Behind the increasing profits, Juzi Biotech (02367) is still worried about focusing on marketing and neglecting R&D. | erek erek angkat barang, slot thailand, best push gaming slots

On the eve of this year’s Double Eleven, the topic of the beauty brand Huaxizi’s “Kibi Jinjian” became a hot search topic, which made the market think that the sales of beauty products during this year’s Double Eleven might be hit by public opinion.

However, as this year’s Double Eleven pre-sale period came to an end, market analysis data found that the “Huaxizi Incident” did not have much impact on the rising domestic brands. The ranking of domestic products in the Double Eleven beauty field improved significantly, and the leading domestic brands, based on more efficient market feedback and channel operations, focused on product innovation and entered a stage of rapid increase in market share.

This conclusion can also be verified by the stock price trend of the leading medical beauty brand Juzi Bio. Zhitong Finance APP observed that after October 24, the stock price trend of Juzi Biotech first bottomed out at HK$29.2 in the first three trading days, and then continued to exert strength in the next eight trading days, reaching an intraday high of HK$37.35 on November 8. The company's stock price rose by a cumulative maximum of 27.91% in the past half month.

However, Juzi Bio, which owns eight major brands, is still relying on its flagship products Kefumei and Cligen to support the Double Eleven market this time. On the increasingly "crowded" track of recombinant collagen, how long Juzi Bio can maintain its first-mover advantage has become the focus of market attention.

Kefumei is still the main sales force on Double Eleven

Judging from the overall data of this year’s Double Eleven pre-sale period, the GMV of comprehensive e-commerce was 310.5 billion yuan, a year-on-year decrease of 7%, but the GMV of live broadcast e-commerce during the same period reached 98.9 billion yuan, an increase of about 10% year-on-year, continuing to make efforts and continuing the trend of decentralization.

At the same time, looking at the platform structure, Tmall's top 10 skin care brands are relatively stable, with 2 of the top 10 domestic products, Proya and Winona ranking 1st and 8th. Proya has reached the top with a number of popular single products, and its GMV of 1.5 billion+ far exceeds international brands. In the cosmetics category, Caitang’s ranking improved to No. 1, while Mao Geping steadily occupied No. 10. In addition, brands such as Kefumei, Chando, Quadi, and Youshiyan have all entered the TOP20. Domestic products have made great efforts in the construction of large single products in the functional category, and their rankings have made significant breakthroughs.

It is not difficult to see from the above data that in this year’s Double Eleven beauty market, domestic products showed a more prominent upward sales trend than overseas products, and this is also an important market basis for Juzi Biotech to achieve sales breakthroughs.

According to the Zhitong Finance APP, during this Double Eleven, the sales performance of Kefumei and Kelijin under Juzi Biotech were outstanding, and individual products continued to increase in volume.

Specifically, the GMV of Keligen Tmall in the first two hours exceeded the entire period of Double Eleven last year, ranking in the top 3 domestic cosmetics and wound dressing categories, and Douyin ranked in the top three domestic skin care products.

In fact, whether judging from the 2022 annual report or the latest 2023 semi-annual report, Juzi Bio's performance on Double Eleven this time is a continuation of its consistent sales strategy, which is to promote its flagship products Kefumei and Kelijin.

Based on the 2022 annual report data, Juzi Biotech’s revenue in 2022 will increase by 52.3% year-on-year to 2.364 billion yuan. Which can be restored to beautyAchieved revenue of 1.613 billion yuan, a year-on-year increase of 79.7%; Kelijin achieved revenue of 618 million yuan, a year-on-year increase of 17.6%. According to the 2023 semi-annual report released by Juzi Biotech on August 28, even in the beauty market where consumer recovery pressure is high, the company still achieved revenue of 1.606 billion yuan in the first half of the year, a year-on-year increase of 63.0%. It relies on its core product Kefumei. The brand achieved revenue of 1.228 billion yuan in the current period, a year-on-year increase of more than 100%.

It is also worth mentioning that even as the two major products of Juzi Biotech, the revenue share of Kefumei and Keligen has also been further adjusted in the "one decline and the other increase". The overall trend is that the growth of Juzi Biotech is almost entirely driven by Kefumei, and the presence of Kelijin is constantly weakening.

Judging from the prospectus data, 2022 annual report and 2023 semi-annual report data, in 2022, Kefumei and Kelijin achieved revenue of 1.613 billion yuan and 618 million yuan respectively, with year-on-year growth of 79.62% and 17.71% respectively. According to the data disclosed in the prospectus when Juzi Bio was listed, from 2019 to 2022, Kelijin’s total revenue only increased by 28.48%, while Kefumei increased by 456.21%. But by the first half of this year, while Kefumei’s revenue had achieved a year-on-year growth of 100.98%, Kelijin’s revenue had only increased by 6.64% year-on-year.

The “ebb and flow” of revenue growth fully illustrates that although there have been certain changes in the revenue structure of Juzi Biotech in recent years, from a product perspective, the dominant position of the leading brand Kefumei has not changed. And this may be the hidden worry of giant creatures.

Technical barriers may be difficult to maintain, and competition on the track is becoming increasingly fierce

In fact, Kefumei’s core category is medical dressings. Since the price of medical dressings with collagen ingredients is higher than that with hyaluronic acid ingredients, among competing products, the price of Feisini is much lower than that of other companies’ products. The price of Kefumei is similar to that of Chuangfukang. The difference is that Kefumei uses recombinant collagen technology, while Chuangfukang uses collagen extracted from animal sources. Chuangfukang is certified as a Class III device, while Kefukang is a Class II device. Among comparable II medical dressing products, Kefumei does not have a price advantage.

However, thanks to heavy marketing, Juzi Biotech’s Kefumei terminal has been widely recognized by consumers. As of December 29, 2022, Kefumei recombinant collagen dressing ranked second on Tmall’s medical dressing best-selling list.

The above is reflected in the financial report as a sharp increase in sales expenses. From 2019 to 2021, the company's sales and distribution expenses were 93.8 million yuan, 158 million yuan, and 346 million yuan respectively, accounting for 27.1% of total revenue from 9.8%. By 2022, this number will further reach 29.86%, and the amount will also reach 706 million yuan, a year-on-year increase of 104%, which is much higher than the current revenue growth rate.

In contrast, from 2019 to 2021, Juzi Biotech’s R&D expenditures accounted for only 1.2%, 1.1%, and 1.6% of total revenue in the same period. The cumulative R&D investment in three years was less than 50 million yuan. Until 2022, its R&D expenditures increased by 76.5% year-on-year to 44 million yuan..

A direct result of such a cost structure is that although Juzi Bio has a large number of SKUs, there are only 4 types of medical devices in its product system, and due to unequal marketing tilt, Juzi Bio's performance growth throughout 2022 is mainly due to the rapid increase in functional skin care products, with a year-on-year increase of 81.4%; while the revenue of the medical dressing business only increased by 18.3% year-on-year.

On the other hand, as the popularity of the hyaluronic acid industry continues to decline, the head of the medical beauty industry has begun to enter the collagen track, and the market will also place the hope of replicating the "hyaluronic acid myth" on collagen.

In the early days of the development of the recombinant collagen industry, companies generally chose to use cells to cultivate collagen. The advantage of this is that it is highly similar to the human body, but the cost is too high. Later, low-cost bacterial culture became mainstream and was divided into three technical routes: Escherichia coli, Pichia pastoris and Saccharomyces cerevisiae. The E. coli route steps are very complex, require high technical requirements for manufacturers, and have certain industrial thresholds.

However, as leading companies invest more in the field of recombinant collagen, different manufacturers have begun to establish differentiated selling points in this field. In addition to Juzi Bio on the current recombinant collagen track, companies that have industrialized this technology in China include Jinbo Bio, Chuangjian Medical, Juyuan Bio, Marubi and Jiangsu Wuzhong.

In other words, Juzi Biotech's subsequent market position may be challenged, but it is difficult to find a product in Juzi Biotech's current product pipeline and R&D pipeline that can bring it a second performance growth curve. This also creates some uncertainty about the company's future valuation growth.