Citigroup: Raised target price for GIANT BIOGENE (02367) to 93.7 Hong Kong dollars, rating "buy"

Citibank released a research report stating that GIANT BIOGENE (02367) had a strong start to the "618" promotion on the Tmall platform, with a significant increase in ranking. The bank raised its earnings forecasts for each year from 2021 to 2027 by 5% to 18% to reflect the increase in revenue forecasts. The target price was raised from the original HK$78.1 to HK$93.7, equivalent to a forecasted P/E ratio of 34 times from the original 28 times for this year, reflecting better growth prospects and aligning with the valuation multiples of peers in mainland China, and maintaining a "buy" rating on GIANT BIOGENE. The bank expects growth momentum to come from new customers (60% to 70% of the customer base) and new product combinations. The flagship product, "Collagen Stick", will drive a 20% increase in average spending per customer, and the sales proportion of "Focus Repair Cream" will increase from the original low- to mid-single digits to the mid-to-high single digits. Management is currently maintaining its 2025 performance guidance, and will evaluate it after the results of the "618" promotion are finalized by the end of June.