The rise of the party members! Recombinant Collagen Ranks into Anti-aging Top Flow?

Author/Braised under the Stars

EDIT/SPINACH STARIES

typography/sandwich under the stars

if we talk about the anti-aging elements in skin care products, "a alcohol, peptide and boson factor" can be said to be unforgiving. These three components have different emphases, and they are all hard-core anti-aging components that are highly respected by the party members. However, there is a component with anti-aging and repair double effect, now more and more beauty people pay attention to, faintly has become a skin care rookie, this is recombinant collagen .

the capital market has also welcomed relevant manufacturers one after another. after the industry leader giant biology (02367) landed in hong kong stocks at the end of 2022, the first-line manufacturer jinbo biology (823982) also started the application process of the north stock exchange on July 10. The issue price of 49 yuan/share, the issue price-earnings ratio of 32.44 times, the proper North Stock Exchange history of the most expensive new shares.

Jinbo Bio Listing Announcement Source: Company Announcement

What is recombinant collagen and how broad is the market?

1. new beauty new pet

Collagen is a word that is relatively familiar. It is a spiral fibrous protein composed of three peptide chains, which is widely distributed in the connective tissues of the human body, such as skin, bone and cartilage, tendons, ligaments, etc. It is also the most abundant protein in the human body, accounting for 30% of the total protein in the human body.

In fact, everyone has heard about the relationship between

collagen and beauty. the story of "metaphysics" that eating pig's trotters can supplement collagen to beauty has been circulated for many years. Although pig's trotter beauty is not very reliable, collagen does have a lot to do with the state of skin . Because the main component of the skin is collagen, the collagen content of our skin is lost every year after the age of 20. Moreover, in the dermis, collagen, as the main component of the extracellular matrix, will undergo significant functional and even structural changes over time. Therefore, there is still a clear correspondence between collagen supplementation and maintaining skin condition.

In addition to beauty, collagen has the characteristics of high tensile strength, low antigen activity, low cytotoxicity and promoting cell growth. It also has application potential in the field of serious medicine and can play a good role in the frontier fields of artificial organ regenerative medicine.

From the source, collagen is divided into animal-derived collagen and recombinant collagen. As the name implies, animal-derived collagen is extracted from animal tissues such as cowhide and pigskin. The recombinant collagen is the application of genetic engineering technology, through the microbial fermentation prepared. Compared with the former, recombinant collagen breaks through the limitation of raw materials, is safer, and is more suitable for further processing into medical raw materials. But also more complex and more expensive than animal-derived collagen preparation.

Group Collagen Contrast Animal-derived Collagen Source: Giant Bio-Prospectus, Frost & Sullivan, Chuanger Bio-Prospectus, Wanlian Securities Research Institute

In China, animal-derived collagen still accounts for the majority of the market. According to Frost & Sullivan, the market size of animal-derived collagen and recombinant collagen in 2021 is 17.9 billion yuan and 10.8 billion yuan respectively, so the penetration rate of recombinant collagen is only 37.7 percent. However, the latter is growing at a much higher rate than the former, with CAGR of 21.8 per cent and 63.0 per cent in 2017-2021, respectively. According to this trend, it is expected that in 2027, recombinant collagen will greatly surpass animal-derived collagen and become the main product with a penetration rate of 62.3 .

Growth rate of animal-derived collagen and recombinant collagen in China Source: Frost & Sullivan, Oriental Securities Research Institute

It is time to 2. the domestic industry

From the perspective of the domestic industry, recombinant collagen is currently mainly used in the field of beauty care. Yan-value economy has been in the limelight in recent years. the medical beauty three swordsmen huaxi biology (688363), aimeike (300896) and haohai shengke (688366), which are mainly engaged in hyaluronic acid (hyaluronic acid), have far outgrown most of the companies in the plate in terms of market value and performance.

The main applications, principles and categories of collagen in the field of beauty care Source: Chuang'er Bio-prospectus, FDA website, China Post Securities Research Institute

In fact, the performance of collagen manufacturers is also comparable .

giant biology, as the first enterprise in the world to realize mass production and reorganization of collagen skin care products, will reach 35.20 and 21.97 respectively in the company's revenue (2.364 billion yuan) and net profit (1.002 billion yuan) CAGR from 2019 to 2022. In 2022, Jinbo Bio also achieved a 67% increase in revenue (0.39 billion yuan) and a large increase in net profit attributable to its parent 90% to achieve a brilliant performance of breaking 100 million.

Giant Bio's revenue has grown rapidly since 2019, with slight fluctuations on the profit side Source: Open Source Securities Research Institute

the fact that these companies can eat well is related to the fact that the industry is developing rapidly and the competition for recombinant collagen products is relatively mild .

in China's professional skin care market, functional skin care, the sub-sector, has the fastest growth rate of recombinant collagen products, with a CAGR of 67.5 in 2017-2021, and is expected to maintain a level of 44.3 in 2022-2027. And the brand concentration in this field is relatively high, the industry CR5 can reach 67.5 , of which Beitani (300957) and Giant Bio, the two strong market share of 21.0 and 11.9 respectively. Although the CR5 market for medical dressings is only 26.5 percent, it is also clearly mixed with fish and dragons, and there are significant differences in the market for skin care products with other ingredients in the scuffle.

it is the brand and channel that are quickly eliminated. the market pioneers who have occupied the pole position undoubtedly have great advantages.

the pain point of 3. products has not been solved yet, and the troublemaker has come

In addition to functional skin care products and medical dressings, injection medicine is also a long-coveted field of recombinant collagen. In fact, from the principle point of view, collagen and hyaluronic acid (hyaluronic acid) compared to a certain advantage. In terms of nature, it has more functions in promoting cell adhesion, stimulating cell regeneration and repairing damaged skin barrier. It seems that it should be able to show better anti-aging and repair performance.

Collagen Contrast Hyaluronic Acid Source: Giant Bio-Prospectus, Frost & Sullivan, Huaxi Bio-Annual Report, Wanlian Securities Research Institute

however, the market acceptance of injectable collagen products is still not high at present. judging from the market size in 2021, hyaluronic acid (hyaluronic acid), botulinum toxin and collagen account for 51.2, 32.8 and 8.7 respectively in injectable medical and aesthetic items, with recombinant collagen products accounting for only 0.9 . Collagen-related products are also relatively few. At present, there are only 5 compliant injectable collagen products on the market, mainly animal-derived collagen, and only a recombinant collagen product such as Wei Yimei under Jinbo Biology.

This is related to the fact that there are still many problems in the collagen preparation process that have not been solved. At present, animal-derived collagen products have certain safety hidden dangers , and the scope of application is slightly narrower. However, the triple helix structure of recombinant collagen is not stable enough, and the direct result of weak supporting ability is short duration. For example, the duration of Wei-yi-mei effect is only about 1-3 months. Jinbo Biological Annual Report shows that this product will achieve 0.2 sales revenue in 2021 and 2022 respectively.0.8 billion yuan and 0.117 billion yuan still account for a relatively limited proportion of revenue.

it seems that in order to realize the continuous encroachment of recombinant collagen on the cake of injection medicine and beauty, paying attention to research and development is definitely the key to breaking the situation. Whoever can solve the pain point of the product will touch the life gate of the recombinant collagen industry.

in addition to the major technical problems that still need to be solved, the off-site giants have also been eyeing the blue ocean of reorganizing collagen from covetous to in person . Huaxi Bio, one of the three swordsmen of medical beauty, acquired a 51% stake in Beijing Yierkang Bio, which specializes in collagen sponges and artificial bones, in 2022, while Aimeike also made a large proportion of investment in Harbin Peiqilong, a series of collagen products.

Overall, the existing competitive landscape of the restructured collagen market is relatively friendly, and first-line manufacturers have established a more obvious first-mover advantage. From the point of view of the application direction of injection medicine and beauty, it also appears to be full of potential. However, we should also realize that in order to turn potential into performance, we still need to overcome many difficulties such as product stability , preparation cost and safety, and larger players are also starting to roll up their sleeves to stir up trouble.

Recombinant collagen tomorrow may be far from the "good situation" as imagined ".

Note: This article does not constitute any investment advice. The stock market is risky and you need to be cautious when entering the market. No sale, no harm.