On January 24, Bloomage Biotech (688363.SH) released the performance forecast of its 2024 annual report, which is expected to achieve a net profit attributable to the owners of the parent company of RMB 146 million to RMB 175 million in 2024, and a net profit attributable to the owners of the parent company after deducting non-recurring gains and losses of RMB 80 million to RMB 109 million in 2024. This data, combined with the in-depth changes in the company's management carried out by Bloomage Biotech in the past year, shows that Bloomage Biotech's performance is currently under short-term pressure.

The year 2024 that has just passed is regarded as the "first year of change" by Bloomage Biotech itself. In this year, Bloomage Biotech still firmly chose the latter between high-speed development and high-quality development.

According to the announcement, in 2024, Bloomage Biotech will adhere to and continue to implement management reform and promote the implementation of management reform projects. However, due to the upgrading of the organizational structure of the management change, the reform of the salary system, the expenses incurred by the consulting company and the equity incentive of more than 70 million yuan, the management change has brought a certain short-term cost rise for the company, but from the perspective of long-term development, this expenditure is also laying a solid foundation for the company's subsequent development.

In the face of such a world-renowned biotechnology company, the market has had mixed reactions to Bloomage Biotech's transformation results, but in the author's opinion, Bloomage Biotech's self-transformation has already had successful business model experience to follow, according to the announcement, the medical terminal business will still maintain rapid growth in 2024, which is undoubtedly a very convincing example.

Self-transformation and take the initiative to "step on the brakes" on the medical aesthetic business

As one of the company's four major business segments, the medical terminal business has always represented the business height of Bloomage Biotech, especially in the fiercely competitive and ever-changing medical aesthetic industry, Bloomage Biotech is undoubtedly a high-profile existence. Just when the medical cosmetology industry is in the wave of rapid development and the demand for the medical cosmetology market is also showing explosive growth, Zhao Yan, president and CEO of Bloomage Biotech, did not chase the hot spots in the market, but saw the problems within the business in a forward-looking manner, took the initiative to step on the "brake" of the medical cosmetology business, implemented a drastic and comprehensive reform of the medical cosmetology business, focused on the future, and carried out the strategic layout of the medical cosmetology business field with the end in mind.

In order to make the medical aesthetic industry out of a healthy development path, "I put a foot on the brakes on them (the medical aesthetic business) from the second half of 2021 in June, and then sorted out our internals. Let them improve their quality and cultivate their internal strength. ”

At that time, Zhao Yan mentioned three steps for the next step of medical cosmetology: first, we need to sort out how to go about the medical cosmetology strategy and what are the strategic goals? Second, in what form should the company's people and organizations undertake our strategy? Third, we need to sort out the advantages of the entire Bloomage Biotech products, follow the trend of short-term benefits or give full play to our value as a technology company and an innovation-driven company, what can we bring to the industry, or simply just to make money?

Based on the above statement, Bloomage Biotech spent two years to completely rectify the medical aesthetic business of the company's medical terminals.

Two years passed quickly, and the reformed Bloomage Biomedical Aesthetic Business also handed over its own performance answers, showing a sustained high growth trend for two consecutive years. According to the data, in 2023, Bloomage Biotech's overall medical terminal business will achieve revenue of 1.090 billion yuan, a year-on-year increase of 58.95%. Among them, the revenue of skin medical products was 747 million yuan, a significant increase of 60.29% year-on-year. Its revenue from "Micro-cross-linked Runzhi Doll Needle" increased by more than 200% year-on-year, and the revenue of Runzhi filler increased by more than 250% year-on-year; In the first half of 2024, the revenue of Bloomage Biomedical's terminal business will reach 743 million yuan, achieving a rapid growth of 51.92%. Among them, the revenue of skin medical products was 555 million yuan, a year-on-year increase of 70.14%, and the revenue of its differentiated and advantageous category micro-cross-linked Runzhi doll needle increased by more than 200% year-on-year.

It can be seen that the medical cosmetology business after the reform has achieved remarkable results and is regarded as a business model for the company to successfully implement the reform, and the announcement shows that other business segments of Bloomage Biotech, such as the skin care products sector, are also following the path of change in the medical cosmetology business and carrying out self-transformation and adjustment.

Adhere to the differentiation strategy and build a complete product system

The high increase in performance data must fall on the correct layout of each step of the company's business logic. According to the data of Bloomage Biotech's 2024 semi-annual report, while the company's medical aesthetic business has steadily increased its sales revenue, the expense ratio has also decreased steadily, and the quality of operation has gradually improved.

It is not difficult to imagine that the reason why the medical aesthetic business can quickly achieve a strong breakthrough is closely related to the in-depth layout of Bloomage Biotech in this business field under the curtain of change.

Bloomage Biomedical's aesthetic business continues to improve its product system in the midst of change, focusing on facial rejuvenation, focusing on creating layered anti-aging aesthetics, and is committed to providing one-stop overall solutions for beauty seekers.

At the product level, Bloomage Biotech adheres to the product family, continues to focus on and dig deep into the differentiated advantages of its own products, and builds a complete product system. For example, with the concept of layered anti-aging, Runzhi, the core brand of medical beauty, has successively launched a number of matrix products for different skin levels - Runzhi Natrual, No. 2, No. 3 and No. 5, as well as the product of Weijiao League for skin rejuvenation and long-term solution - Runzhi Doll Needle, and at the same time, Runzhi Zhenhuo is marketed with postoperative skin care. In addition, Bloomage Biomedical's aesthetic products also meet the diversified needs of the whole cycle of postoperative care through the "mechanical + makeup" multi-product series matrix, and improve customer and consumer satisfaction.

In terms of marketing and marketing, Bloomage Biotech adheres to the high level of medicine, cooperates with external experts to establish a unified system of hierarchical anti-aging and contour aesthetics theory, and at the same time focuses on medical delivery with a joint professional platform, linking more than 2,000 external doctors during the reporting period.

At the level of channel operation, Bloomage Biomedical's medical aesthetic sector is also continuing to strengthen the coverage of medical aesthetic institutions. According to the data, during the reporting period, the coverage rate of Bloomage biomedical aesthetic institutions and the number of single-institution cooperative products have increased significantly, of which the coverage rate of medical aesthetic institutions has increased by more than 50% year-on-year.

With the research and development of science and technology, it was approved as China's second Class III certificate for composite solution machinery

A securities research report pointed out that the continuous increase in the penetration rate of beauty care projects is due to the fact that in the medical cosmetology industry chain, from upstream raw material suppliers to downstream product manufacturers, they are actively carrying out innovative research and development, and continue to promote the launch of new products in the medical cosmetology industry. Bloomage Biomedical's aesthetic business is in line with this industry development trend, and the R&D of pharmaceutical and medical devices has continuously strengthened material application research and process innovation to promote the emergence of safer and more effective pharmaceutical and medical device end products. According to the 2024 semi-annual report, Bloomage Biotech has 96 projects under research and has obtained 5 Class II medical device registration certificates in China, covering a variety of medical device products such as recombinant collagen wound dressings, recombinant collagen wound dressings and scar repair silicone gels, and has obtained 7 medical device registration certificates internationally.

2024 is also the 12th anniversary of Bloomage Biomedical's medical aesthetic business, and in July 2024, Bloomage Biotech's Class III medical device "Sodium Hyaluronate Composite Solution for Injection" (trade name: Runzhi Gege) was approved for marketing by the National Medical Products Administration (NMPA), which is the second Class III certificate for compound solution devices in China, breaking the long-term monopoly in the industry and promoting the process of industry compliance development.

In terms of medical cosmetology terminal products, the preview shows that in 2024, Runzhi, a medical cosmetology brand under Bloomage Biotech, will launch two new medical cosmetology injections, namely "Runzhi Gege" (sodium hyaluronate composite solution for injection) and "Runzhi Feiran" (cross-linked sodium hyaluronate gel for injection); At the same time, through endogenous and epitaxial methods, the company has accelerated the promotion of various medical aesthetic pipelines, and the company's product line has been greatly enriched.

Strategic upgrade Bloomage Biotech has in-depth research on "cell biology".

As a biotechnology company driven by synthetic biotechnology innovation and a platform company for the whole industry chain of biomaterials, Bloomage Biotech has also ushered in the third strategic upgrade. Starting from the basic research of biology, the company focuses on the two basic disciplines of glycobiology and cell biology, and relies on the industrial transformation advantages in the field of synthetic biology to provide scientific solutions for life and health. Starting from the upstream research and development of biomaterials, from raw material production to brand building, a path for the full-link transformation of biomaterials was explored.

In the field of medical aesthetics, although various ingredients and materials are emerging one after another, hyaluronic acid has always been an indispensable core ingredient in this field. As an industry leader, Bloomage Biotech has taken the lead in realizing the large-scale and industrialized production of hyaluronic acid, continuously expanding its application field, and opening up a new "big world" for hyaluronic acid, a "small substance". At the same time, the research of hyaluronic acid has also opened up the exploration of the important impact of carbohydrate function in the field of life and health.

From polysaccharide substances such as hyaluronic acid to the entire glycobiology and glycobiology industry, Bloomage Biotech began to study the entire cell biology on this basis, and gradually established a holistic understanding of human health and aging. Bloomage Biotech began to enter the field of biotechnology from hyaluronic acid and inherited the research path of glycobiology. From the beginning, hyaluronic acid was thought to be a substance closely related to water, and it was considered to be a key substance to lock in moisture. However, in fact, hyaluronic acid, as an extracellular matrix, is a substance closely related to cell regulation, and related research has risen to the level of cell tissue.

Based on this research logic, Bloomage Biotech has raised hyaluronic acid to the level of cell tissue for research, broadened research resources, and penetrated into the field of cell biology, and is committed to understanding the mechanism of cells in metabolism, regulation of morphology, and motivation. In order to explore more possibilities of cell regulation, Bloomage Biotech uses synthetic biotechnology to drive research in order to obtain more substances.

Returning to the specific field of beauty and skin care, in Bloomage Biotech's view, the current beauty and skin care technology has developed from basic physical protection in the 1.0 era to repair and supplement in the 2.0 era, and has now advanced to the precise regulation of cells in the 3.0 era, and has penetrated into the body cell level. Based on this, compared with the problems of the surface layer of the skin, Bloomage Biotech wants to solve the underlying health problems of people's skin and the most fundamental health functions of the body in the future.

So what is the way to solve the root cause of people's health problems?

Bloomage Biotech also gave its own answer - precise regulation of cells through regenerative medicine.

According to research, with the continuous progress and development of technology, the functions of carbohydrate cell signaling and regulating signaling molecules have been widely used in the field of stem cells and regenerative medicine, which can affect the behavior of stem cells by regulating and controlling key signaling molecules.

Specifically, the technology has three main steps: first, adjust and optimize the microenvironment of cells, provide rich nutrients for cells, and stimulate the vitality of cells; the second is to regulate cell signals through active molecular targeted regulation technology, so as to achieve precise regulation and upgrading of cell functions; The third is to verify the regulatory effect to achieve the true expected efficacy at the cellular level.

At present, in the field of skin care products, Bloomage Biotech has released two innovative achievements of "precise cell regulation" of regenerative medicine - Runbaiyan BloomCell Nutrient Solution and Quadi's new generation of CT50 Cell Energy Solution, which have been successfully applied to "Runbaiyan Collagen Firming Cream" and "Quadi CT50 Anti-Collapse Cream" respectively.

It is believed that in the near future, Bloomage Biotech's high level of regenerative medicine technology will also radiate to the field of medical terminals, bringing groundbreaking innovation to the industry and bringing more healthy and sustainable products and services to more consumers, which is also the original intention of Bloomage Biotech has always adhered to.

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