Juzi Biotech Holdings Limited (hereinafter referred to as 'Juzi Biotech') successfully listed on November 4, 2022. The company plans to issue 2,260.88 million H shares, of which 90% will be international offerings and 10% will be public offerings. The issue price per share is HK$24.30, raising a net amount of approximately HK$550 million.
During the process of listing in Hong Kong this time, Frost & Sullivan mainly undertook the following tasks: helping the issuer accurately and objectively understand its positioning in the target market, using objective market data to discover, support, and highlight the issuer's competitive advantages, assisting the issuer, investment banks, and other intermediaries in completing the relevant parts of the prospectus (such as overview, competitive advantages and strategy, industry overview, business, and other important chapters), facilitating communication between the issuer and the Exchange and investors, helping investors quickly understand the market ecosystem and competitive landscape, and assisting the issuer in completing feedback on various industry-related issues from the Exchange.
Investment highlights
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The company is a leader in the professional skin care product industry based on bioactive ingredients;
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The company owns a widely recognized technology aesthetic brand, as well as a diversified and continuously expanding product portfolio;
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The company adopts a dual-track sales strategy of 'medical institutions + general consumers' for collaborative omni-channel sales and distribution networks;
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The company's powerful end-to-end manufacturing platform ensures that its technology-empowered products meet consumers' dynamic needs in a timely manner.
According to a report by Frost & Sullivan:
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The company is the second-largest professional skin care product company in China in 2021 (by retail sales), and has been the largest professional collagen skin care product company in China for three consecutive years since 2019 (by retail sales).
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The flagship brands of the company's collagen products, Corail and Kera Beauty, were ranked third and fourth in terms of best-selling professional skin care products in China in 2021 (by retail sales), respectively.
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The market for recombinant collagen products in China will grow at a compound annual rate of 42.4% from 2022 to 2027, indicating broad prospects for industry development.
Overview of the Chinese Collagen Product Market
As the most abundant protein in the human body, collagen is an ideal ingredient for skincare and skin care products, such as (i) efficacy skincare products; (ii) medical dressings; (iii) general skincare products; and (iv) skin rejuvenation applications. Given collagen's hemostatic and cell regeneration properties, it is also an ideal biomaterial for medical and health products, such as implantable medical devices.
The main applications of collagen in the field of skin beauty and health in 2021
Note:
(1) In China, the field of skin beauty refers to products used for skin care and rejuvenation.
(2) Percentage of the skin care market
(3) Percentage of the skin rejuvenation application market
(4) Percentage of the efficacy skincare market
(5) Percentage of the medical dressing market
Source: Frost & Sullivan report
Overview of the Professional Skin Care Product Market in China
As a niche market within the professional skin care product market, China's market for professional skin care products based on bioactive ingredients increased from RMB 121 billion in 2017 to RMB 444 billion in 2021, and is expected to further grow to RMB 2810 billion by 2027, based on retail sales.
Market scale of professional skin care products in China (by retail value)
2017 - 2027 (estimated)
Note:
(1) Others include ergotamine, polyglutamic acid, and alginate.
Source: Frost & Sullivan report
Competitive landscape of skin care products in China
In 2021, the overall market scale of professional skin care products in China was RMB 566 billion. In terms of retail sales, in 2021, the market scale of professional skin care products containing recombinant collagen in China was RMB 9.4 billion.
In 2021, among approximately thousands of industry participants, the top five accounted for 44.7% of the market share in China's professional skin care product market, indicating a moderately concentrated competitive landscape.
In 2021, among the top five market participants, four were domestic Chinese companies, accounting for approximately 38.0% of the market share, while the fifth was an international company, accounting for about 6.7%. The following table lists the top five professional skin care product companies in China by retail sales volume in 2021:
Top 5 Professional Skin Care Product Companies in China by Retail Sales in 2021
Data source: Annual reports and websites of professional skin care product companies, Frost & Sullivan report
Overview of the Chinese Recombinant Collagen Product Market
In terms of retail sales, the market scale of recombinant collagen products in China increased from RMB 1.5 billion in 2017 to RMB 10.8 billion in 2021, with a compound annual growth rate of 63.0%. It is expected that this will further increase to RMB 108.3 billion by 2027, with a compound annual growth rate of 42.4%. Correspondingly, the penetration rate of recombinant collagen products in the entire collagen product market increased from 15.9% in 2017 to 37.7% in 2021, and it is expected to further increase from 46.6% in 2022 to 62.3% in 2027.
Technical path, market scale segmentation of China's collagen product market
(Retail sales-based)2017 - 2027 (estimated)
Source: Frost & Sullivan report
The main applications of collagen include efficacy skincare products, medical dressings, and skin rejuvenation products. According to retail sales in 2021, the market size of efficacy skincare products based on recombinant collagen was RMB 4.6 billion, significantly higher than that of efficacy skincare products based on animal-derived collagen (RMB 1.6 billion). JuZi Biotechnology is the only recombinant collagen company among the top five market participants in the overall efficacy skincare market.
Based on retail sales in 2021, the market size of recombinant collagen medical dressings in the collagen medical dressing market was RMB 4.8 billion, significantly higher than that of animal-derived collagen (RMB 2.5 billion). Among the top five market participants in the entire medical dressing market, JuZi Biotechnology and Company G mainly use collagen as a main component. JuZi Biotechnology uses recombinant collagen, while Company G uses animal-derived collagen.
According to retail sales in 2021, animal-derived collagen accounted for the majority of market share in the collagen skin rejuvenation application market. The main market participants include domestic and international companies in China.
Market segmentation of the application scale of recombinant collagen products in China
(Retail sales-based)2017 - 2027 (estimated)
Note:
(1) Other areas include hair care products and other applications.
Source: Frost & Sullivan report
Enhance the growth momentum of recombinant collagen penetration
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It has powerful effects and can solve an increasing number of problematic skin conditions:
Urban lifestyles, such as staying up late and prolonged exposure to blue light from electronic devices, can lead to various problematic skin conditions, including sensitive skin, premature aging, chronic eczema, and allergies. These can cause stinging, itching, burning redness, dryness, scaling, peeling, bumps, and urticaria. The increasing prevalence of problematic skin conditions highlights the need for effective and scientifically tailored skin care solutions that are specific to individual skin conditions. Recombinant collagen has a high level of bioactivity and biocompatibility, capable of promoting cell growth and supporting high cell adhesion performance. Therefore, it can provide powerful effects in repairing damaged skin barriers and addressing such problematic skin conditions.
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Consumers are continuously enhancing their understanding of the technical background of recombinant collagen:
With the increasing emphasis on skincare awareness education through online and offline media, consumers have a higher level of understanding about the ingredients behind product formulas, efficacy, safety, and scientific technology. In recent years, the biological characteristics and efficacy of recombinant collagen have received more clinical data and scientific support. As a result, consumers have gained a deeper understanding of the biological advantages of recombinant collagen and its medical-grade applications, which has become a powerful driving force for purchasing recombinant collagen products.
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Develop online sales and marketing channels:
The development of online sales and marketing channels has boosted the retail sales of skincare products. From 2017 to 2021, the market size of skin care products increased from RMB 317.2 billion to RMB 558.1 billion in terms of retail sales, and it is expected to further increase from RMB 644.1 billion in 2022 to RMB 1159.7 billion in 2027. The proportion of e-commerce sales of skin care products in China increased from 44.7% in 2017 to 73.5% in 2021, and is expected to further increase to 84.7% in 2027. Therefore, the e-commerce sales of skin care products in China increased from RMB 141.8 billion in 2017 to RMB 410.1 billion in 2021, and are expected to further increase from RMB 502 billion in 2022 to RMB 981.9 billion in 2027.
More and more consumers are choosing e-commerce channels due to convenience, a variety of products and services, and competitive prices. With the increase in internet penetration and mobile device adoption rates in China, domestic enterprises and brands often use new media and e-commerce platforms to attract target consumers, including the younger generation willing to accept innovative ingredients such as recombinant collagen, thereby achieving high sales conversion rates. For example, content marketing through cooperation with opinion leaders for promotion and live broadcasts is one of the popular marketing tools.
Frost & Sullivan has extensive research experience in the consumer retail industry and has assisted many well-known enterprises in successfully listing on capital markets. Successful listings include: China COSCO (1880.HK), Ming Chuang Youpin (9896.HK), Jiulongwang Food (1927.HK), Vesync (2148.HK), Blue Moon (6993.HK), Poplar Mart (9992.HK), Ming Chuang Youpin (NYSE:MNSO), Nongfu Spring (9633.HK), Fengxiang Food (9977.HK), China Feihai (6186.HK), Top Sports (6110.HK), China National Tobacco International (6055.HK), Youpin 360 (2360.HK), Wugu Flour Mill (1837.HK), Baby Tree (1761.HK), Deying Holdings (2250.HK), Bingshi International (1705.HK), Golden Cat Silver Cat (1815.HK), Miming Life Department Store (8473.HK), Nissin Foods (1475.HK), Debao Group (8436.HK), Seiko China (NASDAQ:SECO), Barbie Bebe (8297.HK), Asia Grocery (8413.HK), Chow Haid Duck (1458.HK), COFCO Foods (1610.HK), Dali Foods (3799.HK), Vientiane International (0288.HK), Chow Tai Fook (1929.HK), Jumei Youpin (NYSE:JMEI), and others.
Since the listing of the first batch of companies on the Sci-tech Innovation Board in July 2019, Frost & Sullivan reports have been widely cited in the prospectuses of leading Sci-tech Innovation Board listed companies in the industry. These include: Kangwei Century (688426.SH), Jincan Protein (688137.SH), Nuo Cheng Jianhua (688428.SH), Aopu Mai Biotech (688293.SH), MicroPort Neurophysiology (688351.SH), Mengke Pharmaceutical (688373.SH), Yifang Biotech (688382.SH), Jicui Yaokang (688046.SH), Haichuang Pharmaceutical (688302.SH), Rongchang Biotech (688331.SH), Rendu Biotech (688193.SH), Shouyao Holdings (688197.SH), Heyuan Biotech (688238.SH), Yaxin Security (688225.SH), Xidi Micro (688173.SH), Mawei Biotech (688062.SH), Yahong Medicine (688176.SH), BeiGene (688235.SH), Jiamhe Meikang (688246.SH), Dizhe Medicine (688192.SH), Novogene (688105.SH), Chengda Biotech (688739.SH), Geke Micro (688728.SH), Huaxi Biotech (688363.SH), Junshi Biotech (688180.SH), Zhejiang Oncology (688266.SH), BeiGene (688177.SH), Shenzhou Cells (688520.SH), Perela (603605.SH), etc., and are considered one of the most powerful, professional, and influential industry research institutions in the sector.
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