Core Viewpoint - Huaxi Bio's performance in the first half of 2025 showed significant declines in revenue and profit, but there are signs of recovery in the second quarter, indicating potential for future growth [1][4][14]. Financial Performance Summary - In the first half of 2025, Huaxi Bio reported revenue of 2.26 billion yuan, a year-on-year decrease of 19.57% [1][3]. - The net profit attributable to shareholders was 221 million yuan, down 35.38% year-on-year, while the net profit after deducting non-recurring gains and losses fell by 45% to 218 million yuan [1][3]. - Operating cash flow was 218 million yuan, a decline of 17.49% compared to the previous year [1][3]. - In the second quarter, revenue was 1.18 billion yuan, a decrease of 18.44% year-on-year, but net profit increased by 20.89% to 119 million yuan, marking a return to growth [4][14]. Operational Changes and Strategies - Founder Zhao Yan returned to the frontline in March 2025, implementing significant reforms including management restructuring and cost-cutting measures [4][8]. - Sales expenses decreased by 31.44% to 808 million yuan in the first half of 2025, with a sales expense ratio of 35.74%, the lowest in five years [10][12]. - The company is shifting its marketing strategy from a scale-oriented approach to an efficiency-oriented model, focusing on brand efficacy [12][13]. Inventory and Efficiency - The inventory turnover days improved from 391 days in the first quarter to 321 days in the second quarter, indicating enhanced operational efficiency [4][14]. - Despite a reduction in inventory balance to 1.168 billion yuan, it remains at historically high levels, suggesting further optimization is needed [4][14]. Business Segment Performance - The revenue from the raw materials segment was 626 million yuan, down 0.58%, while the medical terminal business generated 673 million yuan, down 9.44% [15]. - The skin science innovation segment saw a significant decline, with revenue of 912 million yuan, down 33.97%, while the nutrition science segment grew by 32.4% to 38 million yuan [15][16]. - The skin science segment remains the largest, accounting for 40.34% of total revenue, despite being the most affected by declines [16]. Company Culture and Market Position - The return of Zhao Yan has led to a shift in the company's culture, characterized by a more aggressive stance in addressing market challenges and public relations issues [17][18]. - The company has actively engaged in industry discussions, particularly regarding the comparison of its products with competitors, showcasing a strong commitment to market leadership [18][19].