1. Financial Performance Overview

• Revenue: RMB 5,518.5 million, largely flat year-on-year (-0.4%).
• Gross Profit: RMB 4,433.4 million, down 2.5%.
• Profit Before Tax: RMB 2,350.3 million, down 4.4%.
• Net Profit: RMB 1,914.7 million, down 7.1%.
• Adjusted Net Profit: RMB 1,959.9 million, down 8.9%.
• Basic Earnings Per Share: RMB 1.83, down 12.9%.
• Diluted Earnings Per Share: RMB 1.81, down 12.1%.
• Dividend Proposal: Final dividends of RMB 0.5390 per ordinary share and special dividends of RMB 0.6714 per ordinary share.
• No Bank Borrowings: The company remains debt-free with a 0% gearing ratio.

2. Business and Operations

• Industry Position: Giant Biogene is a leader in China’s bioactive ingredient-based professional skin treatment sector, focusing on products with recombinant collagen as the key ingredient.
• Product Portfolio: Includes professional skin treatment products and rare ginsenosides technology-based functional foods.
• R&D Investment: RMB 88.8 million invested in research and development, representing 1.6% of revenue.
• Resilience Amidst Challenges: The company acknowledged external shocks and competitive pressures that moderated short-term growth, but emphasized strengthened long-term capabilities and consumer trust.

3. Capital Management and Shareholder Returns

• All Net Proceeds Utilized: All proceeds from previous fundraising rounds (Global Offering and Vendor Placings) have been fully deployed, including:
  • R&D team expansion
  • Manufacturing capacity expansion
  • Omni-channel sales and distribution network enhancement
  • Brand recognition and marketing initiatives
  • Operation and information systems improvements
  • Working capital and general corporate uses
• Major Placings in 2025:
  • April 2025: Placing and Subscription raised HK\$2,294 million; 90% allocated to core business development and ecosystem, 10% to liquidity and corporate purposes.
  • May 2024: Previous placing raised HK\$1,627 million; similar allocation.
• Share Buyback: In December 2025, the company repurchased 5,200,000 shares at prices between HK\$33.48 and HK\$36.48, totaling HK\$182,615,564, subsequently cancelled. This action is intended to improve financial indicators (e.g., earnings per share) and demonstrate management confidence in the company’s long-term prospects.

4. Material Risks & Uncertainties

• Rapid Industry Changes: The company operates in a sector where consumer demand, trends, and regulatory environment can shift quickly.
• Market Acceptance Risks: Multiple factors affecting product success, including R&D progress, commercialization timing, safety and efficacy, pricing, public perception, sales and distribution effectiveness, and regulatory changes.
• Financial Risks:
  • Foreign currency risk is considered insignificant but monitored.
  • Credit risk is low due to deposits in trustworthy financial institutions and ongoing receivables monitoring.
  • Liquidity risk is managed through maintaining adequate cash reserves.
• ESG and Compliance: No material breaches or non-compliance with laws and regulations in 2025. ESG targets set and monitored, including waste emissions, greenhouse gases, energy use, quality, and safety.

5. Corporate Governance and Shareholder Communication

• Strong Corporate Governance: The company complies with Hong Kong Listing Rules and maintains high standards of transparency and accountability.
• Board Composition: No competing business interests among directors; robust risk management and internal controls in place.
• Shareholder Rights: Shareholders have access to clear communication channels, including annual meetings, financial reports, and direct contact with the company.
• Dividend Policy: Future dividends depend on profits available from subsidiaries, subject to PRC regulations and statutory reserves.

6. Additional Noteworthy Points

• Employee Incentive Plans: RSU and Share Option Schemes in place to attract and retain key talent. No new RSUs granted post-listing, but options granted under the 2023 Share Option Scheme.
• No Material Investments, Acquisitions, or Disposals: No significant investments, acquisitions, or disposals during 2025.
• No Material Litigation: The company was not involved in any material litigation or arbitration during the year.
• Public Float Maintained: Company maintains the sufficient public float (>25%) required by the Listing Rules.
• Audit Committee: Consistent oversight of financial reporting, risk management, and internal controls.

7. Potential Share Price Movers

• Dividend Announcement: The proposed final and special dividends may be price sensitive, offering attractive returns to shareholders.
• Share Repurchase: The buyback and cancellation of shares could positively affect earnings per share and be perceived as a signal of confidence from management.
• Full Deployment of Fundraising Proceeds: Demonstrates effective capital management and commitment to growth and shareholder value.
• Resilience and Strategic Investment in R&D and Expansion: Despite profit declines, the company is investing in innovation and capacity, positioning itself for future growth.

8. Outlook

• The company plans to continue building on its scientific and technological strengths, expand manufacturing and sales channels, and enhance brand recognition. Management and Board remain confident in long-term prospects.

Disclaimer

This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should conduct their own due diligence and consult professional advisors before making investment decisions. The information herein is based on official company disclosures and may be subject to change.

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