This article is based on publicly available information and is for information purposes only and does not constitute any investment advice.
In 2012, Warren Buffett's old man, Berkshire Hathaway, completed a deal to acquire a Spanish company called Lipote C.
Lipotec was founded by two chemists – Dr. Jose Maria Garcia Anton, and Dr. Antonio Paste. They founded Lipotec in 1987.
For the vast majority of the public, Lipotec has never been a company in sight. But for the global cosmetics industry, its emergence has changed the fate of many people.
Lipotec's contribution is that it has developed an anti-wrinkle chemical raw material, hexapeptide (acetyl hexapeptide-8).
It can be said that hexapeptide and its successor lineages are the wealth code of many cosmetics industry tycoons. As far as local Chinese companies are concerned, it also supports half of the "A-share cosmetics brother".
Compared with several popular fried chickens in the A-share hyaluronic acid track in the past two years, Proya's popularity is not very high. But this does not prevent this local cosmetics first to make a fortune.
During the 2023 Double 11 period, Proya's sales surpassed L'Oreal, Estee Lauder and other first-tier international beauty brands, and won the first place in the beauty industry on Tmall and Douyin.
Among them, the backbone of Dingding's sales is its big products: ruby cream and double anti-serum essence.
The main effect of these two products is anti-aging. Anti-aging is also the core logic that supports 80% of Proya's business revenue: after 7 years of listing, the stock price has increased 10 times, and the word "anti-aging" has made great contributions.
In the valuation logic that is not simple to save money, Hexapeptide smiled and said nothing.
The above-mentioned ruby cream, which has the highest sales, has become the core ingredient of Hexapeptide. Since the release of the first version in 2020, it has been upgraded around this core raw material ingredient, allowing Proya to kill all sides inside and outside the capital market
2020 Ruby Series 10, the core ingredient is hexapeptide-8 (acetyl hexapeptide-8, hereinafter referred to as hexapeptide-8);
2022 Ruby Cream 20, the core ingredient is hexapeptide-1 (acetyl hexapeptide-1, hereinafter referred to as hexapeptide-1);
Ruby Cream 2023 30, the core components are cyclic peptide-161 and flaxseed cyclic peptide.
can make thousands of ladies and ladies flock to it, carrying a local cosmetics company that was considered to have a sense of copycat ten years ago, 10 times in 7 years, and the name of the first brother of "A-share cosmetics", these six peptides are indeed something.
We know that the main cause of facial wrinkles comes from muscle spasm, and the mechanism of muscle spasm lies in the warming effect of neurons, and some scholars believe that this is largely due to a large number of snare protein complexes (soluble N-ethylmaleimide-sensitive factor activating protein receptors).
Figure: Acetyl hexapeptide-8 attenuates muscle contraction by inhibiting the release of neurotransmitters, ** open network
In 2002, Lipotec, the founder of the double Ph.D. in chemistry, found a solution, and they synthesized a small molecule active peptide, acetyl hexapeptide-8, with reference to the structure of Snap-25 in the snare protein complex.
The anti-aging mechanism of hexapeptide is that it penetrates into the SNARE complex, inhibits the transport and release of acetylcholine by reducing SNARE protein synthesis, thereby weakening neurotransmission, and the raw material concentration ppm (1 part per million) can achieve the purpose of reducing ** shrinkage and resisting wrinkles.
Blanesmira, an industry organization, has published a study that said that after 30 days of using an emulsion containing 50mg kg of acetyl hexapeptide-8**, healthy female volunteers underwent morphological analysis and reduced wrinkle depth by an average of 30%.
Next, let's talk about the chemical mechanism of hexapeptide
Hexapeptide, like most peptides, uses solid-phase synthesis (invented by Robert Merifeld in 1963).
Peptides, like amino acids and proteins, are biomolecules. Amino acids are the basic units that make up peptides and proteins, and multiple amino acids are connected by peptide chains to form peptides, and finally multiple peptides form proteins.
Figure: Amino acids, peptides, protein relationships, **open network
The nomenclature of peptides is that a few amino acids are called peptides, and the six peptides mentioned above contain six amino acids. Peptides can be divided into oligopeptides (2-10) and polypeptides (11-50) by the number of amino acids, among which oligopeptides are easy to absorb because of their small molecular weight and have low irritation as one of the protein synthesizers, becoming one of the three musketeers of anti-aging (alcohol, bosonine, peptides).
Through the search for keyword peptides through Meixiu big data, there are more than 3 products introducedMore than 60,000 results.
It is worth noting that the peptide family is extremely large, and the mechanism of action of different peptides is very different, and it can be divided into three types according to their function in skin care products
Signal peptides: Activate specific signal transduction pathways in target cells to promote collagen synthesis, focusing on anti-aging, whitening, tanning, etc.
Carrier peptides: act as transporters, responsible for transporting metal ions that are beneficial for antioxidant and anti-aging, such as manganese and copper. It can promote the synthesis of collagen and elastin collagen, focusing on repair and anti-aging.
Neurotransmitter inhibitory peptides: inhibiting specific signaling pathways to reduce nerve signaling and avoid excessive contraction of mental muscles, so as to achieve the purpose of preventing dynamic expression lines, popular categories on the market include snake-like peptides, conotoxin, red scorpion toxin, acetyl hexapeptide-8, etc., and the hexapeptide applied by Proya also belongs to this category.
At present, from the perspective of peptide raw material supply, European and American companies are still the most active regions in research and development, and they are also the main promoters of raw material technology progress. According to the data of the Peptide Research Society, Europe is the largest production region of beauty peptides, accounting for about 35%, followed by North America and China, accounting for 32% and 18% respectively.
Returning to the camp of China's local raw material suppliers, there are currently many acetyl hexapeptide-8 suppliers, mainly including Zhejiang Paipeptide Biotechnology, Huatuo Biotechnology, Hubei Bojie Biotechnology, Hangzhou Gutuo Biotechnology, etc. In particular, the purity of domestic acetyl hexapeptide-8 has reached 998%, its competitive advantages in terms of cost, purity, and scale are becoming more and more obvious - which also lays the groundwork for the continuous rise of local cosmetics brands in the next few years.
In 2012, after Lipotec was acquired by Berkshire Hathaway, founder Dr. Josemariagarcia Anton started a new company: Lipoturesl, and in 2019, an upgraded version of Hexapeptide-1 was launched.
That is, from this year onwards, Proya and lipoturesl Establish a cooperative relationship, and the market value has taken off all the way.
From the ingredient list of Proya Ruby products, it can be clearly seen that so far, through the modification and optimization of the structure of the hexapeptide, the product has undergone two technical iterations:
The first : Proya and Lipoturesl Since 2019, the partnership has been formed, and in 2020, Proya Ruby Essence uses Hexapeptide-8;
Upgrade: 2019 lipoturesl Launched Hexapeptide-1, which is more active and effective, corresponding to Ruby Cream 2 20220 upgraded to hexapeptide-1, Proya and lipoturesl It has also evolved from simple technical cooperation to investment and shareholding;
Evolution : Ruby Cream 2023 3The cyclic peptide of 0 is a hexapeptide connected from end to end to form a ring, which is upgraded again in stability and permeability.
After two upgrades, the ruby cream** has changed from 259 yuan 50g** to 359 yuan 50g, but compared with the 980 yuan 50ml of Estee Lauder thread carving essence, it is also a parity line - I have to say that women's money is still easy to make.
But in the final analysis, Proya can add hexapeptide to affordable skin care products, in addition to the close relationship with the raw material supplier, the more important reason is that a mature industrial chain has been formed on the raw material supply side
After 20 years of evolution, the application of hexapeptide in cosmetics has been relatively common, and the popularity of the first-upgrade-evolved version of hexapeptide has shown a pyramid shape.
According to the big data of the United States——
1) The first generation has the highest popularity: the number of products containing hexapeptide-8 registered in the Chinese cosmetics market is about 140,000 pieces, As of the end of 2022, Hexapeptide-8 ranked second on the list of anti-aging ingredients recorded, and the brands currently applied include La Mer, Youshiyan, Hanhou, etc.;
2) The second generation is the second most popular: about 7,000 products containing hexapeptide-1 have been registered, and the brands currently used include Dr. Maier, Quadi, Proya, etc.
3) The application of cyclic peptide is narrow: there are 3 registered products containing cyclic peptide-161, and the only brand currently registered for use is Proya, so this is Ruby Cream 30 core selling point.
Figure: Filing of anti-aging products in 2022, **Meixiu big data
In fact, Merck and Lipotec applied for cyclic peptides abroad a few years ago, but they were shelved on the application side because the Chinese cosmetics filing catalogue did not cover it, and the approval process for new raw materials was too complicated.
In other words, Proya's cyclic peptide-161 is equivalent to outperforming its colleagues in the Chinese market, and it does have a first-mover advantage in higher-level technology.
However, it must be pointed out that the essence of cosmetic raw materials is fine chemicals, and there has always been no monopoly barrier. Therefore, it is only a matter of time before cyclic peptides can become the next universal and mainstream anti-aging active ingredient in the future. Once the supply side is large, the first war is inevitable.
In other words, the challenges faced by Proya to keep its position as the "first brother of A-share cosmetics" are also extremely realistic. Whether its market value ceiling can continue to rise in the future still depends to a large extent on whether it can continue to maintain technological leadership on the raw material component side.
It's for the epilogue, to say something extraordinary.
This article is the latest in our series of cosmetic studies, and we have chosen an unpopular angle: raw materials. This is not a particularly mainstream perspective on company tracking within the investor community.
But the reason for choosing to do this is that the essence is from the first nature of the industry: the essence of cosmetics is fine chemicals. How to achieve more optimization of cleaning, protection, anti-aging, and beauty modification on the basis of fine chemicals, that is, core raw materials, is the first business model of all cosmetics companies.
But there's not much new under the sun. Whether it is oils, peptides, hydrocarbons, powders, active agents or other compounds, once they are supplied on a large scale, N brands will appear on the market the next day. This is also an important reason why everyone in the cosmetics industry attaches great importance to brand, packaging, story marketing, and shopping guide (KOL) - it is extremely difficult to establish a differentiated moat.
This means that without a keen understanding of raw materials and technical processes, investing in the cosmetics track in the secondary market is tantamount to a blind man touching an elephant, and it is easy to fall into the trap of linear deduction.
Therefore, for the tracking of raw materials and technical processes, the essence should become the main focus of our coverage of the large consumption track in the new era - otherwise, we really can't imagine how much Buffett understands cosmetics.