With the improvement of people’s consumption level and the change in consumption concept, beauty and skincare have become a daily necessity, and the beauty and health industry has ushered in a stage of rapid development. Especially in recent years, many local Chinese brands have rapidly emerged as popular brands among young consumers.
Among them, Giant Biogene is a leader in the bioactive ingredient-based professional skin treatment product industry in China and is the second-largest professional skin treatment product company in China in terms of retail sales in 2021. The Company has officially entered the offering stage in the Hong Kong stock market, adding another high-quality investment target in the biotechnology field, and being the first listed company in collagen.
Proprietary recombinant collagen technology builds core strengths with strong performance growth
In the field of skincare, collagen has been expanding its market share due to its favourable skin regeneration and anti-aging properties. Due to the obvious advantages of recombinant collagen over animal-derived collagen, the market size of functional skincare products based on recombinant collagen is expected to reach RMB64.5 billion (in RMB, the same below) by 2027, surpassing hyaluronic acid to become the top functional skincare product.
In 2000, Giant Biogene developed its proprietary recombinant collagen technology, the first one in the field to be awarded a patent in China. Subsequently, the Company successfully industrialized the technology and became the first company to achieve mass production of recombinant collagen-based skincare products globally. The proprietary recombinant collagen technology has enabled the Company to build a solid barrier in the collagen skincare market and stand out in the fierce market competition. Giant Biogene has been the largest collagen-based professional skin treatment product company by retail sales in China for the latest three consecutive years since 2019.
According to the prospectus, from 2019 to 2021, Giant Biogene achieved revenue of RMB957 million, RMB1.191 billion and RMB1.552 billion respectively, with a compound annual growth rate of 27.39%; in the first five months of 2022, the Company achieved revenue of RMB723 million, representing a year-on-year increase of 38.9%, and continued to maintain an accelerated growth trend. In terms of profitability, Giant Biogene also performed well. In 2019, 2020, 2021 and the first five months of 2022, the net profits of the Company amounted to RMB575 million, RMB826 million, RMB828 million and RMB314 million respectively, representing solid growth.
Keeping recombinant collagen technology as the thread and expanding product portfolio on an ongoing basis
With proprietary recombinant collagen as the common thread of its product branding, Giant Biogene has built up a vast portfolio of professional skin treatment products, which generates spill over effects to the branding of other non-collagen-based products. The Company currently owns eight main brands, including Comfy, Collgene, Keyu, Kehen, Kefuping, Leeyen, SKIGIN and Shengan, covering functional skincare, medical dressings, and functional foods.
“Collgene” and “Comfy”, the flagship brands of Giant Biogene’s recombinant collagen products, were ranked as the third and fourth best-selling professional skin treatment brands in China in 2021, respectively. As of 31 May 2022, the sales of Comfy reached RMB428 million and the sales of Collgene reached RMB238 million, representing an increase of 62.9% and 18% over the same period in 2021, respectively, and accounting for 59.2% and 33.0% of total revenues, respectively.
In addition to the recombinant collagen technology, Giant Biogene has developed and produced several types of rare ginsenosides using its proprietary biomanufacturing technologies and is currently one of the largest recombinant collagen and rare ginsenosides companies globally in terms of manufacturing capacities. The Company’s “SKIGIN” is a high-end skin repair brand based on rare ginsenoside technology.
Furthermore, by expanding product types, Giant Biogene is able to advance its technologies to enter into new product categories to expand its customer reach. Among its self-developed product pipeline, the Company has three Class III medical device products in clinical trials and expects to obtain Class III medical device registration certificates in the first quarter of 2024. From the current clinical trial results, these products are more effective than the control group products, which is expected to drive the injectable products to become one of the main growth areas of the company in the future.
From the medium to long-term perspective, China’s skincare market will grow rapidly and consumers will pay more attention to functional products. Giant Biogene has taken the lead in the market with its unique technological advantage. With the continued expansion of its product portfolio, the Company will capture the growth opportunities in the functional skincare market, strive to increase its market share to support the long-term rapid growth of its business, and fully release its long-term value.