Core Viewpoint - The acquisition of 55% stake in Shaanxi Ruisheng Biological Technology Co., Ltd. by Haili Biological has faced significant challenges, leading to a price adjustment from 9.35 billion to 5.36 billion yuan due to declining revenue and net profit caused by market competition and tightened tax policies [1][2][3] Group 1: Acquisition Details - Haili Biological announced a supplementary agreement to adjust the acquisition price of Ruisheng Biological's 55% stake from 9.35 billion yuan to 5.36 billion yuan, requiring the seller, Meilun Company, to return a price difference of 3.99 billion yuan [1][2] - The overall valuation of Ruisheng Biological was adjusted from 17 billion yuan to 9.74 billion yuan based on an asset assessment report as of June 30 [2] - The profit commitments for 2025 and 2026 were revised to 50 million yuan and 58 million yuan, respectively [1] Group 2: Performance Challenges - Ruisheng Biological's revenue and net profit have declined due to two main factors: increased competition in the market and the tightening of previously applicable tax incentives, which has led to a shift to a general taxation method with a 13% VAT rate [2][3] - The average price of Ruisheng Biological's oral product line dropped by 40% in Q2, despite a slight increase in market share of 6% to 7% [2] - The company has faced challenges in maintaining profitability due to significant price declines that cannot be offset by market share gains [2] Group 3: Strategic Shift - Haili Biological's acquisition of Ruisheng Biological is seen as a strategic move to enter the human health sector, transitioning from the animal health industry [1][3] - Ruisheng Biological specializes in regenerative medicine products, including oral bone repair materials and absorbable biological membranes [3][4] - The company has had recent success with the acceptance of registration applications for new medical devices aimed at jawbone defect repair [4]