Citigroup: Reaffirms "Buy" rating on GIANT BIOGENE (02367) with target price raised to HK$61.

Citibank released a research report stating that it has increased GIANT BIOGENE's (02367) revenue forecast for 2024-2026 by 4.2-4.5% and net profit forecast by 4.7-4.9%, to reflect the group management's better-than-expected new guidance after strong performance on Double Eleven and rising controllable platform expenses. The target price has been raised by 3% to 61 Hong Kong dollars from 59.5 Hong Kong dollars, with a reiterated "buy" rating. The report states that, after revision, Citibank predicts that GIANT BIOGENE's revenue in 2024 will increase by 52% year-on-year, and net profit will increase by 40% year-on-year, in line with management guidance. It is also estimated that net profit in 2025-2026 will increase by 27%/21% respectively, benefiting from revenue growth of 30%/26% respectively. Therefore, taking into account the slight dilution of equity after the share issuance in April 2024, Citibank predicts a compound annual growth rate of 29% for the group's net profit over 3 years, and a compound annual growth rate of 28% for earnings per share.