On the evening of January 24, the 2024 performance forecast released by Bloomage Biotech (SH688363, stock price 49.24 yuan, market value 23.718 billion yuan) shows that it is expected to achieve a net profit attributable to the parent company of 146 million yuan to 175 million yuan in 2024, a year-on-year decrease of 70.47% to 75.36%.

Regarding the reasons for the change in performance, Bloomage Biotech mentioned that the company adheres to and continues to implement management reform and promote the implementation of management change projects. Due to the upgrading of the organizational structure, the reform of the salary system, the cost of consulting companies and equity incentive expenses of more than 70 million yuan, the management change has brought a certain short-term cost increase, but it has laid a solid foundation for the company's long-term development.

In addition to the above impacts, asset impairment is also an important factor in the decline of Bloomage Biotech's net profit attributable to its parent company. Bloomage Biotech mentioned that in accordance with the "Accounting Standards for Business Enterprises" and the relevant provisions of the company's accounting policies and accounting estimates, in order to truly and accurately reflect the company's financial position and operating results as of the current reporting period, in line with the principle of prudence, the company conducted impairment tests on accounts receivable, inventory, goodwill and other assets, and made a large impairment provision of about 210 million yuan for related assets with signs of impairment.

In addition, Bloomage Biotech also mentioned that the company's functional skin care products business, which accounts for a high proportion of revenue, is affected by various factors such as intensified market competition, industrial cycle fluctuations and strategic adjustments, and the adjustment is still continuing, and the business foundation is constantly consolidated from process to organization and operation, talent training, product system construction, etc., and the functional skin care business is expected to bottom out in 2025.

For the functional skin care products business, on the evening of January 25, Bloomage Biotech told the reporter of "Daily Economic News" that under short-term pressure, the skin care products business took the initiative to step on the brakes to adjust, and the long-term change effect can be expected.

It is worth noting that the performance of Bloomage Biotech's functional skin care products business is basically consistent with the performance of the industry. According to the China Cosmetics Association, in 2024, the total transaction volume of China's cosmetics market will be 1,073.822 billion yuan. In terms of retail sales of cosmetics above designated size, it will decrease by 1.1% year-on-year in 2024 compared with 2023.

"Affected by various factors such as intensified market competition, fluctuations in the industrial cycle and the company's strategic adjustment, the adjustment of the company's functional skin care business is still continuing, but the company is constantly consolidating the foundation of various businesses." Bloomage Biotech told the "Daily Economic News".

Compared with the brakes on the functional skin care products business, Bloomage Biotech's other two major businesses, raw materials and medical terminals, have given upward performance.

Bloomage Biotech mentioned in the performance forecast that during the reporting period, the company's raw material business maintained steady growth, mainly benefiting from the company's localized operation promoted in the internationalization strategy, and the sales volume in Europe, Japan, the Americas and other places achieved continuous growth, further consolidating its leading position in the global bioactive substances market. The company's medical terminal business has maintained rapid growth, and its medical aesthetic brand Runzhi has launched two new medical aesthetic injections. At the same time, through endogenous and epitaxial methods, we will accelerate the promotion of various medical aesthetic pipelines and enrich the company's product line.

In addition, Bloomage Biotech also mentioned that the company continues to increase investment in innovative business fields, and actively lays out emerging businesses with large market space and good development prospects in the future, such as regenerative medicine and functional food. The investment of more than 100 million yuan in strategic innovation business is expected to open up new growth space for the company's future development.

Cover image source: Visual China-VCG111491252177