Chinese Recombinant Collagen Giant up 52.3% by 2022
- Chaileedo Press
- Mar 28, 2023
- 4 min read
On March 27, Giant Biogene released its first financial report since its IPO. The company's revenue in 2022 was 2.364 billion yuan ($343.4 million), up 52.3% year-on-year.
Its net profit reached 1.002 billion yuan ($145.6 million), up 21% year-on-year. It is worth noting that one of its brands, Comfy, achieved sales to 1.5 billion yuan ($217.9 million).
Combined with information from the prospectus that Giant Biogene released previously, its revenue from 2019 to 2021 will be 957 million yuan ($139 million), 1.19 billion yuan ($172.9 million) and 1.552 billion yuan ($225.5 million) respectively, with a net profit of 575 million yuan ($83.5 million), 827 million yuan ($120 million) and 828 million yuan ($120.3 million) respectively. This means that the company has achieved constant increases in revenue and net profit in four consecutive years.
"Our overall growth in revenue was primarily driven by the growth of sales and revenue of professional skin treatment products, among which, the revenue from functional skincare products demonstrated a faster growth due to our continued efforts to strengthen marketing activities in our omnichannel sales and distribution network, and the successful launch of new products, resulting in the further enhancement of our brand and product influence." Giant Biogene said in its latest financial report.
By business segment, in 2022, Giant Biogene's functional skin care products business revenue was 1.562 billion yuan ($226.9 million), up 66% year-on-year, accounting for 55.5% of its main business. The sales from medical dressings were 760 million yuan ($110.4 million), up 32.2% year-on-year, accounting for 41.3% of its main business.
By sales channel, in 2022, Giant Biogene's revenue from direct sales channels was 1.402 billion yuan ($203.7 million), accounting for 59% of total revenue. Among them, online direct sales revenue through DTC shops was 1.214 billion yuan ($176.4 million), up 51.3% year-on-year. Its online direct sales revenue through e-commerce platforms was 125 million yuan ($18.2 million), up 5.3% year-on-year, and offline direct sales revenue was 63 million yuan ($9.2 million), up 2.7% year-on-year.
By brand, its key brands in the functional skincare segment, Comfy and Collegene, both achieved growth in 2022. In particular, Collegene generated revenue of $618 million. This represents a 26.2% year-on-year increase. Comfy performed particularly well, with revenues reaching 1.613 billion yuan ($234.3 million) in 2022, a 68.2% year-on-year increase.
It is worth mentioning that, according to data from the prospectus that Giant Biogene released previously, from 2019 to 2021, the revenue of Comfy is 290 million yuan ($42.1 million), 421 million yuan ($61.2 million) and 898 million yuan ($130.5 million). And now its revenue exceeds 1.6 billion yuan ($234.3 million), which is rapid growth.
In its financial report, Giant Biogene explained that the product category of Comfy has been expanding from medical devices to functional skincare products. It also launched a number of new products such as the Human-like Recombinant Collagen Restoration Single-Use Essence, Recombinant Collagen Repair Essence Emulsion and Recombinant Collagen Renewing Soothing
Essence Mask.
As we all know, recombinant collagen is one of the hottest sectors in the cosmetic industry since 2022. Giant Biogene itself is a pioneer in this sector. Furthermore, Giant Biogene's strategy works well, which is focusing on R&D and sales.
According to the financial report, the cost of sales of Giant Biogene in 2022 was 369 million yuan, an increase of 86.3% year-on-year, and the selling and distribution expenses were 706 million yuan, an increase of 104% year-on-year.
In this regard, Giant Biogene said that the increase in the cost of sales was mainly due to the increase in product sales. The cost of ingredients increased from 144 million yuan ($20.9 million) in 2021 to 265 million yuan ($38.5 million) in 2022, with a corresponding increase in manufacturing and freight costs. In addition, in order to expand the scale of production, the company increased the number of production staff, thus directly leading to an increase in labour costs. The increase in sales and distribution expenses was mainly due to the rapid expansion of online direct sales channels, which led to an increase in online marketing expenses.
Despite this, Giant Biogene didn’t reduce its investment in R&D. In 2022, Giant Biogene's R&D investment reached 44 million yuan ($6.4 million), an increase of 76.5% year-on-year, while its R&D investment accounted for 1.9% and 1.6% of its total revenue in 2022 and 2021 respectively, showing an increasing trend.
However, it should also be noted that, Giant Biogene has eight major brands, which can be overly dependent on Comfy for performance according to the prospectus as of December 31. By 2022, Comfy has accounted for 68% of Giant Biogene's revenue. How to synergise multiple brands is a problem that Giant Biogene also has to face.
In the face of 2023, Giant Biogene's plans are also clear, namely to increase investment in research and development. It means it will rely on synthetic biology platforms to carry out basic research and continue to develop new recombinant collagen and other bioactive ingredients. It stated that it would continue to polish new products and iterate on existing products with high standards to meet the diversified needs of consumers.
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