Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 66.15, representing a potential upside of 29.2% from the current price of HKD 51.20 [4][21]. Core Insights - The company has shown strong online sales growth during the Double Eleven shopping festival, with its two main brands, Kefu Mei and Keli Jin, achieving GMV growth rates of over 80% and over 150% respectively compared to the previous year [2]. - The report highlights the successful marketing strategies on platforms like Douyin, which have significantly boosted sales, particularly for Kefu Mei, which saw a GMV increase of 120% on Douyin [2]. - The introduction of new products has also contributed to growth, with Kefu Mei's collagen stick and Keli Jin's new cream series driving substantial sales increases [2]. Financial Performance - Sales revenue is projected to grow from RMB 5,099 million in FY24E to RMB 9,187 million in FY26E, reflecting a compound annual growth rate (CAGR) of approximately 33.6% [3][22]. - Adjusted net profit is expected to rise from RMB 1,971 million in FY24E to RMB 3,130 million in FY26E, indicating a strong profitability trajectory [3][22]. - The company maintains a healthy net debt ratio, with a forecasted net debt ratio of -75.3% by FY26E, indicating a strong balance sheet [3]. Sales Growth and Market Position - Kefu Mei ranked 12th in the Tmall fast-moving consumer goods sales ranking and 4th in the skincare brand ranking during the Double Eleven event, showcasing its competitive position in the market [2][8]. - Keli Jin's new product launches have resulted in a GMV increase of 109% year-on-year, with significant contributions from its new cream and eye cream products [2]. - The report notes that the overall skincare category in e-commerce is experiencing robust growth, with Kefu Mei and Keli Jin leading the charge [12][13]. Earnings Forecast Adjustments - The earnings forecasts for FY24-26 have been slightly adjusted upwards, with revenue and profit estimates reflecting the strong sales momentum and successful product launches [16][20]. - The report anticipates that the company's gross margin will remain stable, with a projected gross margin of 82.20% in FY24E [16][20]. Valuation Metrics - The target price of HKD 66.15 corresponds to a 25x adjusted P/E ratio for FY25E and a 20x adjusted P/E ratio for FY26E, indicating a favorable valuation compared to industry peers [4][18]. - The DCF analysis suggests a strong intrinsic value for the company, with a calculated equity value of HKD 68.02 million [18].
巨子生物：双十一收官，双品牌强势增长