HSBC Research lowers the target price for GIANT BIOGENE to 46.4 yuan, maintaining a "Buy" rating

HSBC Research published a report indicating that GIANT BIOGENE (02367.HK) updated its full-year earnings guidance during a conference call on December 2, explaining the main risks to profitability in 2025. Due to growth pressures on the Comfy brand, the bank has lowered its earnings forecasts for 2025-2027 by 17-25%; the medical aesthetics business may still become a positive catalyst in 2026. The "Buy" rating is maintained, with the target price reduced from HKD 69.3 to HKD 46.4, primarily based on the downward revision of earnings expectations.

The report noted that the bank had previously indicated risks in GIANT BIOGENE's full-year earnings guidance for 2025, mainly stemming from doubts raised by KOLs regarding its star product, the one-time recombinant collagen product, on May 24. After the conclusion of the Double 11 online promotion period, management held a conference call on December 2 to update the full-year earnings expectations, having previously predicted a net profit growth of 21-24% and revenue growth of 25-28% for 2025. The latest expectations indicate that net profit in 2025 will record a decline in the mid-single to high-single digits, with revenue remaining flat or slightly declining.

The bank stated that during the Double 11 period, sales of GIANT BIOGENE's Comfy brand fell by 30% year-on-year, while the Collgene brand maintained double-digit growth, suggesting that the profitability risks for 2025 have reached a conclusion