CMBC International: Lower target price of GIANT BIOGENE (02367) to HK$53.89, short-term pressure expected to continue.

Zhaojin International released a research report stating that the target price of GIANT BIOGENE (02367) has been lowered by 8% from HK$58.35 to HK$53.89, while maintaining a "buy" rating. Due to pressure on Can Sign short-term operations, the company's revenue forecast for 2025/26 has been adjusted to -3.5% and 13.6%. The report indicates that during the "Double Eleven" period, the company's sales were under pressure, mainly due to lower-than-expected performance of Dabao. On one hand, the company actively adjusted its channel strategy, and on the other hand, it reflected the overall industry competition pressure. However, the management maintained strategic resilience amid industry changes, maintaining price points and consumer experience, increasing the proportion of self-broadcast channels, laying a foundation for long-term growth. The company stated that it will launch a number of high-impact new products next year to drive a new round of growth. To demonstrate confidence in long-term development, the company announced that it has been approved to repurchase up to 104 million shares with its own funds, accounting for 10% of the total share capital. In the short term, Can Sign is constrained by the decline in traffic dividends and intensified competition in the sub-markets, leading to a slowdown in growth. However, steady growth in Cleargold and the commercialization of medical beauty products in 2026 may offset the risk of slowing growth for Can Sign. The bank expects the company to leverage the dual drive of "skincare + medical beauty" to return to the fast lane of growth in 2027.