One of the &#34;Three Musketeers&#34; in medical aesthetics, Haohai Biotech (688366.SH), took the lead in releasing its semi-annual report.
On August 17th, Haohai Biotech's 2024 first-half financial report showed that the current period's revenue and net profit attributable to the parent company were 1.404 billion yuan and 235 million yuan, respectively, representing year-on-year growth of 6.97% and 14.64%, respectively.
The revenue growth rate for the same period slowed by 28.69 percentage points compared to the first half of 2023.
This is due to the lackluster growth in revenue from Haohai Biotech's two main businesses, ophthalmology and medical aesthetics.
On one hand, affected by centralized procurement, the ophthalmology business generated revenue of 452 million yuan in the first half of 2024, a year-on-year decrease of 6.02%.
On the other hand, the revenue growth of Haohai Biotech's high-end hyaluronic acid and other products has slowed down. In 2024, it achieved revenue of 417 million yuan, with a year-on-year growth rate of 51.30%, which was more than 50 percentage points lower than the same period in 2023.
Moreover, the home beauty device business, such as RF devices that were expected to bring more performance increment, was impacted by policies and also experienced a declining trend in revenue.
Haohai Biotech's response strategy is to &#34;launch new products&#34; to optimize its product portfolio.
In ophthalmology, Haohai Biotech is promoting the market application of biogel for intraocular filling and hydrophobic modulated diffraction correction non-spherical artificial crystalline lens.
In medical aesthetics, Haohai Biotech's fourth-generation hyaluronic acid &#34;Hai Mei Yue Bai&#34; has been approved for listing and is expected to be launched for sale in the second half of the year.
Whether Haohai Biotech can accelerate its progress in the second half of the year remains to be seen.
<h2>Cooling Down of Two Main Businesses</h2>
After undergoing the test of two rounds of volume-based procurement, the battle-hardened Haohai Biotech still faced challenges.
In the first half of 2024, Haohai Biotech's revenue was 1.404 billion yuan, a year-on-year increase of 6.97%, which was 28.69 percentage points lower than the same period in 2023.
One of the main reasons for the decline in growth is the decrease in revenue from Haohai Biotech's ophthalmology business, which dropped from 481 million yuan in the first half of 2023 to 452 million yuan, a decrease of 6.02%, representing a 41 percentage point slowdown compared to the same period in 2023.
In November 2023, the prices of artificial crystalline lenses from five brands under Haohai Biotech selected through volume-based procurement experienced significant price reductions, leading to a certain shrinkage in revenue from the ophthalmology business.
In March of this year, Haohai Biotech stated, &#34;By optimizing the product structure, we aim to offset the loss of gross profit and unit price for a single variety. Overall, the revenue and gross profit of artificial crystalline lenses are still growing steadily.&#34;
However, the effect of &#34;price for volume&#34; is not significant.
In the first half of 2024, revenue from artificial crystalline lenses in the ophthalmology business reached 181 million yuan, a decrease of over 10% year-on-year.
Nevertheless, Haohai Biotech believes that the ophthalmology business is expected to turn around in the second half of the year.
&#34;With the deep implementation of national centralized procurement in the second half of the year, the sales volume of the group's winning artificial crystalline lenses and ophthalmic viscoelastic products is expected to further increase, especially in the sales volume of high-end artificial crystalline lens products. It is expected that sales revenue growth will be driven by the optimization of the product's internal structure,&#34; Haohai Biotech pointed out.
The medical aesthetics business, gradually shouldering the flag of Haohai Biotech's revenue, has also entered a period of slowing down
In the first half of 2024, the revenue reached 634 million yuan, a year-on-year increase of 25.72%, slowing down by 21.77 percentage points compared to the same period in 2023.
Boosted by the hyaluronic acid business in the medical beauty sector, Haohai Biotech's revenue in the first half of 2024 was 4.17 billion yuan, with a year-on-year growth rate of only 51.30% compared to over 100% growth in the first half of 2023.
This indicates that Haohai Biotech's third-generation hyaluronic acid product &#34;Hai Mei&#34; is facing a slowdown after experiencing high-speed growth in less than 4 years.
In 2020, &#34;Hai Mei,&#34; which focuses on precise sculpting functions, was approved for listing and can be used for nose augmentation, chin augmentation, temple augmentation, etc.
In the first half of 2023, &#34;Hai Mei&#34; hyaluronic acid product achieved sales revenue of 115 million yuan, with a staggering year-on-year growth of 377.37%. However, Haohai Biotech did not disclose the sales situation of &#34;Hai Mei&#34; in this year's interim report.
In terms of pricing, &#34;Hai Mei&#34; is not considered cheap among various domestic hyaluronic acid products.
On a medical e-commerce platform, the price of &#34;Hai Mei&#34; is 6,770 yuan/ml. Huaxi Biotech's Runzhi Dual-Phase 3 is priced at 1,740 yuan/ml, while the higher-priced Runzhi Single-Phase is 3,850 yuan/ml.
Expanding the types of hyaluronic acid and reducing reliance on a single product is an important strategy for Haohai Biotech in the future.
In July this year, Haohai Biotech's fourth-generation hyaluronic acid product &#34;Hai Mei Yue Bai&#34; has been approved for listing, which can promote the migration and proliferation of fibroblasts and keratinocytes, stimulate the production of local collagen, and demonstrate stronger regenerative activity compared to traditional products.
In terms of pricing, Haohai Biotech's pricing strategy for &#34;Hai Mei Yue Bai&#34; is positioned in the mid-to-high-end range.
With the first-generation entry-level &#34;Hai Wei,&#34; the second-generation dynamic filling &#34;Jiao Lan,&#34; the third-generation precise sculpting &#34;Hai Mei,&#34; and the fourth-generation organic cross-linked &#34;Hai Mei Yue Bai&#34; hyaluronic acid product combination, prices range from 600 yuan to 6,000 yuan.
Whether the performance space of Haohai Biotech can be opened up under the rich product portfolio remains to be seen.
<h2>Transition Period for Beauty Devices</h2>
In the medical beauty business, the significant difference between Haohai Biotech and Aimeike (300896.SZ) and Huaxi Biotech lies in its household beauty device business.
In the first half of 2024, revenue from radiofrequency and laser devices, including household beauty devices, reached 136 million yuan, a year-on-year decrease of 11.54%.
This is related to the strengthened supervision of household beauty devices by the National Medical Products Administration.
In March 2022 and March this year, the National Medical Products Administration issued documents clearly stating that starting from April 1st this year, radiofrequency beauty products used for &#34;reducing wrinkles, improving sagging, lifting apple muscles, etc.&#34; should be managed as Class III medical devices, one level higher than the previous Class II medical device certificate.
&#34;It's not easy to obtain a Class III medical device certificate, as the products involved have higher risks and require approval from the National Medical Products Administration. However, Class I and II medical device certificates only require approval from local medical products administrations. Therefore, the new regulations significantly increase the difficulty of obtaining certification for radiofrequency household beauty devices.&#34; A medical industry professional in Beijing told Xinfeng (ID: TradeWind01)
Despite earlier expectations, this has still led to Haohai Biotech's sales of several home radiofrequency beauty devices that do not hold the &#34;Class III Medical Device Registration Certificate&#34; being blocked.
&#34;During the reporting period, the above-mentioned policies have had a significant negative impact on the sales of home and lifestyle beauty products in the radiofrequency device product line of the Group in mainland China,&#34; said Haohai Biotech.
However, in July this year, the NMPA postponed the deadline for obtaining Class III Medical Device Registration Certificates for radiofrequency therapy devices and radiofrequency skin therapy devices to April 1, 2026.
The two-year window period has relieved Haohai Biotech and other home beauty device brands.
Currently, Haohai Biotech is advancing the application for Class III Medical Device Registration for the lifestyle beauty product MediMei.
Despite stricter regulations, more and more players are entering the market of home beauty devices, with even home appliance companies wanting a share of the pie.
In August this year, Gree launched a microcurrent beauty device priced at nearly ten thousand yuan, with functions covering improving forehead lines, nasolabial folds, and creating new muscle memory.
Against the backdrop of pressure on the ophthalmology business, Haohai Biotech's medical aesthetics business is receiving more expectations

06826

688366

- Haohai Life Sciences (688366.SH), one of the "Three Musketeers" in medical aesthetics, released its semi-annual report.
- In the first half of 2024, the company's revenue and net profit attributable to shareholders were 14.04 billion RMB and 2.35 billion RMB, with year-on-year growth of 6.97% and 14.64%, respectively.
- The slowdown in revenue growth was attributed to lackluster performance in its key businesses of ophthalmology and medical aesthetics, prompting the company to focus on launching new products to optimize its portfolio.

HAOHAI BIOTEC's high-end hyaluronic acid faces a slowdown, can the new product turn the tide?