Core Viewpoint - The company reported a decline in revenue and net profit for the first three quarters of 2025, with revenue at 3.16 billion and net profit at 250 million, reflecting year-on-year decreases of 18.4% and 30.3% respectively [1] Group 1: Financial Performance - In Q1, Q2, and Q3 of 2025, the company achieved revenues of 1.08 billion, 1.18 billion, and 900 million respectively, with year-on-year declines of 20.8%, 18.4%, and 15.2% [1] - The net profit for Q1, Q2, and Q3 of 2025 was 100 million, 120 million, and 30 million respectively, showing a year-on-year change of -58.1%, +20.9%, and +55.6% [1] - The gross profit margin for the first three quarters of 2025 was 70.7%, a decrease of 3.2 percentage points year-on-year, while the gross profit margin for Q3 2025 was 69.9%, down 2.5 percentage points year-on-year [3] Group 2: Business Segments - The raw materials business showed steady growth, with a revenue increase of 2.69% year-on-year in Q3 2025, and a high gross margin of 84.8%, indicating strong core barriers in high-end raw materials [2] - The medical terminal business achieved revenue of 359 million in Q3 2025, a year-on-year increase of 14.51%, with the medical beauty segment contributing 229 million, up 7.88% [2] - The skin science innovation transformation business is in a deepening transition phase, with a nearly 10 percentage point decrease in sales expense ratio in Q3 2025, leading to improved overall operational quality [2] Group 3: Strategic Initiatives - The company is transitioning its brand communication from a "scale-oriented" approach to an "efficiency-oriented" one, resulting in a significant reduction in sales expense ratio [4] - The company is actively pursuing external growth, including strategic placements in companies like Saint Pharma and He Yuan Bio, to expand its product offerings in the field of small nucleic acid drugs and plant-based bioactive products [4] - The company is enhancing its global research collaborations, with strategic partnerships established for ECM-related research and joint development projects in PDRN with leading international medical beauty firms [4] Group 4: Future Outlook - The company has adjusted its net profit forecasts for 2025-2027 to 380 million, 540 million, and 720 million, reflecting downward revisions of 19%, 9%, and 10% respectively [5] - The company is recognized as a leading player in the ECM field, with a strong emphasis on foundational research and product synergy, maintaining a "buy" rating despite current challenges [5]

Investment Rating - The investment rating for the company is "Accumulate" (maintained) [2] Core Views - The company has shown continuous improvement in profitability in Q3 2025, with expectations for operational flexibility to be released [8] - The company achieved a revenue of 3.163 billion yuan in the first three quarters, a year-on-year decrease of 18.4%, and a net profit attributable to shareholders of 252 million yuan, down 30.3% [8] - The company anticipates a rebound in performance due to the improvement in its skin care business [8] Financial Performance Summary - Revenue for 2023 is projected at 6.076 billion yuan, with a decline of 4.5% year-on-year, and a net profit of 593 million yuan, down 39.0% [7] - The company expects net profits to recover to 411 million yuan in 2025, with a projected PE ratio of 62.7 [8] - The gross profit margin for Q3 2025 was 69.9%, a decrease of 2.5 percentage points [8] Business Segments Summary - The raw materials segment generated revenue of 923 million yuan in the first three quarters, with a gross margin of 84.81% [8] - The medical terminal segment saw a revenue increase of 14.5% in Q3 2025, with the medical beauty business contributing 229 million yuan [8] - The nutrition science business achieved its first quarterly profit while maintaining revenue growth [8] Future Outlook - The company forecasts net profits of 4.11 billion yuan, 5.09 billion yuan, and 5.74 billion yuan for 2025, 2026, and 2027 respectively, with corresponding PE ratios of 62.7, 50.7, and 44.9 [8]

Core Viewpoint - Huaxi Biological is a leading company in the global hyaluronic acid industry, leveraging microbial fermentation and cross-linking technologies to establish a comprehensive business model from raw materials to end products [1] Group 1: Business Performance - In Q3 2025, Huaxi Biological achieved a revenue of 3.163 billion yuan, ranking first in the industry, surpassing the industry average of 2.108 billion yuan and the median of 1.865 billion yuan [2] - The main business segments include skin science innovation transformation (0.912 billion yuan, 40.34%), medical terminal products (0.673 billion yuan, 29.76%), and raw material products (0.626 billion yuan, 27.70%) [2] - The net profit for the same period was 0.252 billion yuan, ranking third in the industry, below the industry average of 0.641 billion yuan and the median of 0.565 billion yuan [2] Group 2: Financial Ratios - As of Q3 2025, Huaxi Biological's debt-to-asset ratio was 16.29%, lower than the previous year's 18.82% and below the industry average of 16.58%, indicating good solvency [3] - The gross profit margin for the same period was 70.68%, down from 73.93% year-on-year and below the industry average of 84.95% [3] Group 3: Shareholder Information - As of September 30, 2025, the number of A-share shareholders decreased by 3.79% to 31,300, while the average number of circulating A-shares held per household increased by 3.94% to 15,400 [5] - Major shareholders include various ETFs, with significant reductions in holdings noted for several funds [5] Group 4: Executive Compensation - The chairman and general manager Zhao Yan's compensation increased from 2.0249 million yuan in 2023 to 2.2282 million yuan in 2024, an increase of 203,300 yuan [4] Group 5: Future Outlook - Huachuang Securities projects net profits for 2025-2027 to be 0.458 billion, 0.618 billion, and 0.748 billion yuan respectively, with a target valuation of 30.89 billion yuan for 2026 [6] - Longjiang Securities anticipates EPS for 2025-2027 to be 0.99, 1.36, and 1.60 yuan per share, maintaining a "buy" rating [6]

Investment Rating - The report maintains a "Recommendation" rating for Huaxi Biological [2] Core Views - Huaxi Biological is currently undergoing a systematic adjustment phase, with initial positive results on the profit front. The company reported a revenue of 2.261 billion (down 19.57% year-on-year) and a net profit attributable to the parent company of 221 million (down 35.38%) for the first half of 2025. However, the second quarter showed a turning point with a net profit of 119 million, up 20.89% year-on-year [2][3] - The company is focusing on strategic marketing reductions and effective cost control, leading to a recovery in profitability. The gross margin for the first half of 2025 was 70.99% (down 3.53 percentage points), while the net margin was 9.77% (down 2.39 percentage points) [2][3] - The report highlights the resilience of the sales of Class III medical devices, despite a decline in the skin science innovation transformation business, which saw a revenue drop of 33.97% [2][3] Financial Summary - For 2025, the expected total revenue is 4.959 billion (down 7.7% year-on-year), with a projected net profit of 458 million (up 162.9% year-on-year). The earnings per share are expected to be 0.95 yuan, with a price-to-earnings ratio of 58 [4][9] - The company’s total market capitalization is approximately 26.695 billion, with a current share price of 55.42 yuan and a target price of 64.13 yuan [4][5] - The report anticipates a recovery in the core business operations, with projected net profits for 2025, 2026, and 2027 being 458 million, 618 million, and 748 million respectively [2][4]

Investment Rating - The investment rating for the company is "Buy" (maintained) [6][15]. Core Views - The company is undergoing a transformation towards efficiency-oriented brand communication, which has led to revenue growth pressure but improved profitability. Revenue projections for 2025-2027 are estimated at 45.65 billion, 50.31 billion, and 57.10 billion yuan, with corresponding growth rates of -15.0%, 10.2%, and 13.5%. Net profit attributable to shareholders is expected to be 4.63 billion, 5.67 billion, and 6.46 billion yuan, with growth rates of 165.5%, 22.6%, and 13.9% respectively. Earnings per share (EPS) are projected at 0.96, 1.18, and 1.34 yuan per share [4][15]. Summary by Sections Financial Performance - In the first half of 2025, the company reported revenue of 22.61 billion yuan (down 19.6% year-on-year) and a net profit of 2.21 billion yuan (down 35.4% year-on-year). In Q2 2025, revenue was 11.83 billion yuan (down 18.4% year-on-year), while net profit was 1.19 billion yuan (up 20.9% year-on-year) [12][13]. Business Strategy - The company’s management has returned to frontline operations for systematic adjustments, focusing on restructuring brand communication and prioritizing efficiency. In Q2 2025, the sales expense ratio decreased by 12.46 percentage points. The company is concentrating on high-barrier technology asset transformation and enhancing its consumer goods business advantages [13][14]. Medical Business - The medical terminal business generated revenue of 6.73 billion yuan in the first half of 2025, with skin-related medical product revenue at 4.67 billion yuan (down 1.8% year-on-year). The company launched compliant water-light products and strengthened its one-stop anti-aging solutions. The direct sales channel accounts for over 80% of the revenue, and the company is optimizing its product structure and channel layout [14]. Profitability Forecast - The company is expected to face revenue growth challenges but improve profitability. The projected revenue for 2025-2027 is 45.65 billion, 50.31 billion, and 57.10 billion yuan, with net profits of 4.63 billion, 5.67 billion, and 6.46 billion yuan respectively. The EPS is forecasted to be 0.96, 1.18, and 1.34 yuan per share [15][16].

Core Viewpoint - The performance of listed medical beauty companies in China shows significant divergence in the first half of 2025, with major players in the hyaluronic acid market facing growth bottlenecks, while companies in the recombinant collagen segment are experiencing substantial growth [1][2][7]. Group 1: Performance of Major Companies - Huaxi Biological reported revenue of 2.261 billion yuan, a year-on-year decline of 19.57%, and a net profit of 221 million yuan, down 35.38% [1][2]. - Haohai Biological achieved revenue of 1.304 billion yuan, a decrease of 7.12%, with a net profit of 211 million yuan, down 10.29% [1][2]. - Aimeike's revenue was 1.299 billion yuan, down 21.59%, with a net profit of 789 million yuan, a decline of 29.57% [1][2]. - In contrast, Jinbo Biological, the first stock of recombinant collagen on the Beijing Stock Exchange, reported revenue of 859 million yuan, an increase of 42.43%, and a net profit of 392 million yuan, up 26.65% [1][2]. - Giant Biological's revenue reached 3.113 billion yuan, a year-on-year increase of 21.66%, with a net profit of 1.182 billion yuan, up 20.23% [1][2]. Group 2: Market Trends and Competition - The medical beauty market in China has seen rapid growth, with the market size increasing from 99.3 billion yuan in 2017 to 189.2 billion yuan in 2021, reflecting a compound annual growth rate of 17.5% [4]. - The competition in the hyaluronic acid sector has intensified, leading to price reductions and impacting the performance of leading companies [4][6]. - The demand for aesthetic products is evolving, with a shift towards user-oriented solutions and a growing emphasis on product innovation and technology [3][7]. Group 3: Strategic Adjustments and Innovations - Huaxi Biological is shifting its marketing strategy to focus on brand building and consumer engagement through platforms like Xiaohongshu and WeChat, moving away from price-driven promotions [5]. - Haohai Biological is also adapting its product offerings, with new high-end hyaluronic acid products showing promising market performance [6]. - The recombinant collagen market is projected to grow significantly, with estimates suggesting it will reach 585.7 billion yuan by 2025, driven by new product launches and market expansion [8][9]. Group 4: Regulatory and International Expansion - The medical beauty industry is witnessing an increase in compliant products, with several companies obtaining third-class medical device registration certificates, enhancing market offerings [10][11]. - Companies like Huaxi Biological and Haohai Biological are actively pursuing international markets, with Huaxi reporting significant revenue from overseas operations [11][12]. - Aimeike's acquisition of a majority stake in a South Korean company highlights the trend of domestic firms expanding their global footprint [12].

Core Viewpoint - Since 2023, Huaxi Bio has faced significant challenges but showed signs of recovery in the second quarter of 2025, indicating a potential return to growth driven by internal reforms initiated by Chairman Zhao Yan [3][4][20]. Financial Performance - In the first half of 2025, Huaxi Bio reported total revenue of 2.261 billion, a year-on-year decrease of 19.57%, and a net profit attributable to shareholders of 221 million, down 35.38% [7][9]. - In the second quarter of 2025, the company achieved revenue of 1.183 billion, a decrease of 18.44% year-on-year, but net profit increased by 20.89% to 119 million, marking a significant turnaround [8][10]. Operational Changes - Zhao Yan's return to frontline operations in March 2025 marked a pivotal moment for the company, leading to a series of organizational reforms aimed at enhancing efficiency and reducing bureaucratic inertia [13][15][20]. - The company shifted its marketing strategy from price promotions to a more scientific and content-driven approach, significantly reducing sales expenses by 31.44% [10][19]. Research and Development - R&D expenses increased by 15.25% year-on-year, reaching 231 million, which accounted for 10.22% of total revenue, reflecting a strategic focus on core research areas [29][30]. - The company optimized over 30% of its R&D projects, leading to the launch of six new raw materials and the recognition of its technology on an international level [30][31]. Market Position and Strategy - Huaxi Bio's core business segments, including raw materials and medical terminals, remain strong, with a combined revenue share of 57.5% [24]. - The company is focusing on deep breakthroughs in R&D, particularly in extracellular matrix and cellular communication, to address aging and tissue regeneration [28][32]. Future Outlook - The company is well-positioned to benefit from the recovery of the cosmetics market in 2025, particularly in the functional skincare segment, aligning its reforms with market trends [33]. - Huaxi Bio's strategic shift towards a more integrated approach in manufacturing and branding is expected to enhance its long-term growth potential [33].

Investment Rating - The report maintains a "Buy" rating for the company [1]. Core Views - The company has shown significant improvement in profits in Q2 2025, with a notable recovery in net profit compared to Q1 2025 [1][10]. - The chairman's active involvement in management is expected to drive positive changes in the company's performance in the second half of the year [10]. - The company is undergoing a transformation towards an "efficiency-oriented" approach, which has led to a significant reduction in sales expense ratios [9][10]. Financial Performance Summary - For the first half of 2025, the company reported revenues and net profits of 2.26 billion and 220 million yuan, respectively, reflecting year-on-year declines of 19.6% and 35.4% [4]. - Q2 2025 saw revenues and net profits of 1.18 billion and 120 million yuan, with a year-on-year decline of 18.4% in revenue but a 20.9% increase in net profit [4]. - The company's gross margin for the first half of 2025 was 71.0%, down 3.5 percentage points year-on-year [8]. Business Segment Performance - The raw materials segment showed resilience, with revenue of 630 million yuan, a slight decline of 0.6% year-on-year, while the medical terminal products segment generated 670 million yuan, down 9.4% [5]. - The skin science innovation transformation business experienced a significant decline of 34.0% in revenue, totaling 910 million yuan, while the nutrition science innovation transformation business grew by 32.4% to 40 million yuan [5]. - The company launched several new medical aesthetic products in 2025, contributing to a diversified product matrix [6]. Market Outlook - The company is expected to return to a positive growth trajectory, with revenue forecasts adjusted to 4.825 billion, 5.631 billion, and 6.735 billion yuan for 2025, 2026, and 2027, respectively [11]. - The report anticipates that the company's earnings per share (EPS) will be 0.98, 1.23, and 1.66 yuan for 2025, 2026, and 2027, respectively [11]. - The chairman's plan to increase shareholding by 200 to 300 million yuan within six months reflects confidence in the company's future development [11].

Investment Rating - The industry investment rating is "Overweight" (看好) [2] Core Insights - The report highlights a scientific revolution in the anti-aging field, emphasizing the role of hyaluronic acid (HA) as a key component in extracellular matrix (ECM) aging intervention [5][6] - Recent studies indicate that high molecular weight HA can extend healthy lifespan in mice, reduce cancer risk, and improve inflammatory responses, suggesting its potential beyond traditional moisturizing [5] - The report notes that the repositioning of HA in the scientific community opens new growth opportunities in the anti-aging market [5] Summary by Sections Industry Overview - The report discusses the transition of anti-aging strategies from local interventions to systemic interventions, marking a new era in anti-aging research [5][6] Company Analysis - Huaxi Biological Technology has positioned itself at the forefront of ECM research, recently obtaining approvals for two Class III medical devices aimed at facial quality improvement [6] - The first product, "Runbaiyan·Glass," utilizes a non-crosslinked HA formula combined with lidocaine, achieving a treatment efficacy rate of 94% with effects lasting over three months [6] - The second product, "Runzhi·Titu," is the first compliant product in China to explicitly target facial quality improvement through kinetic factors, indicating a shift towards cellular-level anti-aging solutions [6] Market Dynamics - Huaxi Biological has undergone multiple industrial revolutions, transitioning from microbial fermentation to precise molecular weight control and exploring synthetic biology for HA production [6] - The company leads the industry with the largest synthetic biology pilot platform and the highest market share in HA and Class III medical device registrations [6] - The report identifies Huaxi Biological and Aimeike as beneficiaries of these advancements in the anti-aging sector [6]

Investment Rating - The industry investment rating is "Positive" (首次) [2] Core Insights - The report highlights a scientific revolution in the anti-aging field, emphasizing the role of hyaluronic acid (HA) as a key element in extracellular matrix (ECM) aging intervention [5] - Recent studies indicate that high molecular weight HA can extend healthy lifespan in mice, reduce cancer risk, and improve inflammatory responses, suggesting its benefits go beyond traditional moisturizing [5] - The report notes that the repositioning of HA in the scientific community opens new growth opportunities in the anti-aging market [5] Summary by Sections Industry Overview - The report discusses the transition of anti-aging strategies from local interventions to systemic interventions, marking a new era in anti-aging research [5] Company Developments - Huaxi Biotechnology has positioned itself at the forefront of ECM research, with two Class III medical device products recently approved [6] - The first product, "Runbaiyan·Glass," is the first approved water-light product for facial skin quality improvement in China, showing a clinical effectiveness rate of 94% [6] - The second product, "Runzhi·Titu," is the first compliant active ingredient product with a clear indication for facial skin quality improvement [6] Market Positioning - Huaxi Biotechnology leads the HA industry with the largest synthetic biology pilot platform and superior HA raw material preparation capabilities [6] - The company has 11 registered Class III medical devices in aesthetic injections, surpassing competitors like Aimeike and Haohai Biological [6] - The report identifies Huaxi Biotechnology and Aimeike as beneficiaries of the industry's growth [6]