Key takeaway
The company released its 2025 annual results announcement. Affected by industry competition and external public opinion, revenue and profit are under short-term pressure. The performance meets our previous expectations. The Comfy brand continues to launch new products. The product structure is continuously optimized. The Collgene brand focuses on anti-aging. It maintains steady growth. Multiple Class III medical device registration certificates are successfully approved. Medical aesthetics products will soon enter the commercialization stage. This is expected to open a second growth curve. Outlook for 2026: 1) Focus on the launch and channel volume expansion of Class III medical aesthetics device products; 2) Strategically transform to "multi-brand, multi-category, and multi-channel" and strengthen the self-operated brand system. As a leading enterprise in the domestic recombinant collagen field, the company actively adjusts its business strategy. We are optimistic about the company returning to a healthy growth track.
Event
The company released the 2025 annual results announcement and dividend payout announcement The company released its 2025 annual results announcement. The revenue in 2025 was RMB5.519bn, down 0.4% YoY. The net profit was RMB1.915bn, down 7.1% YoY. The board of directors recommends the payment of a final dividend of RMB0.54 per share and a special dividend of RMB0.67 per share for the year ended December 31, 2025. The total is RMB1.21 per share.
Quick Take
Short-term performance growth slows down, and brand operation shows resilience. In 2025, the company revenue was RMB5.519bn, down 0.37% YoY. The net profit was RMB1.915bn, down 7.15% YoY. The adjusted net profit was RMB1.96bn, down 8.9% YoY. The short-term performance pressure is mainly affected by intensified industry competition and external public opinion. The short-term growth of core major single products has slowed down. The company continues to improve its refined operation capabilities. It consolidates the growth of star single products and the upgrade and iteration of core products. Coupled with the rapid volume expansion after the launch of new products, this is expected to drive core brands to resume healthy growth.
The performance of the two major brands diverges, and the product matrix is upgraded and iterated. By brand, the revenue of the Comfy brand in 2025 was RMB4.47bn, down 1.6% YoY. The revenue of the Collgene brand was RMB918mn, up 9.2% YoY. The revenue of other professional skin care brands was RMB109mn, down 21.0% YoY. The revenue of health food and other products was RMB22mn, up 17.8% YoY. Comfy brand continues to launch new products, and product structure is continuously optimized: (1) Sales of star products fluctuated due to influencer livestreaming, but market recognition continued to rise, and the company officially launched the first proprietary recombinant type IV collagen-added Collagen Stick 2.0 during the year, which is expected to extend the life cycle of the mega product; (2) Product matrix is constantly improved, and the newly launched Comfy Zhenyu Mixiu series, which adds specially developed type IV thermoplastic collagen for the first time, focuses on repairing thermal damage after medical aesthetics, and has received positive feedback in offline brand retail channels; coupled with the rapid and healthy growth of new products such as Focus Cream, it continues to contribute to revenue growth. Collgene brand focuses on anti-aging and continues steady growth, mainly benefiting from: (1) Collagen Great Demon King 3.0 version has been upgraded in core ingredients, formula construction, and packaging vision, further strengthening the mental recognition of anti-aging smear mask categories, with good market feedback; (2) The company actively expands online channels, and brand awareness is further enhanced.
Online operations face challenges, and offline channels continue to expand touchpoints. The company in 2025 (1) Online DTC direct sales: achieved a revenue of RMB3.402bn, down 5.2% YoY, mainly because the revenue from influencer livestreaming was under pressure due to intensified industry price competition and external shocks, but the company partially offset the downward pressure on performance by setting up new self-livestreaming rooms and strengthening self-operated operations. (2) Online e-commerce platforms: achieved a revenue of RMB508mn, up 34.8% YoY, mainly benefiting from the strong growth of channels such as JD.com relying on "medical device and cosmetics synergy" and refined operations. (3) Offline direct sales: achieved a revenue of RMB225mn, up 32.2% YoY, and continued to expand offline sales touchpoints. The company's products entered about 1,700 public hospitals, about 3,000 private hospitals and clinics, over 130,000 chain pharmacy stores, and about 6,000 CS/KA stores. By the end of 25, it already had 32 Comfy brand specialty stores nationwide. (4) Distribution channels: achieved a revenue of RMB1.383bn, down 1.5% YoY, mainly because the company actively strengthened channel sales control to maintain the product price system. (5) Overseas market: Increase overseas market coverage. Comfy has officially entered Watsons in Singapore and Malaysia, Shilla Duty Free in Seoul, South Korea, and North American online channels. Brand influence is expected to continuously improve.
Profitability slightly declined, and operating quality remained healthy. In 2025, the company's gross profit margin was 80.3% (-1.8 pcts), and the net profit margin was 34.7% (-6.7 pcts). The decline in gross profit margin was mainly affected by changes in product category structure (changes in the proportion of high-margin essence collagen sticks and some medical dressings), logistics delivery packaging upgrades, and related cost increases brought by the operation of new plants. In terms of expenses, the selling expense ratio was 37.25% (+1.0 pct), the administrative expense ratio was 4.7% (+0.1 pct), and the R&D expense ratio was 1.61% (-0.3 pct). The increase in the selling expense ratio was mainly due to the company's continuous increase in brand promotion and channel construction investment. The decrease in the R&D expense ratio was mainly because some of the company's R&D projects entered the achievement transformation stage. Currently, the company has over 140 projects under research and 209 authorized and pending patents. It continues to deeply cultivate the research of type I and type IV collagen and rare ginsenosides. The subsequent advancement of projects under research will continuously contribute growth sources to the company.
Future outlook: 1) Focus onClass III device commercialization to create new performance growth drivers. The company has established an independent medical aesthetics business department and actively incubated new medical aesthetics brands such as Liyan.Class III medical device products recombinant type I alpha 1 subtype collagen lyophilized fibers and recombinant type I alpha 1 subtype collagen and sodium hyaluronate composite solution were respectively in 25M10 and 26M1 approved. As the company accelerates the launch preparation of approved products and continues to deeply cultivate the R&D and approval of subsequent pipelines, it is expected to gradually create new performance growth drivers. 2) Strategically upgrade "multi-brand, multi-category, multi-channel" to return to a healthy growth track. The company has continuously proven its new product R&D and promotion capabilities in recent years. Comfy collagen stick 2.0 and Collgene big devil 3.0 have been launched as scheduled. The contribution of products such as Comfy focus cream, Collgene film c ream, and film eye cream is expected to continue to increase. As the company continues to advance refined channel operations and product matrix construction, and increases the construction of self-operated positions, we expect that in 2026, the two major brands Comfy and Collgene are expected to return to a healthy growth track.
Earnings forecast and investment rating
We forecast that from 2026 to 2028, the company's revenue will be RMB6.082bn, RMB6.809bn, and RMB7.820bn, up 10.2%, 12.0%, and 14.8% YoY, respectively. The net profit attributable to shareholders of the parent company will be RMB2.002bn, RMB2.228bn, and RMB2.545bn, up 4.6%, 11.3%, and 14.2% YoY, respectively. This corresponds to EPS of RMB1.87, RMB2.08, and RMB2.38, respectively, implying PE of 13X, 12X, and 11X. We maintain "Buy" rating for the company.
Risks:
Growth of the functional skincare market falls short of expectations; expansion of online direct sales channels falls short of expectations: Currently, in terms of categories, the revenue of the company's functional skincare business accounts for over 70% of the total revenue, which is the most important source of revenue for the company at present. In terms of channels, online channels account for over 60%. If the growth of the functional skincare market and the expansion of online channels fall short of expectations, it will affect the growth of the company's main business.
R&D progress falls short of expectations: The company currently has a rich R&D pipeline. If the R&D progress of related varieties such as Class III medical devices falls short of expectations, it may affect future revenue growth.
Risk of negative news and product events affecting the company's brands: The company's main revenue currently comes from the two major brands Comfy and Collgene. Negative events may have a certain impact on brand operations.
Risk of reliance on a single distributor.
Impact of adverse medical events on the industry may exceed expectations.