China's Giant Biogene trades up after $70m Hong Kong IPO
Giant Biogene, a China-based producer of skin treatments that use bioactive ingredients, gained nearly 10% on debut following a HKD 549.4m (USD 70m) Hong Kong IPO.
The company, which was established in 2000 and launched its first product in 2009, raised just one round of private funding – a pre-IPO round last October of CNY 7.36bn (USD 1bn). Participants included Hillhouse Investment, CPE, Legend Capital, Yunfeng Capital, Oceanpine Capital, Gaorong Capital, CICC Capital, BA Capital, and the wealth management platform of CDH Investments.
Giant Biogene reportedly sought to raise up to USD 500m through its IPO but scaled back the offering amid market volatility. The company sold 22.6m shares for HKD 24.30 apiece, which represented the bottom end of the indicative range, according to a prospectus.
The stock closed at HKD 26.70 on November 4, a 9.8% premium to the IPO price. It posted further gains on November 7, closing at HKD 31.50 to give Giant Biogene a market capitalisation of approximately HKD 31.2bn.
The company claims to be the first globally to develop and commercialise skin treatment products using recombinant collagen, which is regarded as a suitable alternative to animal collagen. It received China’s first medical device registration for recombinant collagen-based products.
Frost & Sullivan ranked Giant Biogene as the second-largest professional skin treatment player in China last year. Its flagship brands, Collgene and Comfy, were the third and fourth-best sellers in the market. China’s overall professional skin treatment products market was worth CNY 56.6bn in terms of retail sales value in 2021, and Giant Biogene accounted for 1.1% of that.
The company has 106 product lines across eight major brands covering medical dressings and functional foods, as well as skincare. Nearly all its revenue comes from skincare products.
Revenue reached CNY 1.55bn in 2021, up from CNY 1.19bn the previous year. Over the same period, net profit rose marginally from CNY 826.5m to CNY 828.1m. Approximately 55% of revenue is generated through sales by third-party distributors, while 37% is from direct-to-consumer (D2C) stores on platforms like Tmall, JD.com, Douyin, Xiaohongshu, and Pinduoduo.
“With 22 years of development and unremitting efforts under the leadership of the company's management, Giant Biogene has achieved excellent results and has become a pioneer enterprise in the field of biosynthetic materials and products in China,” said Richard Li, president of Legend Capital, in a statement.
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