Recently, the market value of Bloomage Biotech has shrunk nearly five times to 3146.3 billion yuan, reaching 150 billion yuan at its peak. As of January 29, 2024, its price per share was 6532 yuan, a cumulative decline of 49 in the past year03%。
The competition in the stock market is fierce, Bloomage Biotech's main business and gross profit margin have begun to decline, the raw material story has reached a bottleneck, the growth of the functional skin care products business is difficult to sustain, the edible grade hyaluronic acid business has been questioned, and the road to change is difficult.
Dilemma: Find a new way
According to public information, Bloomage Biotech is a biotechnology and biomaterials company, which has established a whole industry chain business system of bioactive materials from raw materials to medical terminal products, functional skin care products and functional foods. It made its fortune with hyaluronic acid and has become the world's largest hyaluronic acid raw material supplier.
On November 6, 2019, Bloomage Biotech officially landed in the capital market and was listed on the A-share market with an issue price of 4779 yuan shares, raising 2.3 billion yuan, with a market value of 4084.8 billion yuan. Within one year of listing, the stock price more than tripled, and the market value increased to 150 billion yuan. In 2021, it accounted for 44% of the global hyaluronic acid raw material market.
With the rapid development of the industry, the market has shifted from increment to stock, and hyaluronic acid is no longer the moat of Bloomage Biotech. The financial report shows that from 2021 to 2022, the growth rate of its raw material business will slow down significantly, with revenue of 90.5 billion and 98 billion yuan, a year-on-year increase of 2862% and 831%, accounting for 1829% down to 1541%。
With the rise of light medical aesthetics, the industry has begun to focus on functional skin care products. Some industry insiders said that since 2019, the ingredient party has increasingly become the trend and direction of skin care. With the endorsement of the unique "largest manufacturer of hyaluronic acid raw materials", Bloomage Biotech has sprung up to help Runbaiyan, Quadi, Mirepair and BM Muscle Active to achieve rapid growth. At a time when other brands have not yet transformed into an ingredient party consciousness, Bloomage Biotech has already become famous, gained a lot of traffic, and held up functional skin care products on the C-end.
The outlets all want to increase their bets, and representative brands such as Freda, Avène, SkinCeuticals, Winona, etc. have also settled in. As an early entrant to the track, Bloomage Biotech gained a first-mover advantage. From 2019 to 2022, the revenue scale of Bloomage Biotech's functional skin care products business will increase from 63.4 billion yuan increased rapidly to 460.7 billion yuan, accounting for 3362% to 7245%。In 2022, its functional skincare products achieved revenue of 460.7 billion yuan, a year-on-year increase of 3880% with a gross margin of 7837%。In the same period, its revenue was 188.6 billion, 263.3 billion, 494.8 billion and 635.9 billion, a year-on-year increase93% and 2853%。
However, the transformation to focus on the C-end market has also caused its costs to soar. From 2019 to 2022, Bloomage Biotech's sales expenses were 52.1 billion yuan, 109.9 billion yuan, 243.6 billion yuan, 304.9 billion, a year-on-year increase respectively17%。Ultra-high sales expenses began to eat into profits, and in the same period, Bloomage Biotech's net profit attributable to the parent company was 58.6 billion, 64.6 billion, 78.2 billion and 97.1 billion, a year-on-year increase13% and 2411%, well below the revenue growth in the same period.
In the first three quarters of 2023, Bloomage Biotech's functional skin care business encountered peak difficulties. Its total revenue in the third quarter was 422.1 billion yuan, down 229%；Net profit attributable to shareholders of listed companies51.4 billion yuan, down 2407%。In 2023, Bloomage Biotech will have a net profit for the first time.
New growth curves are hard to find
The traditional advantages are unsustainable, and Bloomage Biotech has no choice but to find new growth points in order to achieve corner overtaking.
In 2021, Bloomage Biotech opened the first year of development of the functional food business, launched the first hyaluronic acid drinking water "Shuijiquan" in China, and advertised that the product has moisturizing, antioxidant properties, and strengthening the functions of water locking on the human body.
According to the People's ** report, the Shanghai Municipal Consumer Protection Commission found that hyaluronic acid is a medical cosmetic injection to achieve hydration and improve skin function. As a food raw material, hyaluronic acid is a very long-chain polysaccharide, which will be broken down into monosaccharides and disaccharides after entering the gastrointestinal tract and then absorbed. At present, there is no authoritative evidence that the consumption of hyaluronic acid can promote the synthesis of hyaluronic acid in the body. Therefore, there is no evidence to show that hyaluronic acid foods can "eat water and light muscle".
People** pointed out that "the same bottle of 330 ml of drinking water, after adding hyaluronic acid, has increased by four or five times, and consumers are undoubtedly paying for the so-called efficacy." "The food-grade hyaluronic acid business has suffered a rollover.
From the supply of hyaluronic acid raw materials to the main functional skin care products and functional food business, the results seem to be unsatisfactory, and Bloomage Biotech has turned its goal to the research and development of synthetic biology.
According to the statistics of the international research agency Reportlinker, the global market size of synthetic biology in 2022 will be 131$1 billion, an increase of 3020%。It is expected to grow at a CAGR of 2727%, and the global synthetic biology market will reach about 336. by 2026$3 billion.
However, from 2019 to 2022, Bloomage Biotech's R&D expenses were 09.4 billion yuan, 14.1 billion yuan, 28.4 billion yuan, 38.8 billion yuan, in stark contrast to sales investment, heavy marketing and light research and development make it criticized by the market, at present, it redefines itself as a biotechnology company driven by scientific and technological innovation, can it win market recognition?
It is worth mentioning that Bloomage Biotech is the earliest company in China to deploy botulinum toxin, but unexpectedly, in 2022, it terminated its 7-year cooperation with Medytox, a Korean botulinum toxin company, mainly because a series of Medytox products (including botulinum toxin products) were recalled and destroyed by the South Korean Ministry of Food and Drug Safety.
According to Frost & Sullivan, from 2017 to 2021, the penetration rate of functional skin care products based on recombinant collagen has increased from 63% to 149%, which is expected to increase from 17. in 20226% further increases to 30 in 20275%。However, Juzi Biotech, Jinbo Biotech, Jiangshan Juyuan, Chuangjian Medical, Jiyuan Biotech and others have already invested in the recombinant collagen market, which is already a red ocean.
Some industry insiders said that Bloomage Biotech's future growth needs to be driven by more innovation, and only by increasing R&D investment and constructing a stronger product matrix can we fundamentally enhance brand competitiveness.
Author |Zheng Haoyuan, Yan Jianing|Intern.
Editor-in-Chief |Chen Junhong.