China's Recombinant Collagen Giant GIANT BIOLOGY Submitted Prospectus to Hong Kong Stock Exchange
- Chaileedo Press
- May 7, 2022
- 3 min read
On May 5, Beijing time, GIANT BIOLOGY officially submitted a prospectus to the Hong Kong Stock Exchange, with Goldman Sachs and CICC acting as joint sponsors. GIANT BIOLOGY is the world's first company to achieve mass production of recombinant collagen skincare products, with brands such as Comfy and COLLGENE.
On May 5, Beijing time, Giant Biogene Holding Co., a Chinese skincare products company, officially submitted a prospectus to the Hong Kong Stock Exchange for listing on the mainboard, with Goldman Sachs and CICC acting as joint sponsors. GIANT BIOLOGY said in the prospectus that the net proceeds from the IPO will be mainly used for R&D investment to strengthen the R&D team through recruitment, expanding R&D facilities and conducting testing and verification research, etc.
It is reported that GIANT BIOLOGY intends to raise funds from $500 million to $1 billion.
GIANT BIOLOGY's main business is the design, development and production of professional skincare products with recombinant collagen as the key bioactive ingredient. At present, GIANT BIOLOGY's product portfolio has a total of 105 SKUs, covering eight major brands of functional skincare products, medical dressings and functional foods, namely Comfy, COLLGENE and so on.
According to the data from FROSTF SULLIVAN, the GIANT BIOLOGY is the second largest professional skincare product company in China in 2021 (in terms of retail sales revenue). It has been the largest collagen professional skincare product company in China (in terms of retail sales revenue) for three consecutive years since 2019 and it is the first company in the world to achieve mass production of recombinant collagen skincare products.
GIANT BIOLOGY can achieve 90% purification and recovery of the Escherichia. target proteins after a round of processing. As of the last practicable date, GIANT BIOLOGY's recombinant collagen production capacity is 10,880.0 kg per year, which is one of the largest companies in the world with a recombinant collagen production capacity. In addition, the purity of the Recombinant Collagen of GIANT BIOLOGY is 99.9%, which is in accordance with the industry standard of medical-grade materials.
In terms of the financial data, from 2019 to 2021, the operating income of GIANT BIOLOGY was about $143 million, $178 million and $232 million respectively, with a net profit of about $86 million, $124 million and $124 million, the adjusted net profit of about $86 million, $101 million and $125 million respectively, and the gross profit margin of 83.3%, 84.6% and 87.2% respectively.
It is worth mentioning that most of the income of GIANT BIOLOGY is excessively dependent on the two brands of Comfy and COLLGENE. In 2019, 2020 and 2021, the sales revenue of the speciality skincare products under these two brands accounted for 80.6%, 82.4% and 91.7% of total revenue respectively.
GIANT BIOLOGY said in the prospectus that the sales of these two brands will continue to be a major part of the company's total sales revenue. Since the sale of the products relies on consumer perceptions of their brands and products, any damage to the brands (such as negative comments and product issues) will lead to a decline in the sales of the products. If they are unable to maintain product sales, price levels and margins for these two major brands, or unable to increase the sales revenue from other brands, their total revenue and profitability may be adversely affected.
The Chinese investment circle joked that they cannot have the opportunity to invest in the financing of GIANT BIOLOGY. At the end of 2021, GIANT BIOLOGY completed only one round of financing before the IPO and the investors brought together several first-line institutions such as Hillhouse Group, CPE, JINYI CAPITAL and Legend Capital. However, the specific amount of financing is not disclosed.
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