Overview
Marubi Biotechnology is a leading beauty company in China, renowned for its excellence in "eye care" and has the world's largest and most professional eye skin research center. The company's brands "Marubi", "Chunji" and "Passional Lover" mainly cover the fields of anti-aging, functional skin care and cosmetics.
Performance review
In the first three quarters of 2024, the company's operating income was 1.95 billion yuan (RMB, the same below) with a year-on-year increase of 27.07%; the gross profit margin was 74.63% with a year-on-year increase of 3.79 percentage points; the net profit attributable to shareholders of listed company was 239 million yuan with a year-on-year increase of 37.38%; the net profit margin was 12.28% with a year-on-year increase of 0.92 percentage points, which caused by the further optimization of the company's product structure; the sales expense ratio was 54.85% with a year-on-year increase of 3.08 percentage points, mainly due to the increase in traffic costs of the Douyin platform and intensified industry competition; the gross sales margin was 19.78% with a year-on-year increase of 0.72 percentage points; the net cash flow generated by operating activities was 68 million yuan with a year-on-year increase of 0.84%; EPS was 0.6 yuan with a year-on-year increase of 39.53%.
In the third quarter of 2024, the company's operating income was 600 million yuan, with beauty products performing the best. The revenue from eye products was 124 million yuan with a year-on-year increase of 22.28%. Both sales and price increased, sales increased by 11.68% year-on-year, and unit price increased by 9.49% year-on-year; the revenue from skin care products was 215 million yuan with a year-on-year increase of 15.14%. Although sales decreased, the unit price increased significantly by 43.07% year-on-year; the revenue from cleansing products was 55 million yuan with a year-on-year increase of 12.25%, sales almost unchanged compared with the same period of last year, and unit price increased by 11.22% year-on-year; the revenue from beauty products was 202 million yuan with a year-on-year increase of 54.11%. Thanks to the price-for-sale exchange, sales increased significantly by 84.66% year-on-year, and the unit price decreased by 16.55% year-on-year.
Industry Analysis
The National Bureau of Statistics released the retail sales data of consumer goods from January to February 2025. From January to February, the total retail sale of consumer goods was 8373.1 billion yuan with a year-on-year increase of 4.0%. Among them, the retail sale of cosmetics in January and February was 72 billion yuan which hit the highest in history with a year-on-year increase of 4.4%. According to data from the China Association of Fragrance Flavour and Cosmetic Industries, the total online transaction amount of cosmetics in January and February, 2025 was 95.82 billion yuan with a year-on-year increase of 15.65%; the total transaction volume was 1.28 billion units with a year-on-year increase of 6.8%. In February 2025, the cosmetics transaction amount on the five major e-commerce platforms(Tmall, Taobao, JD.com, Douyin, and PDD) was 46.19 billion yuan with a year-on-year increase of 21.38%; the transaction volume was 620 million units with a year-on-year increase of 21.75%. The data proved that the beauty industry grew rapidly at the beginning of 2025, which would help boost investor's confidence. Marubi's comprehensive year-on-year growth in February reached 176.17%. From January to February 2025, the transaction volume of eye care products was 32 million units with a year-on-year increase of 43.95%; the transaction amount was 3.41 billion yuan with a year-on-year increase of 56.68%. According to Qingyan Intelligence data, Marubi ranked first on the Douyin beauty eye care list in February this year. We are optimistic about Marubi's leading position as an eye care expert. The GMV of the Marubi brand under Marubi Biotechnology on the Douyin platform in January 2025 was 133 million yuan with a year-on-year increase of 62.53%, ranking 14th on the Douyin beauty list. Since September 2024, Marubi has maintained rapid growth, with monthly GMV exceeding 100 million yuan. In February this year, Passional Lover ranked second in the Kuaishou cosmetics category list with the GMV of 6.36 million yuan. During the International Women's Day promotion, Marubi ranked 7th on the Douyin Mall's Good Products Festival beauty list.
Deeply cultivating the application of recombinant protein technology, and the "double beauty" parallel strategy is expected to have good prospects in the future
As a leader in the research and development and application of recombinant collagen technology, the company continues to increase its R&D investment and deepens the application of innovative technologies of recombinant collagen. The company has launched two hot-selling products, the Peptide Little Red Pen Eye Cream and the Recombinant Collagen Little Golden Needle Essence. In 2023, Marubi's "Collagen Little Golden Needle" one-off essence reached annual sales of more than 1.07 million units, with an annual GMV of more than 200 million. On August 8, 2024, the "National Recombinant Functional Protein Technology Research Center" was officially completed at Marubi Biotechnology. The establishment of a national-level technology research platform marks the company's profound advancement in key technologies and industrial applications of functional proteins. At present, Marubi Biotechnology has completed the stable production and commercial application of recombinant collagen and recombinant elastin and is simultaneously promoting the research and development and application of recombinant fibronectin and periostin. The company has got 19 authorized patents in the field of recombinant collagen, which have been applied to the "Marubi Recombinant Collagen" products. Among them, the Little Golden Needle one-off Essence and Little Golden Needle Cream are popular with consumers. The development inspiration of the "Collagen Little Golden Needle" cream comes from the medical beauty concept of "contour fixation". Professor Xiong Sheng, chief scientist of Marubi recombinant collagen, said that in the future Marubi will also launch Class-III Medical Devices based on recombinant collagen, such as injectable hydrolaser needles and recombinant collagen for filling. At the same time, Marubi plans to officially enter the serious medical field after 2030 and launch products such as recombinant collagen artificial corneas and recombinant collagen 3D printed organs.
The company adheres to the dual beauty parallel strategy of "life beauty + medical beauty". The "Double Beauty Fusion Innovation Consortium" was established in Hengqin in February 2024. It aims to unite top domestic and foreign expert teams in synthetic biology, genetic engineering, bio-fermentation, innovative plant extraction, tissue engineering and biopharmaceuticals to create a double beauty ecological industrial chain and provide an innovative platform for the research, transformation and application of scientific and technological achievements in the field of "beauty and health" between Guangdong and Macao. Marubi Biotechnology's invested company Shanghai Moyang Biotechnology Co., Ltd has obtained the first-Class III certificate for hydroxy calcium phosphate microspheres in China. This is the first compliance certificate for hydroxycalcium phosphate microspheres suitable for facial soft tissue injection filling in China, showing that Marubi Biotechnology is actively deploying in the medical aesthetics field.
Fully involved in DeepSeek to help digitalize business development
In 2024, Marubi Biotechnology launched "Marubi Xiaoyan" to improve R&D efficiency and achieve more efficient and convenient information query and in-depth analysis. Recently, Marubi Xiaoyan has fully connected to the DeepSeek-V3 large model and successfully realized "smart upgrade", which will help improve the work efficiency of R&D personnel and thus assist the digitalization process of business development.
Investment Thesis
The Chinese cosmetics market has huge growth potential, and young people's recognition of domestic products is constantly increasing. The company has achieved remarkable results since it started online transformation in 2020. The proportion of the company's online revenue has increased year by year. In the future, the company is expected to gain a larger market share online. The company continues to launch new products, strengthens its product matrix, and actively implements the hot-selling products strategy. In 2025, Marubi officially announced Yang Zi as its first global brand spokesperson and promoted the hit product "Collagen Little Golden Needle" cream. Yang Zi was a child star with representative works such as "Home with Kids" and "Ashes of Love". She has more than 60 million fans on Weibo and has a strong celebrity appeal, which will help enhance Marubi's brand awareness and increase the company's sales revenue of hit products.
We forecast that the company's operating income will be RMB 2.90 billion, RMB 3.66 billion and RMB 4.44 billion in 2024-2026, with EPS of RMB 0.89/1.15/1.44, corresponding to a price-earnings ratio (P/E) of 41.7x/32.1x/25.7x. We give the company a P/E of 35 times in 2025, a target price of RMB 40.25, and give it a "accumulate" rating for the first time. (Current price as of Apr 3)
Risk factors
Downward macroeconomic situation, intensified industry competition, management changes, and new product promotion failing to meet expectations.
Financial
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