Failed to IPO's Trauer Focuses on Collagen

Chinese research skincare brand Trauer has announced Chinese actress Jin Jing as the official product ambassador for its Collagen Series, which claims to repair the skin barrier with its Collagen Sodium Hyaluronate Essence, an innovative combination of collagen and sodium hyaluronate. The product is sold in its flagship store on Tmall, a major e-commerce platform in China, for a price of $46.2.

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Trauer has been focusing on medical skincare for 18 years, with a focus on bioactive collagen products for sensitive skin repair and post-laser surgery repair. The series of products are mainly used for the auxiliary treatment of wounds, promote the hemostasis and repair of wounds, and can be used for the auxiliary treatment of acne, dermatitis, eczema, and skin allergy diseases. The products include collagen dressing, collagen sponge, etc., of which collagen dressing is one of the main products for the auxiliary treatment of dermatological diseases.

At present, there are 28 SKUs in Trader's Tmall flagship store, the main categories are mask and essence, and the best selling is Trauer Collagen Dressing with two packs, priced at $8.97, with a total sales volume of 1 million+.

Trauer has developed core technology active collagen with strength repair and deep water locking effect. As we all know, collagen has been widely distributed in the skin, bones, tendons, and other parts of the animal body, accounting for 30%-40% of the total protein in the human body, playing a very key role in maintaining the function and shape of the skin. When collagen is lost, the skin will lose its elasticity and gradually sag with wrinkles.

The common types of collagen on the market in China, such as gelatin and hydrolyzed collagen, are not biologically active. On the other hand, the active collagen of Trauer has a unique reticulation structure, which can strongly shrink water and promote the growth of epithelial cells, and is biologically active.

According to Frost & Sullivan report, the market size of medical device class dressing products increased from $34.5 million in 2016 to $627 million in 2020, at a CAGR of 105.7%. It is expected that the market size of medical device dressing products will reach $3.021 billion by 2025.

It is worth noting that Trauer is a brand of Guangzhou Trauer Biotechnology Company(hereinafter Trauer Bio). Founded in 2002, Trauer Bio is a high-tech enterprise that applies the key technology of active collagen biomedical material preparation to research and develops, produce and sell active collagen raw materials, medical devices, and biological skin care products. Class III collagen dressing.

According to the classification of whether the products contain collagen or not, products of Trauer Bio can be divided into two categories: collagen products and non-collagen products. Its collagen products have been the main source of revenue for Trauer Bio, accounting for more than 90% of its revenue from 2017 to 2019.

Around 2019, the Chinese aesthetic medicine market emerged, and medical dressings used as post-operative repair became the entry product for many beauty seekers to enter the aesthetic medicine. Under the promotion of marketing terms such as "aesthetic medicine mask and aesthetic medicine dressing", the performance of Trauer Bio soared, creating a total revenue of more than $45 million in both 2019 and 2020. Even from 2017 to 2020, the gross margin of Trauer Bio exceeded 75%.

Between October 2014 and June 2020, Trauer Bio was listed on the New Three Board Stock. Later, due to the year-on-year growth of revenue, Trauer Bio planned to The Science and Technology Innovation Board in June 2020. Trauer Bio was hailed as the "first stock of Aesthetic Medicine masks" at that time. But the company's application for registration was withdrawn in December 2021 after it passed the listing committee.

However, after pressing the termination button for listing on the board, Trauer Bio turned its plans to the Beijing Stock Exchange. On January 4 of this year, Trauer Bio submitted to the Guangdong Securities Regulatory Bureau a public offering of shares to unspecified qualified investors and listed on the Beijing Stock Exchange for counseling filing. At present, Trauer Bio's listing counseling filing has been accepted.

However, with the strengthening of China's regulation of the aesthetic medicine industry, the "aesthetic medicine mask" directly turned from the "bonus period" into the "decline".

Previously, the National Medical Products Administration announced that "in accordance with the management of medical devices, medical dressings named should be in line with the requirements of "Medical Device Generic Naming Rules", shall not contain 'beauty' 'health care and other promotional words. Shall not contain the exaggerated scope of application or other misleading, deceptive content. Therefore, there is no concept of a 'mechanical mask', and medical device products cannot use 'mask' as their name.

The 2021 annual report of Trauer Bio shows that in 2021, Trauer Bio's revenue was $36 million, down 20.8% year-on-year and its net profit attributable to the parent company was $5.17 million, down 63% year-on-year. Among them, skin care product sales decreased by $6.88 million compared with 2020, down 43% year-on-year. Thus, it seems that the relevant policies may have an impact on Trauer Bio.