CICC Securities: Maintain a outperform rating on GIANT BIOGENE (02367) with a target price of HK$70.

CICC released a research report stating that it maintains the profit forecast for GIANT BIOGENE (02367) for 2025-2026, with the current stock price corresponding to a P/E ratio of 16/13x for 2025-2026. It maintains an outperforming industry rating and sets a target price of HK$70, corresponding to a P/E ratio of 27/21x for 2025-2026, with 68% upside potential. Key points from CICC: Company Overview On October 23, GIANT BIOGENE announced that three types of medical devices, including "recombinant type I1 subtype collagen freeze-dried fibers," under the company were approved. This product is the first recombinant type I natural sequence collagen facial injection product in China, officially approved through joint review by the device and drug review authorities. The firm is optimistic about the company's landing of the second curve in medical aesthetics, opening up long-term growth potential. Approval of Recombinant Collagen Freeze-Dried Fibers, the first recombinant type I natural sequence collagen facial injection product in China According to the company's announcement, the "recombinant type I1 subtype collagen freeze-dried fiber" under the company was approved as a Class III medical device, indicated for "facial tissue filling to correct dynamic wrinkles in the forehead, including frown lines, forehead lines, and crow's feet." The firm believes that the market for recombinant collagen aesthetic injections is still a blue ocean market, with the company having a certain first-mover advantage. It is expected that the company will be able to tap into the track dividend in the future based on the volume and sales performance of leading companies in the medical aesthetics industry. The firm estimates that the revenue from this product is expected to reach a level of 1 billion RMB in the medium to long term, with broad potential. Adequate preparation for commercialization, B-end channel resources and C-end operational capabilities are expected to boost product volume The company had already actively undertaken commercialization-related preparatory work, including team building, communication with doctors and institutions in the early stage, etc. The company's Class II dressing has been on sale for over 10 years and has covered approximately 1700/3000 public hospitals/private hospitals and medical aesthetic clinics as of 1H25. Products like Keli Golden Starlight Bottle and KERUISI also have a certain market foundation. The firm believes that the channel resources and operational experience can be highly reused, with the strong C-end brand operation experience of the company, which is expected to enhance the volume and market promotion of medical aesthetic products. Rich pipeline reserves for future development, landing of the second curve in medical aesthetics opens up growth space The company has rich pipeline reserves for the future: 1) Non-cross-linked waterlight products: in the registration application stage, it was announced to have entered the review by the CDE drug review center at the end of August; 2) Cross-linked neck wrinkle products: has obtained the qualification for national priority review; 3) Cross-linked nasolabial fold products also progressing smoothly. The firm believes that the approval of the first medical aesthetic product has fully demonstrated the company's technological leadership and safety, and the future landing of the pipeline is expected to further broaden the second growth curve. In addition, the firm believes that the company's cosmetics business is expected to gradually improve with the recovery of Daibo activities and is optimistic about the company's long-term growth potential. Risk Warning: Continuous intensification of industry competition; product registration progress falls below expectations.