Bloomage Biotech(SH:688363) Tai Mei Ti A P P·2025-04-28 04:40Core Viewpoint - Huaxi Biological, once a giant in the hyaluronic acid sector, is currently facing significant challenges, including a sharp decline in revenue and profit as reflected in its Q1 2025 financial report [2][3]. Financial Performance - In Q1 2025, Huaxi Biological reported revenue of 1.078 billion yuan, a year-on-year decrease of 20.77%, and a net profit attributable to shareholders of 102 million yuan, down 58.13% year-on-year [2]. - The company's revenue decline in Q1 2025 marks the worst quarterly performance in its history, despite it being the best profit level in the last four quarters [2]. Business Segment Analysis - The skin science innovation transformation business, previously the company's cash cow, has entered a phase of negative growth, significantly impacting overall performance [2][4]. - From 2018 to 2022, the functional skincare segment experienced rapid growth, peaking at 4.607 billion yuan in 2022, contributing over 70% to total revenue [4][5]. - However, this segment's revenue is projected to decline to 3.757 billion yuan in 2023 and 2.569 billion yuan in 2024, with year-on-year decreases of 18.45% and 31.62%, respectively [5]. Management Changes - The chairman and general manager, Zhao Yan, has taken direct control of the skin science innovation transformation business to address the ongoing challenges [4]. - The company has experienced significant personnel turnover, with 34 senior executives and key technical personnel leaving in 2024, contributing to increased management costs [5]. Strategic Adjustments - Huaxi Biological is emphasizing high-end product development to improve profit margins, as the gross margin of its functional skincare segment has been declining [6]. - The company has halted ineffective promotional activities and is focusing on building a brand content system based on technological strength and AI [6]. Future Directions - The company is shifting its focus towards sugar biology and cell biology, aiming to enhance its R&D capabilities and develop new raw materials [9]. - Huaxi Biological's innovative raw material business has expanded into various fields, including reproductive health and pet food, with revenue from the raw material segment growing by 15.22% and 9.47% in 2023 and 2024, respectively [10][11]. - The medical terminal product segment has also seen growth, with revenue reaching 1.44 billion yuan in 2024, a year-on-year increase of 32.03% [10].