Core Viewpoint - Huaxi Biological, once a giant in the hyaluronic acid market, is facing significant challenges as its stock price has plummeted over 80% since 2021, leading to a market capitalization drop from over 140 billion to around 20 billion [3][15]. Group 1: Company Performance - Huaxi Biological's revenue for 2024 is projected at 5.371 billion, a year-on-year decrease of 11.6%, with a net profit of 164 million, down 72.27% [15]. - The decline in performance is primarily attributed to the rapid downturn in its functional skincare segment, which generated 2.569 billion, accounting for 47.92% of total revenue [17]. - This segment has seen consecutive declines, with an 18.45% drop in 2023 and a further 31.62% decrease in 2024 [18]. Group 2: Market Dynamics - The hyaluronic acid industry is experiencing overall growth pressure, with a general decline in the consumption medical sector, affecting major players like Haohai Biological [28][29]. - The market is characterized by intense price competition, with over 77 brands in the domestic hyaluronic acid market, leading to a lack of differentiation and pricing power [32][30]. - Despite the challenges, both Huaxi Biological and Haohai Biological maintain a gross margin above 70%, indicating that hyaluronic acid remains a profitable business [35]. Group 3: Competitive Landscape - The rise of recombinant collagen as a competing product has gained traction, with a projected market share surpassing hyaluronic acid by 2026, driven by a compound annual growth rate of 52.6% [39]. - The competition in the collagen sector is intensifying, with many companies entering the market, which may lead to a similar competitive environment as seen in the hyaluronic acid market [41][43]. - Huaxi Biological's struggles highlight the need for companies to innovate and establish strong brand identities to avoid falling into price wars and market saturation [48].