Core Viewpoint - Lehua Entertainment has quietly exited its partnership with Huaxi Biological, with the latter announcing the withdrawal of Tianjin Yihua Management Consulting Co., Ltd. from the shareholder list of the children's skincare brand Runxihe, effective July 10, 2025. The collaboration was initially based on the founders' insights into their daughters' skincare needs, but the operational model did not meet expectations, prompting the decision to part ways [1][13]. Company Summary - Huaxi Biological's announcement highlighted that the original intention behind the Runxihe brand was to leverage the strengths of both companies in skincare active ingredients and cultural entertainment to create a children's skincare brand. However, the operational model failed to reflect the founders' original vision, leading to the decision to adjust the partnership [1][13]. - Lehua Entertainment confirmed its focus on core business development and IP expansion following the amicable agreement with Huaxi Biological. The company previously held a 50% stake in Runxihe [4][13]. - The Runxihe brand, launched in 2019, was part of a joint venture established in 2023, coinciding with Lehua Entertainment's IPO in Hong Kong. The brand aimed to tap into the beauty market, which was seen as a potential growth area for Lehua [16][17]. Industry Summary - The children's skincare segment has emerged as a lucrative area for domestic beauty brands, with several companies entering the market, including Betaini with "Winona Baby" and Shanghai Jahwa with "Qichu." The market has seen rapid growth, with brands like "Turtle Dad" and "Kangaroo Mom" gaining significant traction [18]. - Despite the initial promise, Runxihe's performance has not met expectations, as indicated by Huaxi Biological's recent quarterly reports, which did not mention the brand's performance or product lines. The company has been undergoing significant organizational changes since late 2022, which may have influenced the decision to exit the partnership [17][18].

Group 1 - The core point of the news is the strategic shift in the partnership between Huaxi Biological and Lehua Entertainment, with Lehua exiting the shareholder list of Beijing Runxihe Biotechnology Co., Ltd. and Huaxi increasing its stake to 100% [1][2] - Huaxi Biological and Lehua Entertainment have decided to adjust their existing cooperation model after reviewing past collaborations, believing that the previous model did not fully leverage the strengths of both leading companies in their respective industries [1][2] - The initial intention behind the establishment of the Runxihe brand was to address skincare needs for children, combining Huaxi's expertise in active skincare ingredients and Lehua's strengths in cultural entertainment [1][2] Group 2 - Huaxi Biological's subsidiary, Beijing Huaxi Haiyu Technology Co., Ltd., has completed the share transfer process with Tianjin Yihua Management Consulting Co., Ltd., which exited the Runxihe shareholder list on July 10, 2025 [2] - Runxihe is the only children's skincare brand under Huaxi Biological, which has established a significant market presence in skincare products, particularly leveraging its expertise in hyaluronic acid technology [2] - Lehua Entertainment, known for its talent management, has unique resources and advantages in brand marketing and communication, which were expected to complement Huaxi's strengths in the children's skincare market [2]