Citi has issued a research report raising the target price for GIANT BIOGENE (02367) from HK$37 to HK$38.4, while maintaining a "Buy" rating. The company's first-half net profit reached RMB 940 million, marking a 21% year-on-year decline but exceeding the bank's estimates by 4%. This outperformance was primarily driven by a lower effective tax rate and higher interest income, which were partially offset by increased selling and distribution expenses. Revenue fell 6% during the period, aligning with market expectations.

The report highlights that GIANT BIOGENE's management has maintained its full-year guidance, projecting 10% revenue growth and flat net profit. This outlook implies that the second half of 2026 would need to see revenue growth exceeding 30% and net profit growth surpassing 40%. Management has expressed strong confidence in achieving these ambitious targets.

Citi views GIANT BIOGENE as its top pick in China's cosmetics sector, citing the company's high visibility for recovery. The firm's positive stance reflects confidence in the company's ability to navigate market challenges and deliver on its growth trajectory.