Core Viewpoint - Huaxi Biological is facing a trust crisis in the capital market due to continuous shareholding reduction by original shareholders and a significant drop in stock price, which has fallen over 80% from its peak. The company's core skincare business has seen a substantial decline in revenue over the past two years, leading to a notable decrease in both revenue and net profit for the first three quarters of 2025. The company is undergoing a "bone-scraping" reform to improve profitability through cost reduction and efficiency enhancement, while also seeking new growth through external investments. However, the lack of internal growth drivers and the underperformance of core business pose significant challenges for the company's recovery and investment transformation [2][3][4]. Financial Performance - As of November 6, 2025, Huaxi Biological's stock price was 49.8 yuan per share, representing an over 82% decline from its historical peak, with a market capitalization of only 24 billion yuan, down more than 120 billion yuan from its peak [4]. - For the first three quarters of 2025, the company reported revenue of 3.163 billion yuan, a year-on-year decrease of 18.36%, and a net profit attributable to shareholders of 252 million yuan, down 30.29% compared to the previous year [4][5]. - The core skincare innovation business has seen a continuous decline in revenue, with a drop of 8.5 billion yuan in 2023 and a further decline to 2.569 billion yuan in 2025, reflecting a year-on-year decrease of over 30% [5][6]. Business Challenges - The raw materials and medical terminal segments have also experienced declines, with the raw materials business showing a slight decrease of 0.58% in the first half of 2025, and the medical terminal business declining by 9.44% [6]. - The company's cost control measures have led to a reduction in sales expenses, which decreased by 5.14 billion yuan to 1.117 billion yuan in the first three quarters of 2025, resulting in a sales expense ratio of 34.26%, down 31.50% [9][10]. Strategic Initiatives - The company has initiated a brand "slimming" plan, shutting down non-core brands to focus on its main business. It has also made significant external investments, totaling 1.009 billion yuan across seven private equity funds, although these investments have not yet yielded substantial returns [10][11]. - Huaxi Biological has made strategic investments in biotechnology and pharmaceuticals, including a 138 million HKD investment in a Hong Kong-based company, aiming to enhance its platform value in the synthetic biology era [11]. Future Outlook - The company’s ability to recover its core skincare business and convert new investments into actual revenue will be critical for regaining trust in the capital market. The current profit improvements are seen as temporary measures, and without a return to double-digit revenue growth, the company may face further challenges in maintaining profitability [10][12].

Core Insights - The 2025 High-Quality Development Forum for Listed Companies and the 27th Golden Bull Award Ceremony took place in Nantong, Jiangsu, highlighting the theme "Moving Towards New Horizons for a Sustainable Future" [1] - Huaxi Biological, established in 2000, is recognized as a global leader in biotechnology and biomanufacturing, focusing on innovative solutions in aging intervention and tissue regeneration [1] - The Golden Bull Award, initiated in 1999 by China Securities Journal, aims to create a transparent and credible platform for recognizing outstanding listed companies in China's capital market [1] Company Overview - Huaxi Biological has built the world's largest synthetic biological manufacturing platform, offering integrated solutions across pharmaceuticals, medical aesthetics, nutritional science, and dermatology [1] - The company has developed several brands, including Runbaiyan, Kuaidi, Mibeier, Jihuo, and Huaxi Dangkang, showcasing its diverse product offerings [1] Award Details - The Golden Bull Award includes nine categories, such as "Most Investment Value Award," "Golden Bull Outstanding Entrepreneur Award," and "Golden Bull Secretary Award," recognizing excellence in corporate governance and investor relations [2] - The "Golden Bull Secretary Award" specifically honors company secretaries who excel in governance, equity management, information disclosure, and investor relations [2]

Core Viewpoint - The article discusses the challenges faced by Huaxi Biological, particularly its declining performance and the strategic changes initiated by its founder Zhao Yan to revitalize the company after a period of poor financial results [5][19]. Financial Performance - In the first three quarters of 2025, Huaxi Biological reported revenue of 3.163 billion yuan, a year-on-year decrease of 18.36%, and a net profit attributable to shareholders of 252 million yuan, down 30.29% year-on-year [5]. - The decline in profit is attributed to the drop in revenue from the skin science innovation transformation business, previously known as functional skincare products [5][10]. - Despite the overall decline, there was a notable improvement in the second quarter of 2024, with net profit increasing by 20.89% year-on-year, marking the first growth since the second quarter of 2024 [5][6]. Strategic Changes - Zhao Yan returned to the operational front line in March 2024, initiating a comprehensive reform of the company's management, sales expenses, and strategic direction [5][19]. - The company has reduced its sales expense ratio to 34.26%, the lowest in five years, by cutting costs in marketing and promotional activities [6]. - Huaxi Biological is undergoing a transformation process that includes organizational restructuring, talent system adjustments, and marketing model innovations [7][19]. Market Context - The medical beauty market is rapidly changing, with Huaxi Biological's market value dropping significantly from nearly 150 billion yuan at its peak in July 2021 to 25.977 billion yuan by October 29, 2024 [9]. - The stock price has also seen a dramatic decline, falling over 82% from its historical high of 312.99 yuan per share [9][10]. - The emergence of collagen peptide products has shifted investor focus away from hyaluronic acid, leading to a decline in Huaxi Biological's market position [12][13]. Competitive Landscape - Other companies in the hyaluronic acid sector, such as Haohai Biological and Aimeike, have also experienced significant stock price declines, indicating a broader trend in the market [11]. - New entrants focusing on collagen products have gained traction, with companies like Juzhibio and Jinbo Biological reporting substantial revenue growth, further challenging Huaxi Biological's market share [12][13]. Product Performance - The functional skincare product line, once a growth driver, has seen revenue declines exceeding 15% year-on-year in recent quarters, significantly impacting overall performance [6][13]. - The revenue from key brands like Runbaiyan and Kuaidi has also decreased, with projections indicating further declines in 2024 [21].

Core Viewpoint - The return of Zhao Yan, the founder of Hyaluronic Acid Biotech, to the frontline of operations has not yet led to a recovery in the company's performance, which remains in decline despite some signs of improvement in recent quarters [1][3]. Financial Performance - In the first three quarters of 2025, the company reported revenue of 3.163 billion yuan, a year-on-year decrease of 18.36%, and a net profit attributable to shareholders of 252 million yuan, down 30.29% year-on-year [1]. - The decline in profit is attributed to a decrease in revenue from the skin science innovation transformation business, previously known as functional skincare products [1]. - The company experienced its worst performance since its IPO in 2024, prompting Zhao Yan to return to operational management and initiate significant internal reforms [1][3]. - Despite the overall decline, the second quarter of 2025 saw a net profit increase of 20.89% year-on-year, marking the first growth since the second quarter of 2024 [1][2]. Cost Control Measures - The improvement in profit margins is primarily due to cost control, with the sales expense ratio dropping to 34.26% in the third quarter, the lowest in five years [2]. - The company has shifted away from a purely promotional sales model, focusing instead on optimizing brand research and communication, which has allowed for a significant reduction in promotional expenses [2]. Market Position and Stock Performance - The company's market capitalization has significantly decreased from nearly 150 billion yuan at its peak in July 2021 to approximately 25.977 billion yuan as of October 29, 2025, representing less than 20% of its peak value [3]. - The stock price has fallen over 82% from its all-time high of 312.99 yuan per share [3]. Industry Context - The decline in Hyaluronic Acid Biotech's performance is mirrored by other major players in the hyaluronic acid market, such as Haohai Biological and Aimeike, which have also seen significant stock price drops [5]. - The emergence of collagen peptide products has shifted investor focus away from hyaluronic acid, with companies like Juzhibio and Jinbo Biological experiencing substantial revenue growth [5][6]. - The functional skincare segment, which previously saw rapid growth, has faced challenges, with revenue declining over 15% year-on-year in both the second and third quarters of 2025 [2][6]. Strategic Adjustments - The company is undergoing a comprehensive transformation involving organizational structure, talent systems, marketing models, and supply chain collaboration [2]. - Zhao Yan's return to the operational front is seen as a critical move to address the company's recent performance issues and align its strategies with market changes [9][10].

Core Insights - Huaxi Biological has been selected for the Xinhua News Agency's brand project, aiming for deep collaboration in brand communication, think tank research, and resource integration [1][3] - The partnership is expected to enhance the high-quality development of China's biotechnology industry and showcase the innovation and brand strength of Chinese enterprises [3] Company Overview - Huaxi Biological, established in 2000, is a leading global manufacturer of anti-aging substances, particularly hyaluronic acid [4] - The company has developed a complete ecosystem from raw materials to end products, with business operations extending into pharmaceuticals, medical aesthetics, nutritional science, and dermatology [4] - Huaxi Biological has launched several brands, including "Runbaiyan," "Kuaidi," "Mibeier," "Jihuo," and "Huaxi Dangkang" [4] Industry Context - The collaboration comes at a time when the global biotechnology wave intersects with China's "Healthy China" strategy, highlighting significant development opportunities in the biomanufacturing sector [4] - The Xinhua News Agency's brand project has been operational since 2017, providing professional, systematic, and international services to over a hundred Fortune Global 500 companies and leading enterprises in various industries [4]

Core Viewpoint - Huaxi Biological is continuously downsizing its C-end functional skincare business, specifically shutting down the Runxiquan brand, which was not a major contributor to its revenue and profit [1][2]. Group 1: Business Strategy and Focus - The closure of Runxiquan is part of Huaxi Biological's strategy to focus on its core business and main brands, emphasizing that collagen is not a strategic focus for the company [1][2]. - The company has faced significant pressure from a sharp decline in the performance of its C-end functional skincare brands, with revenue from this segment dropping from over 70% to 40.36% of total revenue by mid-2025 [3]. - Huaxi Biological's chairman has publicly stated the need for corporate restructuring and a return to a startup mentality, highlighting issues with over-reliance on external marketing resources [3]. Group 2: Market Position and Challenges - The company positions itself as a "synthetic biotechnology company," differentiating itself from other domestic beauty brands that rely heavily on consumer sales [4]. - Despite the challenges in the C-end market, Huaxi Biological maintains a competitive edge through its B-end raw materials and medical terminal segments [4]. - The company has diversified its raw material offerings beyond hyaluronic acid, including ingredients like Ectoin and PDRN, but hyaluronic acid remains its core product [6]. Group 3: Brand Management and Market Perception - Huaxi Biological's main brands, including Runbaiyan and Kuadi, have overlapping market positions and unclear differentiation in consumer perception, which complicates their market strategies [9][10]. - The company has shifted from a strategy of aggressive brand expansion to a more focused approach, indicating a need to clarify which brands are core and which are experimental [10][11]. - The overall trend in the domestic beauty industry reflects a shift towards brand structure rebalancing, as companies seek to maintain main brand advantages while managing the performance of sub-brands [11].

Core Viewpoint - Huaxi Biological is accelerating its transformation by shutting down the Runxiquan brand, which has not significantly contributed to its revenue and profit, as part of a strategy to focus on its main business and key brands [2][5][6]. Brand Adjustment - The closure of the Runxiquan brand has been confirmed, with its official stores on platforms like Taobao no longer searchable and its products cleared from its Douyin flagship store [4][6]. - Huaxi Biological emphasized that Runxiquan was never a major brand for the company and its existence did not meaningfully impact revenue or profit [4][7]. Financial Performance - In 2024, Huaxi Biological's functional skincare business generated revenue of 2.569 billion yuan, a year-on-year decline of 31.62% [8]. - The revenue contributions from the four main brands—Runbaiyan (922 million yuan), Kuaidi (649 million yuan), Mibeier (290 million yuan), and BM Jihuo (279 million yuan)—showed significant declines, with year-on-year drops of 22.63%, 41.69%, 31.76%, and 52.06% respectively [8][9]. - Overall, Huaxi Biological's revenue and net profit decreased by 19.57% and 35.38% respectively in the first half of 2025, following an 11.61% and 70.59% decline in 2024 [8][9]. Market Challenges - The functional skincare sector is facing a development bottleneck, with increasing competition and a saturated market limiting growth opportunities for brands like Runxiquan [7][12]. - Huaxi Biological's past success was heavily reliant on "traffic operation," and rising traffic costs have led to a stagnation in performance growth [9][12]. Strategic Transformation - The company is undergoing a significant internal transformation, particularly in its core business of skin science innovation, which involves changes in operations, products, channels, organization, and branding [10][11]. - The shift from a traffic-driven sales model to a science-based brand communication strategy aims to provide scientifically validated skincare solutions [11]. - Huaxi Biological is focusing on optimizing team structures and improving operational efficiency to enhance overall business quality [11].

Core Insights - Huaxi Biological Technology Co., Ltd. reported its worst interim results since its listing, with a 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% [2][3] Business Performance - The three main business segments of Huaxi Biological all experienced declines: the skin science innovation transformation business fell by 33.97% to 912 million yuan, accounting for 40.36% of total revenue; the raw materials business saw a slight decrease of 0.58% to 626 million yuan, making up 27.7% of revenue; and the medical terminal business dropped by 9.44% to 673 million yuan, representing 29.77% of revenue [3][9] - The company faced significant profit pressure due to credit impairment, asset impairment, and personnel optimization, with a total of 48.37 million yuan in impairment losses reported in the second quarter [3] Management Issues - Internal management problems have surfaced, including a financial fraud scandal involving a former marketing director, which has led to public disputes and allegations of financial misconduct [5] - The company has undergone significant management changes, with a focus on reforming its operational structure and reducing reliance on external management [6][7] Strategic Reforms - Founder Zhao Yan returned to the company to implement major reforms, including a crackdown on corruption and a shift towards hiring entrepreneurial talent for management positions [6][7] - Huaxi Biological is concentrating its resources on high-margin core segments, specifically raw materials and medical terminal businesses, which contributed over 57% of its main business revenue in the first half of 2025 [9][10] Research and Development Focus - The company has reduced its R&D projects significantly, focusing on raw materials and medical terminal businesses, while sales expenses decreased by 31.44% to 808 million yuan [8] - Despite the challenges, there are signs of marginal recovery, with a net profit of 119 million yuan in the second quarter of 2025, marking a year-on-year increase of 20.89% [8]

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].

Core Viewpoint - Huaxi Biological's performance continues to decline, with significant drops in revenue and net profit in the first half of 2025, indicating ongoing pressure on the company's operations [2][5]. Financial Performance - The company's revenue for the first half of 2025 was 2.261 billion yuan, a year-on-year decrease of 19.57% [2][4]. - The net profit attributable to shareholders was 220 million yuan, down 35.38% year-on-year [2]. - The skin science innovation transformation business, which accounts for 40.36% of total revenue, saw a revenue decline of 33.97% to 912 million yuan [5][6]. Business Segments - The skin science innovation transformation business is the most severely affected segment, with a significant drop in revenue [5]. - The raw material business generated 626 million yuan, with a slight decline of 0.58%, while the medical terminal business brought in 673 million yuan, down 9.44% [6]. - The medical products in the terminal business achieved 467 million yuan in revenue, a decrease of 1.8% [6]. Reform Measures - The company has implemented significant reforms, including the return of the general manager to frontline operations to drive change [7]. - Sales expenses decreased by 31.44% year-on-year, attributed to reduced promotional costs in the skin science innovation transformation business [7]. - Research and development investment increased to 10.22% of total revenue, up from 7.13% in the previous year, indicating a strong commitment to innovation despite poor performance [7]. Quarterly Insights - In the second quarter of 2025, the company reported revenue of 1.183 billion yuan, a decline of 18.44% year-on-year, but net profit increased by 20.89% to 119 million yuan [8]. - The net profit margin rose for the first time since the first quarter of 2024, suggesting that reform measures may be starting to yield positive results [8].