Is the beauty business becoming increasingly difficult? On the evening of August 18, medical aesthetics leader Imeik Technology Development Co.,Ltd. released its 2025 interim report. In the first half of the year, Imeik Technology achieved operating revenue of 1.299 billion yuan, down 21.59% year-on-year; net profit attributable to shareholders reached 789 million yuan, declining 29.57% year-on-year; adjusted net profit attributable to shareholders was 722 million yuan, down 33.7% year-on-year; net cash flow from operating activities totaled 655 million yuan, plummeting 43.06% year-on-year. Looking at the second quarter alone, Imeik Technology's revenue fell 25.11% year-on-year, while net profit attributable to shareholders dropped 41.75% year-on-year. The second quarter performance continued its downward trajectory. Imeik Technology announced an interim dividend distribution of 12 yuan in cash per 10 shares, totaling 362 million yuan in cash dividends.
**Inventory and Accounts Receivable Both Hit Record Highs**
Imeik Technology is one of the three giants in the medical aesthetics industry, with its main business focusing on biomedical materials, particularly hyaluronic acid and related products. Early data showed that Imeik Technology ranked first in China's hyaluronic acid filler market with a 39.2% volume share and second in sales value with a 21.3% share, leading among domestic brands.
In the first half of this year, both Imeik Technology's solution-type injection products and gel-type injection products saw revenue declines exceeding 20%. Alongside declining operating performance, Imeik Technology's accounts receivable reached a record high. By the end of June, accounts receivable reached 213 million yuan, up 26.79% from year-end. Additionally, inventory at the end of June totaled 82 million yuan, also hitting a record high.
The simultaneous record highs in both accounts receivable and inventory not only indicate that Imeik Technology faced product sales difficulties in the first half of the year, but also suggest that performance has not yet bottomed out and will require time to "clear out."
**Strategic Acquisition Faces Massive Compensation Claims**
Declining performance is not a challenge unique to Imeik Technology, as the entire medical aesthetics industry is currently experiencing a downturn. Another industry giant, Bloomage BioTechnology, has seen declining performance for two consecutive years, with its first-quarter net profit attributable to shareholders continuing to fall 58.13% year-on-year, representing an even more severe adjustment than Imeik Technology's.
While Bloomage BioTechnology has adopted organizational restructuring and marketing expense reduction to address challenges, Imeik Technology has pursued strategic acquisitions to find new growth opportunities. In March this year, Imeik Technology announced that its controlling subsidiary, Imeik International, acquired an 85% stake in Korean company REGEN for $190 million, obtaining production and operating rights for "rejuvenation needles."
According to disclosures, REGEN is the first Korean company and third globally to obtain registration certificates for polylactic acid dermal fillers. Its approved products mainly include AestheFill and PowerFill, both containing PDLLA microspheres and sodium carboxymethyl cellulose as main components. AestheFill is primarily applied to facial areas, while PowerFill is mainly used for body applications.
Public information shows that polylactic acid facial fillers, also known as "rejuvenation needles," are dermal tissue fillers that repair appearance and correct contours to fill grooves and wrinkles. Unlike the physical filling of hyaluronic acid, "rejuvenation needles" offer more lasting, natural effects with higher safety.
Imeik Technology disclosed in its interim report that REGEN's AestheFill creates synergy with the company's existing gel-type regenerative product Renuva Angel, supplementing the regenerative product portfolio. While Imeik Technology has completed the consolidation of REGEN, this acquisition still faces complications.
As early as 2022, REGEN had signed an agreement with Dartor Medical, a subsidiary of Jiangsu Wuzhong Holdings, granting the latter exclusive distribution rights for AestheFill-related products in mainland China through August 28, 2032. Jiangsu Wuzhong's announcement stated that the exclusive agency rights face no legal or factual obstacles, with no risk of cancellation or termination during the agreement's validity period.
After completing the REGEN acquisition, REGEN sent a termination notice to Jiangsu Wuzhong, citing Dartor Medical's breach of agreement terms and administrative penalties against related Jiangsu Wuzhong personnel as grounds for revoking Dartor Medical's exclusive mainland China distribution authorization. Currently, Dartor Medical has filed for arbitration with the Shenzhen Court of International Arbitration and the case has been accepted. Dartor Medical's arbitration request seeks confirmation that the "exclusive agency agreement" remains valid and should continue to be performed, with preliminary compensation claims of 1.6 billion yuan if otherwise.
By the end of June, Imeik Technology's cash holdings (including transactional financial assets) totaled 3.031 billion yuan, down 1.362 billion yuan from the end of 2024, representing a decline of over 30% in just six months. If Dartor Medical's compensation claims are upheld, Imeik Technology's cash reserves would fall below 1.5 billion yuan.
Despite declining performance, Imeik Technology has not reduced R&D investment. In the first half of the year, the company's R&D expenditure reached 1.566 billion yuan, up 24.47% year-on-year, setting a new record for the period. Research projects include traditional medical aesthetics products as well as weight-loss products like semaglutide and deoxycholic acid, plus minoxidil hair regeneration products.
Facing the medical aesthetics industry downturn, Imeik Technology is working to expand into new markets.
The content and views in this article are for reference only and do not constitute investment advice. Investment involves risks, and decisions should be made with caution.
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