HSBC Research Lowers GIANT BIOGENE's Target Price to HKD46.4, Maintains Buy Rating

The analyst rating for GIANT BIOGENE (02367.HK) was downgraded from Buy to Neutral due to a public relations crisis that has shifted the investment logic from growth to strategic adjustment. The company is expected to enter an adjustment period in 2026 without any catalysts, and CMSI has revised its net profit forecast for GIANT BIOGENE to be 12% lower than market expectations, cutting the forecast by over 30% on average. Additionally, the target price was reduced from HKD 64 to HKD 34.5.

The analyst rating for GIANT BIOGENE (02367.HK) was adjusted to "Neutral" by UBS, with a target price slashed to $39.5, primarily due to a significant downward revision in the company's sales guidance and revenue forecasts. Morgan Stanley's report indicated that the company adjusted its 2025 sales growth expectation from 25% to flat or a mild decline, influenced by industry headwinds that hindered previously projected growth during key periods. Additionally, Morgan Stanley revised its revenue forecasts for 2025-27 down by 20%, 32%, and 35%, respectively, and anticipated a net profit drop of 8% year-over-year in 2025 and 2026, although a rebound of 20% was expected in 2027. The overall sentiment reflects concerns about the company's ability to achieve its growth targets amidst these challenges.

The analyst rating downgrade from Buy to Neutral for GIANT BIOGENE (02367.HK) by UBS is primarily due to increased uncertainty over the company's short-term revenue and profit outlook. UBS has also lowered its earnings forecasts for 2025-2027 by 25-41% and reduced revenue forecasts for the same period by 20-36%. Additionally, the report highlights intensified market competition from other skincare brands offering more attractive pricing and using similar core ingredients, which adds to the uncertainty regarding the success of GIANT BIOGENE's new products in the upcoming year.