Core Insights - Huaxi Biological reported its worst half-year results, with 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] - The company is undergoing significant reforms, with 2024 designated as the "Year of Transformation," and management changes aimed at accelerating strategic implementation [1][4] - The decline in performance is attributed to a significant drop in the skin science innovation business, which saw revenue decrease by 33.97% to 912 million yuan, accounting for 40.36% of total revenue [2][4] Business Performance - The core skin science innovation business has been a major drag on overall performance, with revenue from this segment declining for the second consecutive year [2][4] - Other business segments, including raw materials and medical terminal businesses, also experienced declines, with raw materials revenue slightly down by 0.58% and medical terminal revenue down by 9.44% [4] - R&D projects decreased by 88 compared to 2024, with a focus on raw materials and medical terminal businesses, although new product launches have not yet contributed to revenue growth [4] Management Changes - The company underwent a significant management overhaul, with 11 executives leaving during the reporting period, leading to increased management costs of approximately 29 million yuan [4] - A new board of directors was elected on June 11, 2025, as part of the organizational restructuring aimed at long-term development [4] Legal Issues - Huaxi Biological's wholly-owned subsidiary, Julang Co., has initiated international arbitration against South Korean biopharmaceutical company Medytox, claiming damages of up to 750 million HKD due to contract violations [5]