Understanding the Market | GIANT BIOGENE continued to decline nearly 3%, plummeting over 15% yesterday, with Citigroup pointing out its weak start on Double 11
GIANT BIOGENE's stock price opened high and then fell today, with an afternoon decline expanding nearly 3%. Yesterday, it plummeted over 15%, hitting a new low of HKD 40.6 in over a year. Citigroup's research report pointed out that the market's reaction to its weak Double 11 kickoff was excessive, as promotional strategies affected price attractiveness. Citigroup predicts that GIANT BIOGENE's performance will be weak in the third quarter and early October this year, expecting a year-on-year revenue growth of 16% in the second half of the year. The "Buy" rating is maintained, with the target price lowered from HKD 69.4 to HKD 55.4
According to the Zhitong Finance APP, GIANT BIOGENE (02367) opened high and then fell today, with a decline of nearly 3% in the afternoon, after a drop of over 15% yesterday. The stock price hit a low of HKD 40.6 during the day, marking a new low in over a year. As of the time of writing, it is down 2.92%, priced at HKD 40.6, with a trading volume of HKD 678 million.
In terms of news, on the evening of October 15, Li Jiaqi's live streaming room began pre-sales. Citigroup's research report pointed out that after meeting with GIANT BIOGENE's CFO, they believe the market's reaction to GIANT BIOGENE's pre-sale performance decline during the Double 11 first day live stream by mainland internet celebrity Li Jiaqi is excessive. At that time, GIANT BIOGENE's main product was less attractive in price compared to other brands due to a more rigorous promotional strategy. Citigroup stated that although Li Jiaqi's live streaming sales trend is an important indicator of Double 11 performance, its contribution has sharply declined with the growth of other KOLs and its own live streaming sales.
Citigroup predicts that GIANT BIOGENE's performance in the third quarter of this year and the first two weeks of October is relatively weak due to fewer KOL live streams. They expect a year-on-year revenue growth of 16% in the second half of this year, with Tmall expected to decline by 10%, Douyin rising by 25%, JD.com growing by 100%, and offline growth of 10%. Citigroup also anticipates that GIANT BIOGENE's revenue for the fiscal year 2026 will continue to grow at a high rate of 19% from a low base, as there are no negative feedbacks from customers. Given the low base this year, Citigroup expects GIANT BIOGENE's sales to recover growth in the fiscal year 2026, with valuations still attractive; they maintain a "Buy" rating for the stock, lower the earnings forecast, and adjust the target price from HKD 69.4 to HKD 55.4 based on a 20 times price-to-earnings ratio for the fiscal year 2026
