

On November 4, Giant Biogene (02367. HK) landed on the Hong Kong Exchanges at the price of 25 Hong Kong dollars per share. Giant Biogene is known by some industry insiders as "the first collagen company listed in Hong Kong”.

The prospectus states that it is "a leader in the professional skin care products industry based on bioactive ingredients in China".

According to Frost & Sullivan, Giant Biogene is the second-largest professional skin care products company in China in 2021 (with a retail sales revenue of 6 billion yuan). And based on the prospectus, it has been the largest collagen professional skin care products company in China (by retail sales) for three consecutive years starting in 2019.

Currently, there are 105 SKUs in the Giant Biogene product portfolio, covering eight major brands of efficacy skin care products, medical dressings, and health food products, including Comfy, Collgene, Keyu, Kehen, Kefupin, Liyan, Xinxin, and Shengan.

As of the latest prospectus, Giant Biogene's revenue for 2019, 2020, 2021 and the first five months ending May 31, 2022, was 956 million RMB (about $130.9 million), 1.19 billion RMB (about $0.163 billion), 1.552 billion RMB (about $0.212 billion), and 723 million RMB (about $99.05 million).

According to the prospectus, Giant Biogene contains two main business segments: professional skin care products and health food and others, of which the former has grown to 97.7% (as of May this year). And this cannot be done without the outstanding contribution of the two flagship brands of Giant Biogene, Comfy and Collgene. The combined revenue of the two flagship brands of Giant Biogene exceeds 80% of the company's revenue in 2019-2021, and reaches 91.7% in 2021.

To date, Comfy and Collgene are already the third and fourth best-selling brands, respectively, in the professional skin care products industry in China in 2021 (by retail sales). According to the prospectus, in 2021, the retail sales of Comfy and Collgene were 2.9 billion RMB (about $0.397 billion) and 2.7 billion RMB (about $0.369 billion), respectively, and they had a repurchase rate of approximately 42.9% and approximately 32.4% on Tmall Mall, respectively.

(Credit: Giant Biogene)

It is worth mentioning that Giant Biogene said: "Direct sales business, especially online direct sales business, will be the focus of the company's sales and marketing efforts in the future." The prospectus shows that from 2019 to 2021, Giant Biogene's revenue from online direct sales will be 158 million RMB (about $21.6 million), 307 million RMB (about $42 million) and 644 million RMB (about $88 million), respectively, accounting for 16.5%, 25.8% and 41.5% of total revenue in the same period, and further increasing to 315 million RMB (about $43 million), or 43.6%, in the first five months of 2022.

CHAILEEDO interviewed the relevant person in charge of Giant Biogene about the development plan of 1-3 years after the list. The person said that among the company's pipeline products, there are three Class III medical device products that have entered the clinical trial stage and are expected to obtain Class III medical device registration certificates in the first quarter of 2024. These injectable products will be one of the main growth areas for the company in the future.

At present, in addition to Giant Biogene, Trauer and Jinbo Bio, which are in the same sector, are also accelerating their pace to the capital market.

Source: Giant Biogene prospectus

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