"Yan value economy" is an area that has created entrepreneurial myths several times.

recently, the "2024 Hurun Global Rich List" was officially released. Among them, Yang Xia, chairman of Jinbo Biology (832982.BJ), ranked 2750 in the global rich list with a net worth of 8.5 billion yuan, ranking first among the rich living in Shanxi.

this enterprise named Jinbo biology mainly produces recombinant collagen. In recent years, after "hyaluronic acid", "recombinant collagen" has gradually become the new favorite of the medical and aesthetic industry, and Yang Xia's own value has naturally risen.

The Red Star Capital Bureau noted that there is still a dispute in the market about whether restructured collagen is an "IQ tax", and the business development of Jinbo Bio has also received more attention.

(I)

From Female Teacher to Richest Man in Shanxi

Yang Xia was born in Qinshui County, Jincheng, Shanxi in 1974. After graduating from graduate school, she chose to stay in Shanxi Medical University to teach, and her main research direction is liver transplantation technology.

After that, in the process of teaching and research, Yang Xia found that only one company in the United States had developed the technology of extracting human collagen from human placenta, which was very expensive.

As a result, Yang Xia came up with the idea of synthetic collagen. In 2008, Yang Xia registered Jinbo Biology and officially started the research on recombinant collagen.

After several years of development, Jinbo Biology also started a series of capital operations.

in 2015, jinbo biology was first listed on the new third board. By June 2020, Jinbo Bio submitted its prospectus on the CRE Board, but voluntarily withdrew its listing application six months later.

After the withdrawal of the application for listing on the board, it quickly "turned" to the North Stock Exchange in November 2021. After several twists and turns, it finally successfully landed in the capital market on July 20, 2023, becoming the "first share of collagen restructuring" on the North Stock Exchange ".

at the performance level, the financial report shows that from 2020 to 2023, Jinbo Biology will achieve revenue of 0.161 billion yuan, 0.233 billion yuan, 0.39 billion yuan and 0.78 billion yuan respectively, up 3.42, 44.75, 67.15 and 99.96 year-on-year. It can be seen that although the current revenue scale of Jinbo Biology is not too large, the performance growth rate is very rapid.

Source: Corporate Financial Report, Red Star Capital Bureau

net profit level, the financial report shows that the 2020-2023 Jinbo biological return net profit recorded 0.032 billion yuan, 0.057 billion yuan, 0.109 billion yuan, 0.3 billion yuan, year-on-year growth of -29.42 percent, 79.62 percent, 90.24 percent, 174.61 percent. The profitability of companies is also improving significantly, especially in 2023, when net profit growth far outpaced revenue growth.

Source: Corporate Financial Report, Red Star Capital Bureau

From the perspective of revenue structure, Jinbo Bio's current revenue sources include four major sectors, namely medical devices, functional skin care products, raw materials and other businesses.

Among them, medical devices are the main source of revenue for the company. The financial report shows that the medical device business will achieve revenue of 0.68 billion billion yuan in 2023, an increase of 122.66 year-on-year, accounting for 87.18 of the total revenue.

In the medical device business, the revenue of single-material medical devices based on the Weijianmei brand reached 0.565 billion yuan, accounting for more than 72% of the total revenue, and the year-on-year growth rate was as high as 254.65.

Source: Corporate Earnings

However, in the functional skin care business, Jinbo Bio has developed relatively slowly in this field. The financial report shows that in 2023, Jinbo's revenue from bio-functional skin care products was 0.076 billion yuan, a year-on-year increase of 12%, and the growth rate was the slowest among the three major business sectors.

In general, Jinbo's biological business has developed rapidly in recent years, but it mainly relies on single-material medical devices based on the Weijianmei brand, and its revenue structure is relatively single.

(II)

Product gross margin comparable to Maotai

From the perspective of profitability, the medical and beauty industry has always been profiteering, and the gross margin of Jinbo Bio is comparable to Maotai.

financial report shows that the gross profit margin of jinbo biology from 2021 to 2023 is 82.29, 85.44 and 90.16 respectively. Gross profit margin continued to increase, and gross profit margin has exceeded 90% in 2023. Among them, the gross profit margin of the single-material medical device business with Weiyi as the core is as high as 95.56.

At the same time, the financial report shows that the overall gross profit margin of Guizhou Maotai (600519.SH) in 2023 is 91.96. In other words, the gross margin of Jinbo Bio has approached Maotai.

However, although the gross profit margin is high, the sales expenses of Jinbo Bio have also increased significantly in recent years.

financial report shows that from 2021 to 2023, Jinbo biological sales expenses of 0.056 billion yuan, 0.105 billion yuan and 0.165 billion yuan increased by 49.11, 87.52 and 57.17 percent over the same period of last year, and the sales expense rate exceeded 20%.

Jinbo Biology said that this was mainly due to the continuous growth of the company's sales scale. On the one hand, the company expanded its sales team and the increase in sales staff salaries and expenses; on the other hand, Jinbo Biology increased its brand promotion efforts and increased promotion expenses.

In terms of R & D investment, the financial report shows that the R & D cost of Jinbo Biology in 2023 was 84.977 million yuan, a year-on-year increase of 87.12 percent, accounting for 10.89 percent of total revenue.

At the same time, however, the company's R & D expense rate is declining year by year. According to the financial report, Jinbo Bio's research and development cost rate is 14.74 percent, 12.45 percent and 11.64 percent, respectively, from 2020 to 2022.

It is worth mentioning that Jinbo Bio is currently the only company that has injection-grade recombinant type III humanized collagen biomedical materials. Whether the decline in the R & D cost rate will lead to a slowdown in product innovation, technological update and quality improvement, thereby affecting the scarcity of its products and the core competitiveness of enterprises, may also be a concern for the market.

(III)

Collagen cannot escape the "IQ tax" controversy

the medical and beauty track has never lacked new stories. for example, the hyaluronic acid fire in the early years made enterprises such as huaxi biology (688363.SH) and amike (300896.SZ) make a lot of money.

In recent years, recombinant collagen has also become the new favorite of this industry, and the scale of China's collagen market has shown a gradual growth trend.

according to Jost Sullivan data, from 2017 to 2022, the overall market size of collagen in China increased from 9.7 billion yuan to 39.7 billion yuan, with CAGR (compound annual growth rate) as high as 33%. It is estimated that by 2027, the market size of collagen in China will reach 173.8 billion billion yuan.

The market size of China's recombinant collagen products increased from 1.5 billion yuan in 2017 to 10.8 billion yuan in 2021, with a CAGR of 63%, and is expected to further increase to 108.3 billion yuan in 2027, accounting for 62.3 of China's collagen market.

But the market has always been controversial about whether collagen supplementation is effective. Some people think it is an "IQ tax", while others think it does have an effect.

In 2023, Jinbo Bio will launch a new skin care brand ProtYouth. According to the company's introduction, ProtYouth product uses A- type recombinant humanized collagen as a single component, and supplements collagen through external application. It has the functions of moisturizing, repairing, soothing, and oil control.

however, on the e-commerce platform, many consumers who have used ProtYouth collagen secondary stock solution have received feedback, and the product effect is not obvious, such as "no obvious feeling" and "an expensive IQ tax.

Source: Taobao

in addition, at the performance conference on April 3, 2023, Zhao Yan, chairman of Huaxi biology, once "bombarded" collagen, saying that the use of collagen in skin care products was only a concept, because it could not be absorbed. At the same time, she said, "If we have normal skin, collagen can't work, especially the capital market thinks that collagen will be replaced in the future. I don't think it is possible."

However, Huaxi Biology has not been able to escape the "Law of True Fragrance" and has already laid out the collagen field. At the same time, the annual report shows that Huaxi Bio last year around the recombinant collagen raw material development of end products, in January 2024 to obtain a class II medical device registration certificate (recombinant collagen wound dressing), independent research and development of collagen three types of medical device end products will soon enter the clinical stage.

jinbo biology once mentioned in the prospectus that if downstream medical beauty institutions or their partners exaggerate and publicize the product effect in order to obtain profits and over-market customers, it may lead to a large gap between the effect obtained by some customers after receiving medical beauty treatment and the expected effect, resulting in consumers' dissatisfaction with the medical beauty institutions and product effect and the risk of adversely affecting the company's product reputation.

In general, it will take time to verify whether collagen can be truly recognized by the market and consumers. However, the capital that is used to rushing ahead has turned Yang Xia's story of making wealth into reality through collagen.

Red Star News reporter Liu Mi

Edit Yang Cheng

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