When a company's net profit plunges 74.69% yet still insists on distributing dividends exceeding its annual profit to shareholders, this scene is unfolding in the brutal "red ocean" competition of the vaccine industry.
On August 26, Walvax Biotechnology Co.,Ltd. delivered a dismal 2025 interim report: first-half revenue of only 1.154 billion yuan, down 19.47% year-on-year; net profit attributable to parent company of 43.16 million yuan, plummeting 74.69% year-on-year. More surprisingly, the company announced an interim dividend plan—0.30 yuan per 10 shares, totaling 47.98 million yuan, accounting for 111.17% of first-half net profit. This means the company not only distributed all its first-half profits but also tapped into previous years' accumulations.
Performance "Continues to Decline," Squeezed by Both Impairment and Bad Debts
Walvax Biotechnology's predicament didn't develop overnight. In 2023 and 2024, the company's revenue fell 19.12% and 31.41% respectively, with net profit declines as high as 42.44% and 66.10%. The downward trend continued in the first half of 2025.
Looking at batch release approvals, core product approvals were halved. First-half vaccine batch releases totaled only 7.62 million doses, compared to 13.84 million doses in the same period last year, a dramatic 44.91% drop, directly causing revenue decline.
The once-core bivalent HPV vaccine has become a "burden." In the second quarter alone, the company made impairment provisions of 76.30 million yuan for bivalent HPV vaccine-related intangible assets, becoming a key factor dragging down profits.
As of the end of June, the company's accounts receivable reached 2.366 billion yuan, accounting for 16.91% of total assets and equivalent to 205% of first-half revenue. The company made bad debt provisions of 61.55 million yuan in the second quarter, highlighting cash flow pressure.
Facing the industry winter, Walvax Biotechnology chose to "reduce expenditure." First-half R&D expenses were only 161 million yuan, down 48.53% year-on-year. Since the 2022 peak of 1.053 billion yuan, R&D investment has shrunk continuously (911 million in 2023, 700 million in 2024). R&D personnel decreased from a 2023 peak of 216 to 172 in 2024. Employee compensation in the first half of 2025 dropped sharply by 50% year-on-year, suggesting further workforce reductions.
Industry-Wide Winter: Life-or-Death Speed from Blue Ocean to Red Ocean
Walvax Biotechnology's predicament mirrors the entire vaccine industry: Walvax Biotechnology's first-half revenue was 844 million yuan with net loss of 144 million yuan, turning from profit to loss. Zhifei Biological's first-half revenue was 4.919 billion yuan with a massive net loss of 597 million yuan, plummeting 126.72% year-on-year.
Supply-demand reversal is the core logic of the industry winter. Category I vaccine "pie" shrinking: Sharp decline in newborns led to plummeting demand for national immunization program vaccines (such as hepatitis B, DPT), forcing companies into stock battles. Category II vaccine "red ocean" warfare: Companies flocked to self-paid vaccines (HPV, influenza, pneumonia, etc.), causing severe oversupply and triggering brutal price wars.
Once high-premium HPV vaccines have become typical examples of industry involution. Imported bivalent vaccines fell from 1,800 yuan per three-dose series to domestic bivalent vaccine price wars reaching 27.5 yuan per dose (Walvax Biotechnology), a drop exceeding 90%. Walvax's domestic nine-valent vaccine (499 yuan per dose) faced Merck's "buy-one-get-one-free" sniping strategy immediately upon launch, making market expansion difficult. Besides the six products already on the market, multiple companies including Sinovac and REC have HPV vaccines in Phase III clinical trials, with capacity set to explode further in the next two years.
Against the backdrop of completely reversed industry growth logic, Walvax Biotechnology's unusual dividend distribution may be aimed at maintaining market confidence, but it cannot mask the reality of its declining profitability. The vaccine industry's "golden age" has truly ended. From the windfall profits myth during COVID-19 to today's collective losses among leading companies and product price collapses, this winter caused by dramatic demographic changes and oversupply is far from over. When "survival" becomes the primary goal, strategic restructuring and transformation will be brutal challenges all players must face.
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