Giant Biogene reported 1H25 revenue of RMB3,113mn, up 22.5% YoY and representing 46% of our prior full-year estimate, broadly in line with historical seasonality. Gross margin declined slightly to 81.7% (-0.7ppts YoY) mainly due to a more diversified product mix. We expect gradual recovery in online sales and influencer live-streaming through 2H25E. With a 110bps YoY reduction in the selling expense ratio in 1H25, the Company has sufficient marketing budget to support 2H25E marketing initiatives, in our view. Sales growth on JD accelerated significantly in 1H25, as evidenced by a 134% YoY increase in direct-to-platform e-commerce sales. We expect the Company’s total revenue to grow 21.4% YoY in 2H25E.
　　Comfy brand: resilient growth with successful portfolio expansion. In 1H25, Comfy's revenue increased by 23% YoY to RMB2,542mn, driven by solid performance across multiple product lines. Second-tier products such as Collagen Toner and Lotion (胶原水乳) and Hydration Series (吨吨系列) outpaced the Company’s overall growth. Focus Cream surpassed its 2024 revenue, reaching over RMB200mn in 1H25. The newly launched Precise and Intensive Repair Series (帧域密修系列) entered Sephora China in August, with encouraging initial sales performance. The broadening product portfolio is supporting a more diversified growth engine, while the flagship Collagen Stick (胶原棒) maintained strong customer acquisition capabilities, with new customers accounting for over 60% of sales in 1H25.
　　Collgene brand: online potential is being unlocked. In 1H25, Collgene’s revenue reached RMB503mn, up by 27% YoY, driven by strong online momentum. The upgraded Collage Mask King 3.0 (大膜王 3.0) ranked TOP4 on Tmall’s Mask Hot Sales List and TOP1 on JD.com’s Nourishing Mask List during the 618 Shopping Festival. However, offline channel contraction continues to drag Collgene’s overall growth. Given the declining share of offline sales in Collgene’s revenue mix, we anticipate a pickup in growth momentum from 2H25E onward driven by robust online sales.
　　Expecting influencer live-streaming recovery in 2H25E. In August, Li Jiaqi launched the variety show The Chinese Beauty Shop (巴黎合伙人), in which the core technologies of several Comfy’s key products were introduced. The show generated over 100 million cumulative exposures, significantly boosting brand visibility. Top Douyin KOL Sun Jian also live- streamed Collagen Mask King 3.0 in Aug. Looking ahead to September and October, the Company plans further collaborations with leading influencers on Tmall and Douyin, , which should further boost online sales in 2H25E.
　　Maintain BUY. We maintain our BUY rating while slightly lowering our 2025E revenue growth forecast to 22%, reflecting continued offline pressure for Collgene in 2H25E. Based on our DCF model, we revise down our TP to HK$71.30 (WACC: 10.9%, terminal growth: 3.0%), implying 29x 2025E P/E.