By Ruo Nan Yongyang

Cathy

Producer Yoda

Prototype Research

Can recombinant collagen be the next hyaluronic acid?

A- share "three swordsmen of medical beauty" Huaxi Biology (688363.SH), Aimeike (300896.SZ) and Haohai Biotech (688366.SH) have all recently released their 2023 annual reports, and their performance has been differentiated.

"no two research" according to its annual report found that: in 2023, Haohai Biotech, Aimei customer revenue net profit are to achieve year-on-year growth; and Huaxi biological revenue net profit double down. In the "No Two Research" view, Huaxi Bio's net profit decline is mainly due to the reduction of its functional skin care products revenue and the decline in gross profit margin; at the same time, with the increasingly fierce competition in the hyaluronic acid market, product homogeneity and the continuation of the price war have brought more uncertainty.

Huaxi Biology is a hyaluronic acid full-industry chain enterprise. Its main businesses include raw material products, medical terminal products, functional skin care products and functional foods. Haohai Biotech is a high-tech biomedical enterprise focusing on R & D, production and sales of medical biomaterials. While Aimee focuses on the R & D and production of biodegradable materials and medical biomaterials.

as of the close of trading on March 28, huaxi biology closed at 56.14 yuan per share, corresponding to a market value of 27.04 billion yuan. Aimeike closed at 338.40 yuan per share, corresponding to a market value of 73.22 billion yuan. Haohai Shengke closed at 101.05 yuan per share, corresponding to a market value of 17.05 billion yuan.

"No 2 Research" According to the latest annual report of the three swordsmen of medical beauty, it is found that in 2023, the revenues of Huaxi Biology, Aimee and Haohai Biotech will be 6.081 billion yuan, 2.869 billion yuan and 2.654 billion yuan respectively. Revenue growth rates were -4.37%, 47.99% and 24.59% respectively.

During the same period, the net profits of Huaxi Biology, Aimee and Haohai Biotech were 0.587 billion yuan, 1.858 billion yuan and 0.416 billion yuan respectively. Net profit growth rates were -39.50%, 46.33% and 130.58% respectively.

an old article in November 2023 (volume of the third quarterly report of medical beauty, huaxi biology, aimeike and haohai biology scuffle in double 11

), we focus on the "medical beauty three swordsmen" despite the gradual disappearance of the hyaluronic acid dividend, but its income structure is single, still highly dependent on the hyaluronic acid product line.

Today, the three swordsmen of medical beauty not only face problems such as performance differentiation, but also face the challenge of the disappearance of hyaluronic acid dividends.

with the competition of hyaluronic acid track entering the white-hot stage, can recombinant collagen become a new tuyere? As a result, "no two research" updated some data and charts of the old article in November, the following Enjoy:

the 11th of 2023 will end. according to the statistics of tmall's big beauty makeup data, the medical beauty products of huaxi biology (688363.SH), aimeike (300896.SZ) and haohai shengke (688366.SH), which are called "three swordsmen of medical beauty", have not entered the TOP10 list of tmall double 11 beauty and skin care categories.

At the same time, its performance under pressure is also written in the 2023 annual report.

"no two research" according to its annual report found that: in 2023, "medical beauty three swordsmen" performance differentiation: haohai biotech revenue net profit performance is stable.

With the intensification of competition in the medical beauty market, who can go further?

double profit growth VS growth acceleration

in 2023, the performance of the "three swordsmen of medical beauty" will be different.

specifically, Huaxi biology achieved revenue of 6.081 billion yuan in 2023, down 4.37 percent from the same period last year; Haohai Biotech achieved revenue of 2.654 billion yuan, up 24.59 percent from the same period last year; and Aimeike achieved revenue of 2.869 billion yuan, up 47.99 percent from the same period last year, with the fastest growth rate among the three.

from the net profit, the annual report data show that: Huaxi biological net profit of 0.587 billion yuan, down 39.5 percent year-on-year, Haohai Shengke net profit of 0.416 billion yuan, up 130.58 percent year-on-year, Aimeike net profit of 1.858 billion yuan, up 46.33 percent year-on-year.

Combined with the growth rate of net profit, Haohai Biotech's net profit level is the highest, Aimeke's growth rate is slightly inferior, Huaxi Bio is directly left behind.

Amex's revenue and net profit increased significantly, mainly due to the steady growth of its solution injection products with "hi body" as the core and "cross-linked sodium hyaluronate gel containing L-lactic acid-ethylene glycol copolymer microspheres" (white angel).

Haohai Biotech also achieved a significant increase in revenue and net profit, mainly due to the rapid growth of hyaluronic acid product revenue in medical beauty and wound care products in 2023, which led to a significant increase in overall revenue.

According to the 2023 annual report of Haohai Biotech, in 2023, its hyaluronic acid program accounted for 0.602 billion yuan of revenue from medical beauty and wound care products, up 95.54 year-on-year, accounting for 56.94 of the total revenue. Among them, the sales revenue of "Haimei" hyaluronic acid products increased by 129.32, while the revenue of "Haiwei" and "Jialan" hyaluronic acid products increased by 94.14 and 57.70 respectively.

Huaxi biological revenue and net profit fell sharply, mainly due to the periodic decline of functional skin care business, and functional skin care business accounted for the largest proportion of total revenue, which led to a slight decline in overall revenue compared with the same period of last year; at the same time, it has continuously expanded the C- end market of skin care products in recent two years, and the substantial increase in sales expenses is also one of the reasons for its performance decline.

According to Huaxi Bio's financial report, its sales expenses for the first three quarters of 2020-2023 were 1.099 billion yuan, 2.436 billion yuan, 3.049 billion yuan and 1.943 billion yuan respectively. Year-on-year growth was 110.84 percent, 121.66 percent, 25.16 percent and -36.27 percent respectively. Revenue accounted for 41.75 percent, 57.96 percent, 49.23 percent and 47.95 percent respectively.

in the "no two research", in recent years, with all kinds of new composition emerge in an endless stream, the living space of hyaluronic acid is gradually squeezed; the former "medical beauty three swordsmen" can continue to take the "Yan value economy" fast forward, will depend on its specific product layout and the ability to control the future pattern.

Layout: Multi-wheel drive VS vertical subdivision

Although Huaxi Bio, Haohai Biotech and Aimee are jointly known as the three giants of hyaluronic acid A- shares, their development and layout in the field of hyaluronic acid are very different.

In the production of hyaluronic acid raw materials, Huaxi Bio's market share has been "one of the best", according to the Prospective Industry Research Institute report, 2021 China's total sales of hyaluronic acid raw materials accounted for 82.00 of global sales, Huaxi Bio-hyaluronic acid raw materials sales accounted for 44.00 of the world.

This is due to its technical advantages, such as microbial fermentation technology, enzyme digestion and precise control of molecular weight technology, hyaluronic acid "gradient 3D cross-linking" technology and terminal moist heat sterilization technology, which make it cost and production Efficiency has significant advantages.

Aimei is a sudden rise in terminal medical products. According to the 2023 annual report of Ameek, which cites Frost Sullivan research report statistics, based on 2021 sales, Ameek sodium hyaluronate skin filler ranked first among domestic manufacturers, with a domestic market share of 21.3 percent.

Haohai Biotech is involved in the production of hyaluronic acid raw materials and terminal medical products, but it has no absolute advantage in both fields.

In addition, according to the financial report of the three swordsmen of medical beauty, the gross profit margin of the three major manufacturers varies greatly. In 2020-2023, the gross margin of Haohai Biotech was 74.93, 72.10, 68.98 and 70.46 percent, while the gross margin of Aimee was 91.81, 93.70, 94.85 and 95.17 percent.

and Huaxi Bio's gross margin in the first three quarters of 2020-2023 was 81.41 percent, 78.07 percent, 76.99 percent and 73.07 percent, respectively.

In the "no two study", the reason for the difference in gross margin of the three swordsmen is mainly due to the different directions of their industrial layout.

Huaxi Biology is no longer satisfied with the B- end market with the absolute advantage of hyaluronic acid raw material production. In recent years, it has continued to force the C- end market, focusing on the layout of the entire industry chain. Huaxi Bio has expanded its multi-line business such as medical end products, functional skin care products and functional foods.

In addition, Huaxi Bio has extended its product line to the food industry. Since 2021, Huaxi Bio has launched the food brand "Black Zero", which focuses on mineral water and beverages containing hyaluronic acid. "Eating water light muscle" has become the selling point of hyaluronic acid food.

At present, functional skin care products have become its main source of income. According to Huaxi Bio's 2023 semi-annual report, functional skin care products achieved revenue of 1.966 billion yuan, a year-on-year decrease of 7.56, accounting for 63.92 percent of revenue. Among the four major brands, the revenues of Runbaiyan, Quadi, Mibel and Muscle are 0.632 billion yuan, 0.543 billion yuan, 0.217 billion yuan and 0.341 billion yuan respectively.

Haohai Biotech has taken advantage of its hyaluronic acid raw materials to expand its business focus to ophthalmology with the help of asset acquisitions.

from 2015 to 2017, haohai biotech successively acquired new industries in Henan universe and Shenzhen.Zhuhai Iger and other corporate shares, to obtain ophthalmic artificial crystal business. At present, the formation of covering ophthalmology, medical beauty and wound care, bone joint cavity viscose supplements, surgical anti-adhesion and hemostasis four sub-industry areas.

according to haohai shengke's 2023 annual report, ophthalmology and medical beauty innovative products are the company's largest businesses. in 2023, its ophthalmic products and medical beauty and wound care products will achieve revenue of 1.057 billion yuan and 0.928 billion yuan respectively, up 41.27 and 20.57 respectively year on year, accounting for 39.82 and 34.97 respectively.

Different from the first two, Aimei focuses on the development of medical and aesthetic terminal products, which is why its gross profit margin ranks first among the three.

Aimeike has made continuous efforts in hyaluronic acid medical and beauty terminal products, differentiated to meet the needs of subdivisions. The products under research cover a variety of products such as solution injection, gel injection, facial filling line, cosmetics and others. It has launched a number of products such as Hi-Body, Aifle, Baonida, Yimei One Plus One, and Tight Love to conquer the city and land on the subdivision track.

"No 2 Research" believes that in the industrial layout, relying on the early advantages of hyaluronic acid, the three swordsmen of medical beauty have embarked on different paths: Huaxi biological layout of medical terminal products, functional skin care products, functional food and other multi-line business of the entire industrial chain, Haohai Biotech to expand ophthalmology and medical beauty and wound care products, Aimeike focus on vertical subdivision track.

With the gradual intensification of competition on the hyaluronic acid track, the "Medical and American Three Musketeers" are actively seeking new growth points. As an emerging hot spot in the medical beauty industry, the collagen field is attracting the "medical beauty three swordsmen" to increase the layout.

under the current complex and changeable market pattern and user demand, the content ecology of microblog has gradually lost its attraction to advertisers in the past; in the face of the downward trend of advertising and marketing revenue, microblog has begun to turn its focus to the inside, deeply tapping the potential of the existing platform positioning, so as to find a way to break the situation.

Future: Botox VS Recombinant Collagen

according to the report of the prospective industry research institute, the market size of hyaluronic acid in China will reach 12.7 billion billion yuan in 2026, with an annual compound growth rate of about 14.18 percent.

However, with the increase of competitors in the hyaluronic acid track, the price of hyaluronic acid raw materials and end products has decreased year by year. According to the 2021 Global and China Hyaluronic Acid (HA) Industry Market Research Report released by Jost Sullivan, the average price of hyaluronic acid raw materials has dropped from 210 yuan/g in 2017 to 124 yuan/g in 2021, a drop of more than 40%.

In the case of increasingly crowded hyaluronic acid track and increasingly fierce competition; if you want to break the game, the layout of new categories is imperative. The three swordsmen of medical beauty chose the second largest sub-category of non-surgical medical beauty-Botox.

Previously, Huaxi Bio had established a joint venture with South Korea's Med to expand botulinum toxin-related products. In January 2020, according to CCTV Financial, South Korea revoked the license of the company's botulinum toxin type A Innotox for forging experimental materials.

In June 2020, the Korea Food and Drug Safety Service determined that unapproved stock solutions were Meditoxin used in the production of Medetox's botulinum toxin products, and eventually, Huaxi Bio parted ways with Medetox in September 2023 and turned its attention to the recombinant collagen market.

Aimee began to lay out the botulinum toxin market in 2018 and acquired a 25.42 per cent stake in South Korean botulinum toxin brand Hunons in 2021. According to the investor survey minutes of Aimee on March 28, 2023, "its botulinum toxin type A for injection has completed phase III clinical trials and is currently in the registration and application stage".

At the same time, Haohai Biotech has entered the field of botulinum toxin and small molecule drugs through equity investment, and currently forms a product portfolio layout of "hyaluronic acid + botulinum toxin + photoelectric equipment" in the field of medical beauty.

"no two research" that, in addition to the layout of botulinum toxin, medical beauty three musketeers plus recombinant collagen is also an important factor leading the future. Only by constantly innovating and introducing new product lines can we remain invincible in the fierce market competition.

according to the financial report of the three swordsmen of medicine and beauty, the research and development cost rates of huaxi biology in the first three quarters of 2020-2023 are 5.36, 5.75, 6.10 and 6.56 respectively. During the same period, the research and development cost rate of Haohai Biotech was 9.46, 9.51, 8.54 and 7.80. However, the research and development cost rate of Aimei Ke during the same period was 8.74, 7.04, 8.92 and 7.33.

Huaxi biological research and development cost rate is the lowest among the three swordsmen of medical beauty, but this is mainly due to Huaxi biological revenue volume. In absolute terms, Huaxi bio-research and development costs the largest investment, the first three quarters of 2023 for 0.388 billion yuan, the same period of Haohai Biotech and Aimeike were 0.182 billion yuan and 0.173 billion yuan, respectively.

according to the 2023 annual report of the three swordsmen of medical beauty, huaxi biology has 7-8 kinds of collagen under research, has realized the preparation of macromolecular recombinant collagen, and completed the listing of recombinant type iii human collagen raw material products in August last year; Haohai Biotech has a number of product pipelines under research, including intelligent cross-linked collagen fillers, etc., and the relevant research and development progress is progressing in an orderly manner. In addition, its acquisition of Harbin Peiqilong Biopharmaceutical Co., Ltd., with Class III medical device products, will explore more market opportunities in the application of collagen products.

In the "no two research", it seems that the first-mover advantage of the three swordsmen in the field of hyaluronic acid has laid its position in the medical beauty industry; but the competition in the medical beauty track is fierce, and the layout of botulinum toxin and recombinant collagen in the future may become the key to winning.

Recombinant collagen into a new outlet?

As the face injection of hyaluronic acid, there is always failure.

When the hyaluronic acid dividend narrows, the three swordsmen of medical beauty embark on different paths: Huaxi Bio uses the advantages of raw materials to develop functional skin care products; Haohai Biotech uses mergers and acquisitions to shift the focus to ophthalmology; Aimeike focuses on differentiated subdivision track, while laying out botulinum toxin.

In 2023, the performance of the three swordsmen of medical beauty was divided: Haohai Biotech and Aimeike achieved year-on-year growth in net revenue, while Huaxi Bio's net revenue fell. In the "No Two Research" view, Huaxi Bio's net profit decline is mainly due to the reduction of its functional skin care products revenue and the decline in gross profit margin; at the same time, with the increasingly fierce competition in the hyaluronic acid market, product homogeneity and the continuation of the price war have brought more uncertainty.

Today, the three swordsmen of medical beauty not only face problems such as performance differentiation, but also face the challenges of serious product homogeneity, lack of innovation and lack of breakthrough technology in the medical beauty industry.

As the competition on the hyaluronic acid track enters a white-hot phase, can recombinant collagen become a new outlet?

Some references to this article:

1. "annual net profit fell nearly 40%, Huaxi biology handed over its worst report card since listing", blue whale finance

2. "The" Three Musketeers of Medical Beauty "Received 11.6 billion yuan in 2023, Looking for New Growth Points Based on Hyaluronic Acid", Financial Network

3. "medical beauty accounts for the first place, haohai biotech's revenue was nearly 2.7 billion last year", with green eyes

4. "2023 Annual Report of Listed Companies in Medical and Beauty Industry Released, Industry Analysis Says-New Outlet after Collagen or Hyaluronic Acid", Information Times

Buji Research Solemnly declares that the views expressed in this article are the author's personal views and do not represent any investment advice from this platform. Investors should make investment decisions prudently and rationally.