Joysun Bio Medical Beauty New Product Launch, Maintains Buy Target Price HK$46

Overview

This report is based on the latest information from Goldman Sachs' participation in Joysun Bio's new medical beauty product launch event and investor conference, reaffirming the company's 'Buy' rating and HK$46 target price. The report core focuses on the commercialization prospects of the company's first Class III Medical Device '753 Collagen Needle', channel performance during the June 18th promotion, and progress in fulfilling full-year performance guidance. Goldman Sachs believes that although facing short-term promotional and cost pressure, the company occupies brand mindshare in the anti-aging track and expands the medical beauty new curve which holds greater long-term value, making current valuation attractive.

Core views

Medical Beauty New Curve Opens, 753 Collagen Needle Has Differentiated Barriers. The company officially released its first recombinant Type I alpha-1 subunit collagen freeze-dried fiber (753 Collagen Needle), which is the first facial injection product in China based on native human sequence, possessing a 753 amino acid long-chain fragment. Clinical data shows significant improvement visible after 90-180 days following three treatment courses, and can stimulate regeneration of multiple types of collagen. This product is positioned for dynamic wrinkle repair rather than simple filling, with higher technical barriers. Management expects the medical beauty sector to possess tens of billions of RMB sales potential in the future, with 3 other products in research targeting indications such as neck lines subsequently. Channel side will utilize existing dealer networks to accelerate distribution and incentivize terminal clinics through high gross margins. June 18th Sales Trend Positive, Channel Structure Continues to Optimize. Management revealed that the total sales volume YoY growth for the June 18th full period (May-June) is expected to exceed double digits, and May has already returned to positive growth. Tmall and Douyin platform performance improved synchronously, JD.com was only affected by slight temporal disturbance. More critically, live e-commerce structure is becoming healthier: dependence on top streamers (such as Li Jiaqi) decreased, store broadcasts and mid-tier streamer contribution increased, which helps improve revenue quality and profit margin stability. Although low unit price combinations accounted for slightly more under platform subsidies, it was not active price reduction by the brand, impact on overall gross margin is limited. Full-Year Performance Guidance Stable, Strategic Focus Leaning Towards Long-Term Share. H1 sales rhythm met expectations, Q1 base was relatively high causing YoY pressure, but online channels gradually warmed up in May-June. Gross margin expected to decline slightly due to new products not yet ramping up and raw material cost increases, but full-year profit target remains unchanged. Goldman Sachs believes that at this stage, acquiring consumer mindshare and wallet share is more important than short-term profit margins. In addition, the company reaffirmed an approx 60% dividend payout ratio and views M&A as a supplement method, focusing on advanced raw material technology and complementary categories (such as men's care, fragrances, etc.).

Analysis framework

Goldman Sachs' analysis logic follows the framework of "New Product Catalyst + High-Frequency Data Verification + Long-Term Strategy Assessment". First, obtain first-hand product parameters and clinical data through participating in the new product launch event to judge the technical scarcity and market space of the 753 Collagen Needle; Second, utilize high-frequency tracking data of the key sales node June 18th to verify the effectiveness of the company's adjustments in online channels and demand resilience; Third, combine management statements on profit margins, dividends, and M&A to evaluate whether short-term fluctuations damage long-term value. Valuation uses Sum-of-the-Parts approach, applying different PE multiples to Cosmetics and Medical Devices businesses, and considering A-H Share premium discount, finally deriving the target price.

Methodology notes

• Valuation MethodPE/PEG valuation

  Segmented PE Weighted Valuation Method

  For companies with both consumer goods and medical device attributes, institutions did not adopt a single PE, but gave cosmetics and medical devices industry benchmark PE (both 27x) respectively with 50%/50% weights, then applied an 80% discount to reflect A-H price difference, finally arriving at a 22x target exit multiple. This method can more accurately price the mixed growth logic of diversified business companies.

• Competition and Strategy FrameworkMoat / competitive advantage

  Technical Homology and Long-chain Protein Barrier

  When analyzing the competitiveness of medical beauty injection products, the report focuses on two technical indicators: '100% Human Source Homology' and '753 Amino Acid Long-chain'. This belongs to a typical analysis paradigm of building a moat based on product physical attributes: long-chain means more active sites and longer metabolism cycles, directly converting into durable clinical efficacy, distinguishing from short peptides or animal source competitors.

• Industry/Industrial Analysis FrameworkPenetration S-curve

  Identify Penetration Opportunities in Sub-indications

  The report points out that forehead wrinkles and other specific areas are 'relatively under-penetrated opportunities'. This is the application of S-curve analysis at the micro level: when the general anti-aging market enters the growth phase, increments often come from deep excavation of sub-scenes. If new products can solve specific pain points, they can open new growth slopes in mature markets.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Joysun Bio (2367.HK)

  Core Beneficiary: Medical Beauty New Product Unlocks Second Growth Curve, June 18th Sales Validates Channel Reform Effectiveness

  Strengths

  Possesses China's first native human-sequence recombinant Type I collagen injection certificate; Skincare and medical beauty traffic interoperability; Mature dealer network; Ample cash flow and stable dividends

  Weaknesses

  New products still at initial launch stage, economies of scale not yet realized; Raw material and packaging cost increases squeeze margins; Some SKUs affected by seasonality

  Comparison

  Compared to pure skincare companies, possesses Class III equipment license barrier; Compared to traditional hyaluronic acid manufacturers, owns differentiated regenerative material technical path

  Risks

  Professional skin therapy market competition intensifies or growth falls short; New product R&D or commercialization failure; Regulatory policy change risk

Key data

• 12-Month Target PriceHK$46.00Based on 22x 2027 expected PE discounted, implied 68.1% upside
• June 18th Sales Growth GuidanceDD% yoyManagement expects combined May-June growth YoY over double digits, May already turned positive
• Medical Beauty Product Sales PotentialBillions of RMBManagement outlook for medical beauty sector long-term revenue scale
• Dividend Payout RatioApprox 60%Maintaining historical high level, flexibly adjusted according to CAPEX needs
• Xiaohongshu User Assets43 millionCollgene brand cumulative users, among them 67.3% also involved in medical beauty field
• 753 Collagen Needle Clinical Efficacy90-180 DaysDuration of improvement visible after three treatment courses

Impact & implications

For Joysun Bio, the successful listing of 753 Collagen Needle marks a substantial leap from functional skincare to the professional medical beauty field. If commercialization goes smoothly, it will significantly increase average ticket size and brand professionalism. The stabilization and recovery of June 18th data alleviated market concerns about weak consumption and channel adjustment, proving the company is shifting away from reliance on a single top streamer towards a more sustainable growth model. For the industry, the approval of recombinant collagen injection products enriches the supply of non-hyaluronic acid fillers, possibly accelerating domestic substitution process. Goldman Sachs emphasizes that current focus should be on market share and mindshare occupation rather than short-term profit margin fluctuations, such strategic trade-off is reasonable during industry upgrade period.

Risks

• Professional skin therapy market growth slows down or competition worsens beyond expectation
• New product development fails or commercialization falls short after listing
• Unfavorable changes in medical device or cosmetic regulatory policies occur

What to watch

• Actual sales ramp-up speed of 753 Collagen Needle post-listing and number of terminal institutions covered
• Approval and listing progress of second compound solution product (expected Q3 2026)
• Whether H2 gross margin can stabilize and rebound as new product scale effect releases
• Implementation status of M&A strategy, especially potential transactions for advanced raw materials or overseas brands