From the leading supplier of hyaluronic acid raw materials to well-known domestic skin care brands, every step of Bloomage Biotech seems to be stepping on the tuyere. From the delisting of Hong Kong stocks to the listing of the Science and Technology Innovation Board, Bloomage Biotech has created a "miracle", with a maximum market value of 150 billion, and the market calls it "the first stock of medical cosmetology".
But all the glories of yesterday have passed, and Bloomage Biotech is not having a good time at the moment.
01
Troubled
On February 28, Bloomage Biotech released its 2023 performance report, according to the data it disclosed, its performance in 2023 will decline seriously and its profitability will deteriorate.
In 2023, Bloomage Biotech will achieve operating income of 6.081 billion yuan (unified in RMB), a decrease of 4.37% from 6.359 billion yuan in the same period of the previous year, a net profit attributable to the owners of the parent company of 587 million yuan, a decrease of 39.50% over the same period of the previous year, and a net profit attributable to the owners of the parent company after deducting non-recurring gains and losses of 487 million yuan, a decrease of 42.85% over the same period of the previous year. At the end of the reporting period, the total assets were 8.454 billion yuan, a decrease of 2.62% from the beginning of the period, and the owner's equity attributable to the parent company was 6.908 billion yuan, an increase of 4.14% from the beginning of the period.
Bloomage Biotech explained in the financial report that the main reason for the sharp decline in revenue and net profit is that the company "got rid of the path dependence on past success and continued to promote the comprehensive upgrading and implementation of management reforms". The decrease in profit financial data was due to the decline in the company's total operating income and comprehensive gross profit margin, as well as the increase in depreciation and amortization and other expenses due to the large investment in the previous period.
However, the background of Bloomage Biotech's "bleak wind and bitter rain" is the rapid growth of the domestic skin care market. According to the "2024-2025 China Cosmetics Market Operation and Development Trend Research Report" released by iiMedia Consulting, the market size of China's cosmetics industry will be about 516.90 billion yuan in 2023, a year-on-year increase of 6.4%, and it is expected to increase to 579.10 billion yuan in 2025. Some domestic brands have also achieved growth, and domestic brands such as Proya and Bethany have also achieved revenue growth in the first three quarters of 2023, with revenue growth rates of 32.47% and 18.51% respectively
In contrast to the decline in performance, Bloomage Biotech's performance in the secondary market is also not good.
In 2017, Bloomage Biotech was privatized and delisted from the Hong Kong Stock Exchange. Bloomage Biotech announced that the company's stock price performance has been unsatisfactory since its listing. The low share price adversely affected the company's customer reputation, which in turn adversely affected its business and employee morale. According to Bloomage Biotech, the listing requires the company to bear administrative, compliance and other listing-related costs and expenses, and if such costs and expenses are cut, the savings can be used for the company's business operations.
Two years later, Bloomage Biotech switched to the Science and Technology Innovation Board, and after only 20 days of listing counseling, it was successfully listed on the list of acceptance of the Science and Technology Innovation Board. On November 6, 2019, Bloomage Biotech was officially listed on the Science and Technology Innovation Board. Its listing issue price was 78 yuan per share, and the closing price on the listing day was 85.1 yuan per share, with a market value of 40.8 billion yuan.
On July 15, 2021, Bloomage Biotech's share price reached the highest point of 313.48 yuan per share, a 300% increase compared with the initial issue price. Behind the "soaring" stock price is the compound annual growth rate of nearly 38% in the company's overall revenue from 2019 to 2022. As of the end of 2022, although Bloomage Biotech's share price has not created another miracle of skyrocketing, it has shown a fluctuating trend, and even if it declines, its range is higher than the initial issue price.
From the beginning of 2023 to the present, Bloomage Biotech's stock price has been showing a posture of "water flowing to a low place". On February 5, 2024, it reached a record low price of 50.22 yuan per share, down 35.62% from the initial issue price and more than 80% from the highest point. As of April 18 at the time of writing, Bloomage Biotech's share price came to 54.62 yuan per share, down 31.17% from the initial issue price and more than 80% from the highest point of the stock price.
02
transformation
"Bloomage Biotech was first known in the industry because of its raw materials, and its main business tended to be B-end, while the functional skin care products business was C-end. Previously, Zhao Yan, chairman of Bloomage Biotech, had said so.
Bloomage Biotech's exit from the B-end comes from the raw material of hyaluronic acid. Bloomage Biotech uses microbial fermentation to produce hyaluronic acid to achieve a leap in production, breaking the situation of domestic dependence on imports. In 2019, Bloomage Biotech's hyaluronic acid raw material sales accounted for 39% of the world's total, and in 2020, it accounted for 43%. Zhao Yan, the founder of Bloomage Biotech, is also known as the "Queen of Chinese Hyaluronic Acid".
While making a lot of money on the B-side, Bloomage Biotech is also quietly turning to the C-side. Zhao Yan first introduced the "Runbaiyan" with a certain reputation to the market, and the brand is also a domestic hyaluronic acid disposable stock solution, which can well maintain the efficacy of hyaluronic acid, and throw it away after use also ensures the hygiene of the product, avoids oxidation, and the concept of secondary throwing is introduced into the skin care product track. At the same time, Zhao Yan also found celebrities and KOLs to promote on social media platforms such as Xiaohongshu, and soon, Run Baiyan became popular in the market and became the first brand under Bloomage Biotech to enter the sales level of 1 billion.
Subsequently, Bloomage Biotech has successively launched more than 10 skin care product sub-brands, the most well-known ones are BM Muscle Active for oily skin, Mirepair for sensitive skin, and Quadi for anti-aging. Among them, the sales of Runbaiyan and Quadi have entered the 1 billion level.
Bloomage Biotech's diversified brand strategy is not only manifested in the transformation from B-end to C-end, but its business is even involved in the field of functional food and beverage.
Behind the transformation of Bloomage Biotech is the "outdated" concept of hyaluronic acid, and the medical beauty market and the public have gradually "disenchanted" hyaluronic acid. According to Frost & Sullivan data, from 2017 to 2021, the average price of hyaluronic acid raw materials dropped from 210 yuan/gram to 124 yuan/gram, a decrease of 41%.
Although Bloomage Biotech has launched dozens of skin care product brands and the positioning of the brands is also different, the essential efficacy of its products is not much different. Most of the products are still started from hyaluronic acid elements, which is seriously homogeneous, and there will be competition between sub-brand products.
In the 2023 semi-annual report, the four skin care brands promoted by Bloomage Biotech all declined. BM muscle activity decreased by 29.62% year-on-year, Mirepair decreased by 16.81% year-on-year, Quadi decreased by 10.10% year-on-year, and Runbaiyan also decreased by 2.04% year-on-year.
Bloomage Biotech is not unaware of the change in market direction, so it aims at the synthetic biology track. In the view of the founder Zhao Yan, synthetic biology is the most important discipline for human beings to face the future, which is closely related to people's lives and lives, and in the global scientific and technological competition, its fierceness even exceeds that of chips. Bloomage Biotech has also invested 2 billion yuan in research and development and has made some progress. However, it is unknown whether synthetic biology can reproduce the glory of hyaluronic acid and bring new explosive growth points to Bloomage Biotech.
03
controversy
Behind the rapid growth of Bloomage Biotech's sub-brand is its investment in high sales expenses.
In 2022, Bloomage Biotech's marketing expenses will exceed 2.4 billion yuan, accounting for 47.95% of revenue, and as a skin care brand focusing on effective skin care, its R&D expense rate on functional skin care products will be 6.8%. In the early stage, the high investment in marketing did bring it a huge increase in market and traffic, but the profit margin of Bloomage Biotech in 2023, when the marketing efforts were unabated, fell sharply.
Behind the high-frequency marketing, it has also brought a lot of controversy to Bloomage Biotech.
Previously, Bloomage Biotech chose the controversial male anchor Sun Xiaochuan for promotion and used improper copywriting, which caused a crisis of public opinion. As for why Sun Xiaochuan was asked to promote Baiyan, the official only explained that it was due to "lax work". Many consumers said: "I will not use Bloomage Biotech's products in the future."
A skin care brand with female consumers as the main user group chose male anchor Sun Xiaochuan largely because it wanted to open up the male consumer circle, but this marketing not only offended the female consumer group, but also did not bring male consumer increments to the brand.
Previously, the first domestic hyaluronic acid oral liquid "Shuijiquan" launched by Bloomage Biotech was accused of false publicity. This drinking liquid, which "has a significant improvement effect on skin moisture", has been mired in the controversy of "whether it is an IQ tax" since its inception, and everyone has different opinions, and some professionals have pointed out that its effect is no different from that of plain water. The Shanghai Municipal Consumer Protection Commission even named "Shuijiquan" on its official public account, hoping that relevant companies can provide consumers with authoritative evidence.
As a biotechnology start, Bloomage Biotech, whether it is making medical beauty products or skin care products, product efficacy is the key to supporting it to go further in the market. If Bloomage Biotech wants to reshape the growth myth brought by hyaluronic acid, it needs to find a new growth point, not only to develop truly effective products, but also to bet on the next market outlet......