Bloomage Biotech(SH:688363) Hua Xia Shi Bao·2025-11-07 05:39Core Viewpoint - Huaxi Biological is facing a trust crisis in the capital market due to continuous shareholding reduction by original shareholders and a significant drop in stock price, which has fallen over 80% from its peak. The company's core skincare business has seen a substantial decline in revenue over the past two years, leading to a notable decrease in both revenue and net profit for the first three quarters of 2025. The company is undergoing a "bone-scraping" reform to improve profitability through cost reduction and efficiency enhancement, while also seeking new growth through external investments. However, the lack of internal growth drivers and the underperformance of core business pose significant challenges for the company's recovery and investment transformation [2][3][4]. Financial Performance - As of November 6, 2025, Huaxi Biological's stock price was 49.8 yuan per share, representing an over 82% decline from its historical peak, with a market capitalization of only 24 billion yuan, down more than 120 billion yuan from its peak [4]. - For the first three quarters of 2025, the company reported revenue of 3.163 billion yuan, a year-on-year decrease of 18.36%, and a net profit attributable to shareholders of 252 million yuan, down 30.29% compared to the previous year [4][5]. - The core skincare innovation business has seen a continuous decline in revenue, with a drop of 8.5 billion yuan in 2023 and a further decline to 2.569 billion yuan in 2025, reflecting a year-on-year decrease of over 30% [5][6]. Business Challenges - The raw materials and medical terminal segments have also experienced declines, with the raw materials business showing a slight decrease of 0.58% in the first half of 2025, and the medical terminal business declining by 9.44% [6]. - The company's cost control measures have led to a reduction in sales expenses, which decreased by 5.14 billion yuan to 1.117 billion yuan in the first three quarters of 2025, resulting in a sales expense ratio of 34.26%, down 31.50% [9][10]. Strategic Initiatives - The company has initiated a brand "slimming" plan, shutting down non-core brands to focus on its main business. It has also made significant external investments, totaling 1.009 billion yuan across seven private equity funds, although these investments have not yet yielded substantial returns [10][11]. - Huaxi Biological has made strategic investments in biotechnology and pharmaceuticals, including a 138 million HKD investment in a Hong Kong-based company, aiming to enhance its platform value in the synthetic biology era [11]. Future Outlook - The company’s ability to recover its core skincare business and convert new investments into actual revenue will be critical for regaining trust in the capital market. The current profit improvements are seen as temporary measures, and without a return to double-digit revenue growth, the company may face further challenges in maintaining profitability [10][12].