Core Insights - The medical beauty industry is witnessing a competitive showdown between two leading companies, Juzhi Biotechnology and Huaxi Biotechnology, with contrasting financial performances in the first half of 2025 [1][8][14] - Juzhi Biotechnology reported a revenue of 3.113 billion RMB and a net profit of 1.182 billion RMB, achieving a net profit margin of 38%, while Huaxi Biotechnology experienced a 19.57% decline in revenue to 2.261 billion RMB and a 35.38% drop in net profit to 221 million RMB, marking its worst performance in seven years [1][8] Juzhi Biotechnology: Growth Drivers and Potential Concerns - Juzhi's growth is attributed to the synergy of products, channels, and brand, with professional skin care products accounting for 99.7% of total revenue [3][4] - The revenue from functional skin care products reached 2.410 billion RMB, a 24.2% increase year-on-year, primarily driven by the sales of key products [3][4] - Despite strong revenue growth, the company faces challenges such as a slight decrease in gross margin to 81.7% and increased sales and administrative expenses, leading to a rise in overall expense ratio to 38.8% [3][4][5] - The company heavily relies on its two main brands, Kefu Mei and Keli Jin, which together contribute 97.8% of revenue, raising concerns about its growth potential and risk exposure [5][6] Huaxi Biotechnology: Struggles and Strategic Reforms - Huaxi's performance has been under pressure, with a significant decline in its functional skin care segment, which accounts for over 40% of its business, down 34% [8][9] - The company has implemented drastic cost-cutting measures, reducing sales expenses by 39.86% in the second quarter, and has shifted its focus from scale to efficiency in brand promotion [9][10] - Huaxi has also streamlined its R&D efforts by eliminating 88 non-technical brand incubation projects and reallocating resources towards high-barrier products and medical terminal businesses [10][11] - Despite these reforms, Huaxi faces ongoing challenges, including a shrinking traditional hyaluronic acid market and the need for new high-end products to achieve significant sales [11][12] Industry Dynamics and Future Outlook - The competition between Juzhi and Huaxi reflects a broader shift in the medical beauty industry from marketing-driven growth to a focus on technological advancements and product innovation [14][15] - As regulatory scrutiny increases and consumer demand for genuine technological efficacy rises, both companies must adapt their strategies to maintain competitive advantages [14][15] - The outcome of this rivalry will serve as a critical case study for the industry, highlighting the importance of balancing marketing with substantial R&D investments to ensure long-term sustainability [15]