Giant Biogene reported revenue of RMB5,519mn (-0.4% YoY) and attributable net profit of RMB1,915mn (-7.2% YoY) in 2025. The results were broadly in line with our expectations, given the external headwinds and intensified competition that weighed on product sales in 2H25. During the period, gross margin declined 1.8ppts YoY to 80.3%, primarily due to changes in product mix. Looking ahead to 2026E, we expect sales growth to recover gradually, mainly driven by stronger brand promotion for KOMFYMED and Collgene, an expanded product portfolio, and the commercialization of newly approved Class III injectables. Given the intensified competition and expected higher marketing spending, we lower our 2025-28E revenue/ attributable net profit CAGR forecasts from 18%/ 17% to 11%/ 8% and thus lower our TP to HK$38.70 (previous: HK$53.89). We maintain our BUY rating, as we expect earnings pressure to ease progressively through 2026E and injectables to drive medium- to long-term growth. Since 9 Dec 2025, the Company has repurchased shares worth a cumulative ~HK$322mn, indicating mgmt’s confidence in the longterm outlook.
2H25 growth under pressure; 2026E recovery to be driven by enriched product portfolio and stronger brand promotion. In 2025, KOMFYMED reported revenue of RMB4,470mn, down 1.6% YoY, while Collgene grew 9.2% YoY to RMB918mn. KOMFYMED's revenue dropped 22% YoY in 2H25 due to short-term external headwinds. Collgene’s growth was also affected by reduced collaboration with top livestreamers on Tmall and a contraction in the offline distribution. To support the recovery in 2026E, the Company plans to launch several key products, such as KOMFYMED Focus Cream 2.0, new additions to the Focus and Regular series, as well as new products under Collgene. We also expect higher brand investment to help restore sales momentum.
Offline direct sales continued to scale up. Offline direct sales increased 32% YoY to RMB225mn in 2025, with its revenue contribution rising to 4.1% (+1.1ppts). The strong growth was primarily driven by continued expansion of KOMFYMED offline stores (32 stores by end-2025 vs. 18 by end-2024) and broader penetration into professional skincare and mass-market channels. Notably, the Company also made progress in overseas expansion, with KOMFYMED entering Watsons in Singapore and Malaysia, duty-free shops in Korea, and online channels in North America. Although offline direct sales still account for a relatively small portion of total revenue, we expect continued store rollouts and channel expansion to support solid growth in offline direct sales.
Class III injectables approved; commercialization to begin in 2Q26E. Giant Biogene achieved significant regulatory milestones with NMPA approvals for two Class III injectables in Oct 2025 and Jan 2026. We expect the first product to be launched in 2Q26E, followed by the second in 2H26E. Giant Biogene is actively preparing for commercialization, including market research and distributor selection. Leveraging its nationwide sales network and established collaborations with medical institutions, we believe injectables could gradually become a meaningful medium- to long-term growth driver.
Maintain BUY. We lower our 2025-28E revenue/ attributable net profit CAGR forecasts from 18%/ 17% to 11%/ 8%, to reflect intensifying competition. We therefore lower our DCF-derived TP to HK$38.70 (WACC: 10.6%, terminal growth: 3.0%), implying 19x 2026E P/E. However, we expect earnings to bottom out in 2H26E and the injectable products could drive long-term earnings growth. Maintain BUY.