New addition to the A-share "collagen recombination" track: Creat Health Medical, backed by LV and Shiseido, launches IPO

On January 8th, Jiangsu Chuangjian Medical Technology Co., Ltd. (referred to as "Chuangjian Medical") initiated the IPO filing under the guidance of CITIC Securities.

The reason why Chuangjian Medical's listing has attracted attention is because it focuses on recombinant collagen, which is currently scarce in the market. Currently, the only company in the A-share market that specializes in recombinant collagen products is Jinbo Biology (832982.BJ), which has become the only stock on the North Exchange with a share price exceeding 200 yuan.

Chuangjian Medical's advantage lies in its ability to produce both recombinant type I and type III collagen, as well as recombinant type XVII collagen. Its products have been included in the international cosmetic raw material catalog, which has expanded its business in the international cosmetic raw material supply.

Furthermore, Chuangjian Medical is also promoting the use of recombinant type XVII collagen for hair loss, which is currently its competitive advantage that sets it apart from other types of recombinant collagen.

It is worth mentioning that Chuangjian Medical has a strong lineup of external shareholders.

Global luxury goods leader LVMH Group (MC.PA), Japanese cosmetics leader Shiseido (4911.T), and other well-known international capital have participated in the financing of Chuangjian Medical through private equity investments.

However, as projects related to medical aesthetics are not always smooth sailing when pursuing IPOs on the Shanghai and Shenzhen stock exchanges, Chuangjian Medical's listing may still face potential uncertainties.

Star PE "Darling"

Following the listing of Jinbo Biology as the "first A-share recombinant collagen stock" on the North Exchange, a new player may enter the A-share market.

Recently, Chuangjian Medical, which focuses on recombinant human collagen, has submitted A-share IPO filing documents to the Jiangsu Securities Regulatory Bureau.

As the guiding institution for Chuangjian Medical, CITIC Securities plans to conduct assessment and evaluation of its guidance work by May 2024 and prepare for the IPO.

If everything goes smoothly, Chuangjian Medical is expected to complete the guidance filing in 2024 and embark on the journey of A-share IPO.

This is also a capital feast for the various investment institutions behind Chuangjian Medical.

In August 2022, investment institutions such as Xiamen Ziyue Equity Investment Partnership Enterprise (Limited Partnership), DHVC, and Hualitai Pharmaceutical Group participated in Chuangjian Medical's Series A financing, with a total financing scale of nearly 200 million yuan.

Furthermore, in September 2023, Chuangjian Medical announced that investment institutions such as L Catterton under LVMH Group and CITIC CLSA Capital participated in its Series B financing, with a total financing scale exceeding 200 million yuan.

This means that in just over a year, Chuangjian Medical has already raised about 400 million yuan in financing.

It is worth mentioning that the founding shareholders of Chuangjian Medical have previous experience in the capital market.

According to the guidance materials, individual Qian Song directly holds 48.43% of Chuangjian Medical's shares, ranking as the controlling shareholder. Among them, Qian Song's father is Qian Fuqing, the chairman of Fullon (Hong Kong) Holdings Limited (referred to as "Fullon Group"). The controlled company, Chuangsheng Holdings, was listed in Hong Kong in 2010, making it the first orthopedic medical device company from mainland China to be listed in Hong Kong.

In 2013, medical device company Stryker (SKY.N) acquired 61.72% of Chuangsheng Holdings' shares held by Qian Fuqing for HKD 5.9 billion. After Chuangsheng Holdings was acquired by foreign capital, Qian Fuqing founded Fullon Group, which currently operates in the fields of biotechnology and medical devices.

According to Tianyancha, although Fullon Group does not directly hold equity in Chuangjian Medical, its subsidiary, Fullon Medical Equipment Group Co., Ltd., still indirectly holds 1.10% of Chuangjian Medical's equity through Changzhou Zhongjian Longyue Venture Investment Center (Limited Partnership).

The official website shows that Chuangjian Medical's products include recombinant collagen types I, III, and XVII.

However, Xinfeng (ID: TradeWind01) found through the Drug Administration that Chuangjian Medical does not hold a medical device registration certificate for a product named "recombinant collagen type XVII".

In response, Xinfeng (ID: TradeWind01) also called Chuangjian Medical staff to verify the certification status of the recombinant collagen type XVII product. They stated that the naming rules for recombinant collagen have changed, and the specific model is not included in the application for registration. However, their recombinant collagen type XVII product has obtained a medical device registration certificate, mainly using recombinant collagen as the application name.

From the specific registration information, Chuangjian Medical obtained approval from the Drug Administration in August 2023 for the listed model "recombinant collagen freeze-dried fibers," which is the same as the introduced recombinant collagen type XVII. It is mainly used for the care of superficial wounds, small wounds, laser, photon, fruit acid peeling, and post-microplastic surgery.

However, this is not the only function of recombinant collagen type XVII.

In December 2023, Damao Micro-needle Hair Transplant announced a collaboration with Yuebaisheng Biotechnology (Beijing) Co., Ltd., a subsidiary of Chuangjian Medical, to promote clinical trials of recombinant collagen type XVII for hair loss.

This also highlights the significant difference in function between recombinant collagen type XVII and the well-known recombinant collagen type III, which mainly plays a role in wound repair and filling support.

Public information shows that Chuangjian Medical is the world's first company to independently develop and mass-produce recombinant collagen type XVII.

Whether Chuangjian Medical can enter the capital market and attract attention with recombinant collagen type XVII is highly anticipated.

In fact, due to the scarcity of targets and the widespread application of collagen in medical aesthetics, Jinbo Biotechnology, the only A-share company specializing in recombinant collagen, is currently enjoying the pursuit of the capital market.

On January 9th, Jinbo Biotechnology's PE (TTM) reached 71 times, and it is also the "most expensive" stock on the Beijing Stock Exchange. Wind data shows that on the same day, Jinbo Biotechnology's closing price reached as high as CNY 240.98 per share, making it the only stock on the Beijing Stock Exchange with a price exceeding CNY 200. From the perspective of business sectors, the layout of Chuangjian Medical is quite similar to that of Jinbo Biology. Chuangjian Medical not only provides collagen raw materials and OEM services for beauty brands, but also has its own brand "Yuebai Zhi Ji", which offers various types of collagen terminal products.

With the progress of Chuangjian Medical's IPO process, the market is paying continuous attention to whether A-shares will form a situation of collagen protein dominance.

Intense Competition

There are still many variables for Chuangjian Medical to successfully promote its A-share IPO.

Referring to past cases, the IPO process of medical beauty projects in the Shanghai and Shenzhen stock exchanges has not been smooth. The operating entity of the "Chuangfukang" medical beauty mask, Chuanger Biology, withdrew its application materials during the registration process of the Science and Technology Innovation Board. Jinbo Biology also chose to withdraw its materials during the IPO process on the Science and Technology Innovation Board.

Currently, the Beijing Stock Exchange is becoming an important choice for the listing of medical beauty projects, but these companies are trying to remove the label of "medical beauty" during the application for listing.

After transferring to the Beijing Stock Exchange, Jinbo Biology made a commitment of "not relying on medical beauty business in the future" during the inquiry stage, but deleted the relevant statement after passing the review;

Wuhan Qizhi Laser Technology Co., Ltd. (referred to as "Qizhi Laser"), which is sprinting for listing on the Beijing Stock Exchange and entering the medical beauty optoelectronic equipment field, modified the statistical caliber of its revenue in the application materials.

During its listing on the New Third Board, Qizhi Laser divided its revenue into categories such as beauty equipment, urology equipment, spare parts, and maintenance technical services. In 2022, the revenue from beauty equipment reached 195 million yuan, accounting for 79.59% of the total.

However, on September 5, 2023, the eve of the application for listing on the Beijing Stock Exchange, the statistical caliber of product revenue in the financial reports from 2020 to the first quarter of 2023 was changed to phototherapy, laser surgical equipment, and accessories.

Choosing the listing time and sector may also be a test for Chuangjian Medical.

From the industry perspective, the competition in recombinant collagen is also fierce.

In June 2021, Jinbo Biology's recombinant Type III human collagen freeze-dried fiber obtained approval from the National Medical Products Administration (NMPA) and became the first approved manufacturer at that time.

But less than 3 years later, in January 2024, there were already over 100 approved products of recombinant Type III human collagen on the market. Currently, the NMPA has approved a total of 137 related products of recombinant Type III human collagen, all of which have medical device registration certificates.

Among the many approved products of recombinant Type III human collagen, Jinbo Biology's significant advantage lies in its products being used for facial dermal tissue filling to correct dynamic wrinkles in the forehead area (including frown lines, forehead lines, and crow's feet).

In comparison, Chuangjian Medical's approved recombinant Type III human collagen is mainly used for wound repair.

This means that Chuangjian Medical needs to compete in the market for wound repair with nearly a hundred products of recombinant Type III human collagen.

Currently, Chuangjian Medical's main advantage lies in obtaining the medical device registration certificate for recombinant Type XVII collagen, but this is not a product unique to Chuangjian Medical. In February 2023, Jinbo Biotech's medical recombinant XVII humanized collagen dressing was approved by the Drug Administration for listing, mainly used for wound repair.

Currently, the market may have more expectations for the recombinant XVII collagen product in terms of its ability to expand into markets beyond wound repair.

It is highly anticipated whether Chuangjian Medical can achieve breakthroughs in other areas such as hair loss with recombinant XVII collagen.