Group 1 - The 2025 Golden Bull Enterprise Sustainable Development Forum and the third National New Cup ESG Golden Bull Award ceremony were held in Suzhou, Jiangsu, focusing on the theme "Governance for a Sustainable Future" [1] - The ESG Golden Bull Award, organized by China Securities Journal, evaluates corporate ESG performance and aims to recognize leaders in ESG practices within the capital market [1][2] - This year's awards included seven categories: "Top 100 ESG Golden Bull Awards," "Outstanding Central Enterprise ESG Golden Bull Award," "Carbon Neutrality ESG Golden Bull Award," "Technology Leadership ESG Golden Bull Award," "Governance ESG Golden Bull Award," "Rural Revitalization ESG Golden Bull Award," and "Emerging ESG Golden Bull Award" [1] Group 2 - The evaluation committee utilized the China National New ESG evaluation methodology and research outcomes from the State-owned Assets Supervision and Administration Commission, assessing corporate ESG performance based on financial significance and impact importance [2] - The assessment process involved a systematic evaluation of ESG risk events, public sentiment, and the quality of ESG disclosures, adhering to principles of classification, diversity, and avoidance of duplication [2]

Core Viewpoint - The stock price of Hyaluronic Acid leader, Huaxi Biological (688363.SH), has fallen below its issue price, raising concerns among investors about the company's measures to reverse this trend [1][2]. Group 1: Stock Performance and Market Reaction - On December 4, Huaxi Biological's stock price dropped to 45.25 yuan per share (post-adjusted to 47.62 yuan), below the issue price of 47.79 yuan, indicating a significant market reaction [1]. - The company has seen its market capitalization shrink from over 140 billion yuan at its peak to approximately 22 billion yuan, with a cumulative stock price decline of 10.53% this year [3]. - The stock has reached a historical low of 42.42 yuan per share during the year, reflecting ongoing investor concerns [3]. Group 2: Financial Performance - For the first three quarters of 2025, Huaxi Biological reported revenue of 3.163 billion yuan, a year-on-year decrease of 18.36%, and a net profit of 252 million yuan, down 30.29% [2]. - Despite a 55.63% increase in net profit in the third quarter compared to the previous year, the revenue of 900 million yuan still represented a 15.16% decline, indicating a situation of "profit increase without revenue increase" [2]. Group 3: Shareholder Actions and Market Sentiment - The second-largest shareholder, Guoshou Chengda, plans to reduce its holdings by up to 9.6336 million shares, approximately 2% of the total share capital, further intensifying market concerns [3]. - Institutional investors, including several fund companies, have also been reducing their stakes in Huaxi Biological, indicating a broader withdrawal of capital from the company [3]. Group 4: Industry Challenges and Strategic Responses - Huaxi Biological has been removed from two major indices, including the STAR 50 Index and the FTSE China A400 Index, which may impact its visibility and investor sentiment [4]. - The company faces increased competition, particularly from collagen-based products, which are projected to surpass hyaluronic acid in market share by 2026, with a compound annual growth rate of 52.6% [4]. - In response to these challenges, Huaxi Biological is undergoing organizational restructuring and investing in new biotechnologies, such as PDRN and ergothioneine, to enhance its product offerings and performance [4].

Core Viewpoint - Huaxi Biological has made significant improvements in operational quality and profitability since the return of its chairman and general manager in March 2025, despite a decline in revenue [1][2]. Group 1: Financial Performance - In Q3 2025, the net profit attributable to shareholders reached 0.32 billion yuan, a year-on-year increase of 55.63% [1]. - The operating revenue was 9.03 billion yuan, showing a year-on-year decline of 15.16% [1]. - The net cash flow from operating activities increased by 8.59 times year-on-year, indicating continuous improvement in core indicators [1]. Group 2: Strategic Focus - The company is focusing on a comprehensive business layout in the field of aging intervention, integrating solutions across pharmaceuticals, medical aesthetics, nutritional science, and skin science [2]. - Huaxi Biological aims to upgrade from "Chinese manufacturing" to "Chinese cutting-edge R&D + Chinese brands" by expanding its industrial ecosystem around core life science materials [2]. - The growth points for the company are derived from its integration capabilities in three areas: stability and regeneration of extracellular matrix (ECM), maintenance of cellular energy and function, and precise regulation of intercellular information transmission [2].

Core Viewpoint - The WISE 2025 Business King Conference aims to anchor the future of Chinese business amidst uncertainty, emphasizing the importance of collaboration and innovation in the face of technological advancements and market changes [1][2]. Group 1: Conference Overview - The WISE 2025 Business King Conference, held on November 27-28 in Beijing, is described as an immersive experience rather than a traditional industry summit, focusing on the intersection of technology and business [2]. - The conference features various themes, including AI's impact on hardware, global brand expansion, and the integration of traditional industries with advanced technologies [2]. Group 2: Speaker Insights - Zhao Yan, Chairman of Huaxi Group and Huaxi Bio, delivered a keynote speech titled "The Power of Symbiosis: Chinese Manufacturing and Life Regeneration," highlighting the significance of hyaluronic acid beyond its cosmetic applications [4][5]. - Hyaluronic acid is presented as a fundamental active substance in human life, essential for tissue repair and regeneration, and is crucial in various medical applications [5][6]. Group 3: Industry Positioning - Huaxi Bio holds over 70% market share in the global pharmaceutical raw material sector and more than 40% in the cosmetic-grade raw material sector, showcasing its leadership in the biomanufacturing industry [6]. - The company emphasizes the parallel between macro-manufacturing and micro-repair processes, illustrating how both realms share similar principles of connection and collaboration [7][8]. Group 4: Future Directions - The company aims to transition from "Chinese manufacturing" to "Chinese creation," focusing on biomanufacturing and the mastery of core technologies to enhance product quality and innovation [15][16]. - Huaxi Bio is investing in a biomanufacturing pilot platform in Tianjin, with a goal to increase the technology transfer rate from below 10% to 35%-50% over the next five years [17]. Group 5: Vision and Values - The company seeks to create a collaborative ecosystem in the biomanufacturing industry, promoting shared growth and innovation among enterprises and research institutions [16][18]. - The ultimate goal is to respect and enhance every life, ensuring that individuals can achieve quality longevity through health and vitality [21].

Group 1 - The core point of the article is that Huaxi Biological has been removed from the Sci-Tech Innovation 50 Index, indicating a significant shift in its market position and performance [1] - The Shanghai Stock Exchange and China Securities Index Co., Ltd. announced the periodic adjustment results for various indices, including the Sci-Tech Innovation 50 Index, which will take effect after the market closes on December 12, 2025 [1] - The adjustment of the Sci-Tech Innovation 50 Index includes the removal of Huaxi Biological and the addition of Aojie Technology and Shengke Communication [1] Group 2 - The announcement also details changes in other indices, with the Shanghai 50 Index replacing 4 stocks, the Shanghai 180 Index replacing 7 stocks, and the Shanghai 380 Index replacing 38 stocks [1] - The removal of Huaxi Biological from the index suggests that there are currently no skincare brands with a market capitalization of 10 billion yuan or more [1]

Core Viewpoint - Huaxi Bio's nutrition science segment has achieved a breakthrough, maintaining revenue growth while achieving quarterly profitability for the first time in Q3 [1] Short-term Outlook - Business recovery and expansion are expected in the short term, with skin science innovation and transformation business anticipated to continue adjustments, leading to gradual revenue recovery [1] - The raw materials business, leveraging commercialized synthetic biological new materials like PDRN and PQQ, is expected to achieve steady growth and become a significant growth engine for the company [1] Long-term Strategy - The company focuses on aging intervention, building an integrated solution covering raw materials, medical aesthetics, skincare, and nutrition, based on its leading synthetic biological manufacturing capabilities [1] - The business ecosystem is designed to enhance the company's cutting-edge R&D influence and drive brand value enhancement [1] Financial Projections - The expected EPS for the company from 2025 to 2027 is projected to be 0.81, 1.08, and 1.30 yuan respectively, maintaining a "buy" rating [1]

Group 1 - The Shanghai Stock Exchange and China Securities Index Co., Ltd. announced the periodic adjustment results for indices such as SSE 50, SSE 180, SSE 380, and Sci-Tech 50, effective after market close on December 12, 2025, with changes including 4 samples for SSE 50, 7 for SSE 180, 38 for SSE 380, and 2 for Sci-Tech 50 [1] - Huaxi Biological was removed from the Sci-Tech 50 index adjustment list [2] - The adjustment of Huaxi Biological has been anticipated, as the company reported a significant decline in its skin science innovation transformation business, with no brands achieving over 1 billion in revenue last year [3][4] Group 2 - In the 2024 annual report, Huaxi Biological renamed its "Personal Health Consumer Products Business Line" to "Skin Science Innovation Transformation Business Line," which generated revenue of 2.569 billion yuan, a year-on-year decrease of 31.62%, accounting for 47.92% of the company's main business revenue [4] - The revenue breakdown for Huaxi Biological's brands includes 923 million yuan for Runbaiyan, 649 million yuan for Kuaidi, 290 million yuan for Mibeier, and 279 million yuan for BM Jihuo, indicating the absence of any 1 billion-level skincare brands [4]

Core Viewpoint - The Shanghai Stock Exchange and China Securities Index Co., Ltd. announced adjustments to several indices, including the Shanghai 50 and the STAR 50, effective after market close on December 12, 2025, with notable changes in sample stocks [1]. Group 1: Index Adjustments - The Shanghai 50 Index will replace 4 sample stocks, the Shanghai 180 Index will replace 7 sample stocks, the Shanghai 380 Index will replace 38 sample stocks, and the STAR 50 Index will replace 2 sample stocks [1]. - Notably, Huaxi Biological has been removed from the STAR 50 Index sample list [2]. Group 2: Huaxi Biological's Business Challenges - Huaxi Biological's skin science innovation transformation business has encountered significant challenges, with no brands achieving over 1 billion in revenue last year [2]. - The company has indicated that 2024 will be a year of organizational transformation, with plans to continue these changes into 2025 [2]. - In the 2024 annual report, Huaxi Biological reported that its skin science innovation transformation business generated revenue of 2.569 billion yuan, a year-on-year decline of 31.62%, accounting for 47.92% of the company's main business revenue [3]. - Revenue from individual brands such as Runbaiyan, Kuadi, Mibeier, and BM Jihuo were reported at 923 million yuan, 649 million yuan, 290 million yuan, and 279 million yuan respectively, indicating the absence of any billion-level skincare brands [3].

Core Insights - The medical beauty sector experienced a decline of 0.65% on December 2, with Huaxi Biological leading the drop [1] - The Shanghai Composite Index closed at 3897.71, down 0.42%, while the Shenzhen Component Index closed at 13056.7, down 0.68% [1] Sector Performance - The closing prices and performance of key stocks in the medical beauty sector are as follows: - Jinbo Biological: Closed at 223.43, up 2.42% with a trading volume of 11,300 hands and a transaction amount of 253 million [1] - *ST Meigu: Closed at 4.17, up 0.97% with a trading volume of 91,900 hands and a transaction amount of 37.83 million [1] - Aimeike: Closed at 145.06, down 0.64% with a trading volume of 16,000 hands and a transaction amount of 233 million [1] - Huaxi Biological: Closed at 46.57, down 0.89% with a trading volume of 20,600 hands and a transaction amount of 96.12 million [1] Capital Flow - The medical beauty sector saw a net outflow of 1.145 million from main funds, while retail investors had a net inflow of 1.233 million [1] - Detailed capital flow for key stocks is as follows: - Jinbo Biological: Main funds net inflow of 25.696 million, retail net inflow of 636,300 [2] - Huaxi Biological: Main funds net inflow of 4.2399 million, retail net inflow of 939,100 [2] - *ST Meigu: Main funds net inflow of 857,200, retail net inflow of 2.3685 million [2] - Aimeike: Main funds net outflow of 6.2421 million, retail net inflow of 9.0204 million [2]

Quantitative Models and Construction Methods 1. Model Name: Liquidity Impact Coefficient Model - **Model Construction Idea**: This model measures the liquidity impact of index adjustments on individual stocks by calculating the ratio of net fund flows to the stock's recent average daily trading volume[12][13] - **Model Construction Process**: The liquidity impact coefficient for a stock is calculated as follows: $$ impact_{i} = \sum_{k=1}^{N} \frac{\Delta weight_{k,i} \times AUM_{k}}{amt\_avg_{i,20}} $$ - \( \Delta weight_{k,i} \): Estimated weight change of stock \( i \) in index \( k \) - \( AUM_{k} \): Total assets under management of passive products tracking index \( k \) as of the end of November - \( amt\_avg_{i,20} \): Average daily trading volume of stock \( i \) over the past 20 trading days as of the end of November[12][13] - **Model Evaluation**: The model provides a quantitative framework to estimate short-term liquidity shocks caused by index adjustments, but it is subject to data discrepancies and assumptions, which may lead to deviations from actual results[13] --- Model Backtesting Results Liquidity Impact Coefficient Model - **Top 5 Stocks with Highest Positive Impact Coefficients**: - Zhangjiagang Bank (002839 CH): 11.55[15] - Jiangzhong Pharmaceutical (600750 CH): 11.44[15] - Tower Group (002233 CH): 11.04[15] - Jichuan Pharmaceutical (600566 CH): 10.14[15] - Zhengbang Technology (002157 CH): 9.99[15] - **Top 5 Stocks with Highest Negative Impact Coefficients**: - Shenzhen Expressway (600548 CH): -24.95[16] - Vanward Electric (002543 CH): -20.90[16] - Aviation Materials (688563 CH): -14.06[16] - Huaxi Biology (688363 CH): -10.81[16] - Ninghu Expressway (600377 CH): -10.54[16] --- Quantitative Factors and Construction Methods 1. Factor Name: Net Fund Flow Factor - **Factor Construction Idea**: This factor estimates the net fund inflow or outflow for stocks due to index adjustments, based on changes in index weights and the total AUM of passive products tracking the index[9][10] - **Factor Construction Process**: - Outflow Amount: Total AUM of linked products multiplied by the stock's actual weight in the index as of the end of November - Inflow Amount: Total AUM of linked products multiplied by the estimated weight of the stock in the index post-adjustment - Weight estimation is based on free-float market capitalization and index-specific weighting rules, such as dividend yield weighting or market capitalization weighting[9][10] - **Factor Evaluation**: The factor provides a transparent and systematic approach to estimate fund flows, but it is sensitive to assumptions about future index weights and AUM changes[9][10] --- Factor Backtesting Results Net Fund Flow Factor - **Top 5 Stocks with Highest Net Fund Inflows**: - Victory Precision (300476 CH): 112.61 billion CNY[10] - Dongshan Precision (002384 CH): 99.32 billion CNY[10] - Guangqi Technology (002625 CH): 77.81 billion CNY[10] - Sugon Information (603019 CH): 65.44 billion CNY[10] - Top Group (601689 CH): 53.07 billion CNY[10] - **Top 5 Stocks with Highest Net Fund Outflows**: - China Mobile (600941 CH): -40.02 billion CNY[11] - CRRC Corporation (601766 CH): -36.40 billion CNY[11] - Aluminum Corporation of China (601600 CH): -34.29 billion CNY[11] - TCL Zhonghuan (002129 CH): -30.07 billion CNY[11] - Huagong Tech (000988 CH): -27.44 billion CNY[11]