On March 19, Bloomage Biotech (688363. SH) issued an announcement on personnel changes, announcing in-depth structural adjustments to the company's senior management team, removing Liu Aihua, Xu Guixin and Luan Yizheng from the positions of deputy general managers, and appointing Wang Hui, the company's chief financial officer, and Xiang Maogong, executive director of the global supply chain platform, as the new deputy general managers.

The market has speculated whether this personnel change marks the official implementation of the "scraping bones and curing poison" organizational rectification action initiated by Zhao Yan, chairman of Bloomage Biotech, in early March.

Previously, Zhao Yan clearly asked "all corrupt personnel to surrender within a time limit" in her internal speech, and made the internal corruption problem of private enterprises public, which not only fired the first shot of independent anti-corruption of private enterprises in 2025, but also triggered many enterprises such as Sanbo Brain Science to follow suit, and the wave of anti-corruption of private enterprises has attracted the attention of the market.

Although it is not directly stated whether this personnel change is directly related to internal anti-corruption, according to the 2024 performance express report released by Bloomage Biotech not long ago, the company is currently facing a lot of pressure. According to the data, the company's annual revenue is expected to be 5.371 billion yuan, a year-on-year decrease of 11.6%; Net profit plummeted by 72.27%, leaving only 164 million yuan.

Management change and anti-corruption storm behind personnel turmoil

In fact, since 2024, Bloomage Biotech's senior management team has experienced an "earthquake". The core technical personnel Ma Shouwei and Wang Yongzhi have resigned one after another, and the chief scientist Guo Xueping has retired, which plays a pivotal role in the field of technology research and development of Bloomage Biotechnology, and their departure has undoubtedly brought a certain impact to the company's technology research and development strength.

In March this year, the three deputy general managers Liu Aihua, Xu Guixin, and Luan Yizheng were also adjusted out of the management. On the evening of March 19, Bloomage Biotech announced that Liu Aihua would no longer hold the position of deputy general manager or any position in the company because he exceeded the statutory retirement age; Xu Guixin and Luan Yizheng were transferred to vice presidents of business. In stark contrast, the company has introduced Wang Hui, chief financial officer, and Xiang Maogong, head of supply chain, as new vice presidents.

It is worth noting that not long ago, Chairman Zhao Yan used "scraping bones to cure poison" to describe the adjustment that will be carried out this year, which shows his determination. In her opinion, in the past, the company's management was relatively lax, which created a free working atmosphere to a certain extent, but also caused many problems. Corruption may be breeding in the dark, and some employees take advantage of their positions to seek personal gains, which damages the interests of the company; The problem of organizational rigidity has gradually become prominent, the communication and collaboration between departments are not smooth, and the work efficiency is low, which is undoubtedly a huge hidden danger for a biotechnology company that pursues innovation and efficiency. This personnel adjustment is to completely liquidate these historical problems and clear the obstacles for the company's future development.

Personnel redundancy, some departments have the phenomenon of overwork, employees work efficiently, but get high salaries; The process is cumbersome, and a simple matter may need to be approved by multiple departments and levels, which consumes a lot of time and energy; Lack of innovation, employees are accustomed to working on a regular basis, and lack the motivation and passion to innovate is undoubtedly a fatal weakness in the highly competitive biotech industry.

In response to this crisis, Zhao Yan acted decisively. She demanded that the corrupt personnel turn themselves in within a time limit, giving those who made mistakes a chance to turn over a new leaf, and at the same time showing all employees the company's firm determination to fight corruption.

Although it is not clear whether the changes of the three deputy general managers are linked to internal anti-corruption, it can be seen from the performance forecast released not long ago that the company is currently facing a lot of pressure.

Performance stalling: Functional skincare products are under pressure and in the throes of transformation

According to the 2024 performance forecast data released by Bloomage Biotech in February, the company expects to achieve annual operating income of 5.371 billion yuan, a year-on-year decrease of 11.6%; The net profit attributable to the parent company was 164 million yuan, a sharp decrease of 72.27% year-on-year, and the non-net profit was only 101 million yuan, a year-on-year decrease of 79.36%, the largest decline since listing. It is worth noting that the company's net loss in the fourth quarter was about 198 million yuan, which directly lowered the annual profit to the level of 2016.

The data comes from Bloomage Biotech's financial report

The year-end functional skincare business was undoubtedly the largest "drag bottle". Although the 2024 financial report does not disclose the specific data of this sector, it can be seen from the situation in 2023: the revenue of this business in that year was 3.757 billion yuan, a year-on-year decrease of 18.45%, accounting for 61.8% of the total revenue. Entering 2024, due to the intensification of market competition, the fading of traffic dividends and the impact of strategic adjustments, business adjustments will continue to deepen, and the proportion of revenue in the first three quarters has dropped to 49.13%, and the decline has not eased. The company admitted that the adjustment of this business segment involves multi-dimensional changes such as organizational structure, product system and talent training, and is expected to bottom out in 2025.

The market squeeze of competing products such as Bethany and Juzi Biotech has made Bloomage Biotech's functional skin care products business full of challenges. With its precise positioning in the sensitive skin market, Bethany's Winona brand has occupied a place in the market and is deeply loved by consumers. With recombinant collagen as the core, Juzi Biotech has created well-known brands such as Kefumei, which have risen rapidly in the market.

In the case of serious product homogenization, consumers' choices have become more diverse. They are no longer satisfied with the basic functions of the product, but pay more attention to the quality, effect and brand image of the product. If Bloomage Biotech cannot adjust its product strategy in time and enhance the competitiveness of its products, it will be difficult to stand out in the fierce market competition.

In the face of declining performance, Bloomage Biotech proposed a strategic transformation from "high-speed growth" to "high-quality growth". Although the raw materials business maintained steady growth, and the medical terminal business achieved rapid expansion with Runzhi's new products, it was not enough to offset the drag of the skin care segment. The company said that the current adjustment is a necessary stage of strategic upgrading, and it will lay a foundation for long-term development by optimizing the business structure, improving management efficiency and laying out emerging tracks. However, it will take time for the transformation to show results, and performance pressure is likely to persist in the short term.

The high marketing model has shrunk, and raw materials and medical treatment have begun to exert force

Looking back on the past five years, Bloomage Biotech's investment in marketing can be called "a lot of money". It jumped from 284 million yuan in 2018 to 3.049 billion yuan in 2022, with a compound annual growth rate of 73%, and the sales expense ratio climbed from 22.49% to 47.95%, and although it will drop to 2.842 billion yuan due to strategic adjustment in 2023, the proportion of revenue will still remain at a high level of 46.7%. Among them, online promotion expenses have always occupied a core position, reaching 1.722 billion yuan in 2022, accounting for 56.48% of the total sales expenses, far exceeding the industry average.

However, the over-reliance on live streaming and traffic delivery has led to high channel costs, and the lack of product homogeneity and brand differentiation has gradually made consumers' freshness of hyaluronic acid ingredients disappear and the marginal utility diminishing.

Some industry experts believe that Bloomage Biotech has not yet completed the transformation of thinking from "raw material supplier" to "brand owner". In the past, it entered the field of skin care products with the advantages of raw materials, but it failed to keep up with the pace of brand building, and the brand mentality construction lagged behind. Consumers remember hyaluronic acid, but they don't really remember the brand of Bloomage Biotech. Once the market competition intensifies, it is easy to fall into passivity.

In the first three quarters of 2024, Bloomage Biotech's sales expenses were 1.631 billion yuan, a decrease of 16.04% compared with the same period last year, but the proportion of revenue was still as high as 42.53%.

In the business map, the raw materials business will show competitiveness in 2024. In the first half of the year, the revenue of raw material business reached 630 million yuan, a year-on-year increase of 11.02%, and the proportion of exports exceeded 50% for the first time. This achievement marks the initial results of Bloomage Biotech's in-depth layout in the global market. The company has further strengthened its leadership position in the global hyaluronic acid market by continuously investing in R&D and developing new bioactives using synthetic biotechnology. However, the increasingly fierce competition in the international market and exchange rate fluctuations have also brought considerable challenges to the raw materials business.

The medical terminal business will become the growth highlight of Bloomage Biotech in 2024, with revenue of 743 million yuan in the first half of the year, a year-on-year increase of 51.92%. However, the strong regulatory nature of the medical aesthetic industry has brought compliance challenges to Bloomage Biotech. With the tightening of regulations, the product registration and approval process has become more stringent, and the requirements for market acumen and R&D strength have also increased.

In terms of long-term strategy, Bloomage Biotech is diversifying business risks and building a diversified business ecology through the "four-wheel drive" strategy. However, during the adjustment period of C-end business, how to maintain healthy cash flow and strengthen the technical moat of B-end is a major test of the management's strategic determination.

In the future, the expansion of the international market and the diversification of synthetic biology application scenarios may open up new growth space for Bloomage Biotech, but the future direction of Bloomage Biotech is worthy of the market's continued attention.