Bloomage Biotechnology's "Worst" Semi-Annual Report in Recent Years - Is This a Signal for Bottom Recovery?
Six months after founder Zhao Yan returned to frontline operations, Bloomage Biotechnology Corporation Limited (688363.SH) posted a late-night article on August 29 titled "Chairman Returns to Frontline, Q2 Profits Hit Bottom and Rebound." However, the just-released 2025 semi-annual report shows Bloomage Biotechnology achieved revenue of 2.261 billion yuan, down 19.57% year-over-year; net profit attributable to shareholders of 221 million yuan, down 35.38%; non-GAAP net profit of 174 million yuan, down 45%; and operating cash flow of 218 million yuan, down 45%. This represents the company's worst mid-year performance in four years.
Meanwhile, GIANT BIOGENE (2367.HK), which recently lost in a public relations battle with Bloomage Biotechnology, delivered impressive financial results: first-half revenue reached 3.113 billion yuan, up 22.5% year-over-year; net profit of 1.182 billion yuan, up 20.6%. The first-half net profit margin reached a high of 38%.
Facing these dramatically different performance trends, investors have remained surprisingly calm. In the secondary market, Bloomage Biotechnology's stock price rose a cumulative 1.24% in the four trading days following the semi-annual report release. On September 1, Bloomage Biotechnology closed at 58.9 yuan per share, with a total market value of 28.4 billion yuan.
GIANT BIOGENE's stock price actually fell a cumulative 1.82% in the three trading days following its semi-annual report release, closing at HK$53.85 per share on September 1, with a total market value of HK$57.7 billion (approximately 52.8 billion yuan).
However, beneath the relatively calm surface of the capital markets, undercurrents are stirring.
"Bottom Recovery" or "Data Filter"?
This marks Zhao Yan's first report card since returning to frontline operations.
On March 3, Bloomage Biotechnology published the full text of Chairman Zhao Yan's speech at the president's office meeting, titled "Strict Organizational Governance, Return to Business Frontline, Return to Entrepreneurial State." Zhao Yan stated, "I will transition from primarily focusing on R&D work to frontline business operations, especially consumer goods business operations."
After returning to frontline operations, Zhao Yan began actively promoting the implementation of reform measures, making systematic adjustments to business philosophy, business direction, and talent organization models. Bloomage Biotechnology stated in its semi-annual report that these adjustments are still in early stages, with core initiatives including reconstructing brand communication models, focusing on high-barrier technology asset transformation, innovating organizational and talent systems, and building scientific communication systems.
From the company's 2025 semi-annual report, these measures appear to be gradually yielding results. On the evening of August 29, Bloomage Biotechnology also published an article titled "Understanding Bloomage Biotechnology's 2025 First-Half Performance at a Glance," claiming "Chairman returns to frontline, Q2 profits hit bottom and rebound."
Specifically, before the maturation of market communication models adapted to the company's brand characteristics, Bloomage Biotechnology significantly reduced marketing activities centered solely on sales targets, cut outsourced activities lacking intrinsic strategic thinking, and shifted brand communication from "scale-oriented" to "efficiency-oriented." Consequently, the company's second-quarter sales expense ratio decreased by 12.46 percentage points, and the first-half 2025 sales expense ratio decreased by 6.19 percentage points.
Simultaneously, while collaborating with global universities, research institutions, and pharmaceutical companies, Bloomage Biotechnology significantly reduced brand incubation plans without clear technical support, strengthening the deep integration between technological achievements and consumer goods business. In 2025, the company's R&D projects decreased by 88 compared to 2024, with R&D investment mainly concentrated in raw materials and medical terminal business. It's expected that with focused R&D projects, R&D expenses and efficiency will be further optimized.
In talent selection, Bloomage Biotechnology completely abandoned the external "professional operator" model, focusing on selecting and cultivating entrepreneurial talent with technological passion, alignment with company values, and leadership qualities for management positions. However, it's worth noting that in the first half, Bloomage Biotechnology incurred approximately 29 million yuan in management expenses due to organizational structure upgrades, impacting short-term earnings.
Regarding communication, Bloomage Biotechnology stated in its semi-annual report that the company resolutely speaks out against unscientific rhetoric in the industry, particularly launching decisive counterattacks against the "hyaluronic acid is outdated theory." This directly led to the public relations battle between Bloomage Biotechnology and GIANT BIOGENE.
However, Bloomage Biotechnology's late-night praise for Zhao Yan's return effectiveness creates a subtle contrast with the semi-annual report showing declining revenue and net profit.
Market skeptics question whether Bloomage Biotechnology's reforms are "all talk, little action." Some believe that the company's public posts are actually carefully designed "data filters" by the brand PR department, attempting to use single-quarter partial improvements to mask overall first-half decline, replacing business logic with personal narrative, revealing excessive "deification" of Chairman Zhao Yan.
Moreover, while the company's second-quarter net profit showed signs of recovery, net profit was only 119 million yuan. Compared to 180 million yuan in Q2 2023, this still represents a 34% gap, and compared to 210 million yuan in Q2 2022, a 43% decline.
Some readers commented that they heard from friends at Bloomage Biotechnology that during a Friday meeting on the 29th, CEO Zhao was reportedly furious and severely criticized the PR department, leading to emergency promotion of financial report positives. However, this claim has not been verified by other Bloomage Biotechnology personnel.
Bloomage Biotechnology Under Pressure vs GIANT BIOGENE's Double-Digit Growth
Behind the performance pressure lies declining revenue across Bloomage Biotechnology's three major business segments.
Specifically, in the first half, the company's raw materials business, medical terminal business, and dermatological science innovation transformation business accounted for 27.7%, 29.77%, and 40.36% of revenue respectively, with the three business segments totaling 97.83% of total company revenue.
However, in the first half of 2025, the company's raw materials business achieved revenue of 626 million yuan, down 0.58% year-over-year; medical terminal business revenue of 673 million yuan, down 9.44%; and dermatological science innovation transformation business revenue of 912 million yuan, down 33.97%.
Bloomage Biotechnology stated in its semi-annual report that the company's first-half performance decline was mainly due to the year-over-year decrease in dermatological science innovation transformation business revenue. However, the company will continue to persist in technological innovation, promote the application of synthetic biology technology in more fields, while optimizing business structure and improving operational efficiency to ultimately achieve high-quality development goals.
In stark contrast to Bloomage Biotechnology's difficulties, GIANT BIOGENE continued high growth in the first half of 2025. Although growth rates decreased compared to the same period last year, multiple metrics including revenue, net profit, and gross profit all achieved double-digit growth, with growth rates reaching 22.5%, 20.6%, and 21.5% respectively. Its net profit of 1.182 billion yuan reached nearly 5.35 times that of Bloomage Biotechnology.
Despite Bloomage Biotechnology's overall poor first-half performance, the company showed some positive signs in the second quarter. In Q2 2025, company revenue was 1.183 billion yuan, down 18.44% year-over-year; but net profit attributable to shareholders was 119 million yuan, up 20.89%; non-GAAP net profit was 92 million yuan, up 8.75%. Bloomage Biotechnology's second-quarter net profit margin increased for the first time since Q1 2024.
Profitability improvement mainly came from significant sales expense reduction and operational efficiency improvement. In the first half of 2025, Bloomage Biotechnology's sales expenses were 808 million yuan, down 31.44% year-over-year. The sales expense ratio fell to 35.74%, a significant decrease of 6.19 percentage points compared to the same period last year, reaching the lowest level in five years.
The main reduction item was channel and promotional expenses, decreasing from 627 million yuan in the same period last year to 393 million yuan in the first half of this year, a reduction of over 37%.
Everbright Securities stated in its research report that Bloomage Biotechnology's second-quarter profit inflection point has emerged, expressing optimism about the company's future earnings elasticity release when revenue returns to positive growth, maintaining a "Buy" rating. However, considering that the company's functional skincare business is still in a phase of adjustment, they downgraded Bloomage Biotechnology's 2025-2027 revenue forecasts.
Lost in Financials, Won in "Public Opinion War"
Before the semi-annual report release, Bloomage Biotechnology had just experienced a series of turbulence: from internal reorganization at the beginning of the year, to public debates in May with multiple securities firms and GIANT BIOGENE over the "hyaluronic acid is inferior to recombinant collagen" viewpoint, to real-name accusations by former employees in July followed by counterattacks.
The "public opinion war" with GIANT BIOGENE lasted a month and ultimately ended in victory.
Specifically, on the evening of May 17, Bloomage Biotechnology's official WeChat public account published "Concepts Always Repeat, Technology Always Advances," criticizing multiple securities firms for supporting GIANT BIOGENE, the "first recombinant collagen stock in Hong Kong."
Bloomage Biotechnology pointed out that starting in 2022, as capital markets continuously pursued new company themes, the recombinant collagen concept was seemingly fortunately selected. To create expectations larger than the hyaluronic acid industry, research reports surrounding a certain recombinant collagen company contained numerous so-called "comparative studies" directly targeting China's hyaluronic acid industry.
In the open letter, Bloomage Biotechnology directly quoted comments from four securities firms on hyaluronic acid and collagen, listing reports from 10 securities firms including CINDA Securities, Ping An Securities, Founder Securities, and Guojin Securities targeting the medical beauty industry and GIANT BIOGENE.
In 2021, Zhao Yan ranked among the top ten on the Hurun Rich List of Women Entrepreneurs with wealth of 56.5 billion yuan, becoming "Shandong's richest woman" and being called the "Hyaluronic Acid Queen." GIANT BIOGENE founder Fan Daidi also successfully topped "Shaanxi's new richest person" this year with wealth exceeding 45 billion yuan, being praised as the "Collagen Queen."
The collision between these two "richest women" quickly attracted external attention. On May 24, the battle escalated: internet celebrity blogger "Dr. Big Mouth" Hao Yu, who holds a chemistry PhD from the University of Hong Kong, released a video questioning that GIANT BIOGENE's Kefu Mei collagen products had total amino acid content of only 0.0177%, with glycine "not detected." Media subsequently revealed that Shanghai Liuye Medical Creation Medical Technology Service Co., Ltd., with Hao Yu as legal representative, was jointly invested by Hainan Haixi Private Equity Investment Fund (participated by Bloomage Biotechnology) and Dr. Hao Yu's related companies.
However, this didn't affect Bloomage Biotechnology's fighting spirit. After Dr. Big Mouth was silenced, on June 14, Bloomage Biotechnology published "Rumors and Truth About Hyaluronic Acid and Recombinant Collagen" on its public account, providing detailed answers to questions of concern to media and shareholders.
This "medical beauty giant battle" ultimately ended with the "Collagen Queen's" surrender. On the evening of June 23, GIANT BIOGENE acknowledged on its official WeChat public account: "Our company's existing quality standards, testing methods, and label markings have gradually shown limitations in certain aspects, making it difficult to fully adapt to the high standards and requirements of industry development and technological progress."
"Fighting" R&D - Can It Rebound?
Consumer medical industry analyst Zhang Congwen told Beijing Business Today that Bloomage Biotechnology's reform measures have not yet fully shown results. On one hand, channel and brand adjustments in the dermatological science business are still in a transition phase; on the other hand, there's a gap period in the transformation between old and new growth drivers, with traditional hyaluronic acid markets shrinking while new emerging fields haven't established solid barriers, and R&D investments haven't effectively converted into market competitiveness.
However, Bloomage Biotechnology continues to "fight" in R&D. In the first half, Bloomage Biotechnology's total R&D investment reached 231 million yuan, accounting for 10.22% of operating revenue, an increase of 3.09 percentage points from 7.13% in the same period last year.
Meanwhile, competitor GIANT BIOGENE's first-half R&D spending was 41.2 million yuan, down 15.5% year-over-year, with R&D expense ratio falling from 1.9% in the same period last year to 1.3%. The company explained that "this decrease was mainly due to some R&D projects entering the achievement transformation phase and reduced share-based compensation related expenses."
Simultaneously, Bloomage Biotechnology's R&D personnel numbers also increased significantly. In the first half of 2025, Bloomage Biotechnology's R&D team totaled 902 people, an increase of 35 from the same period last year; R&D personnel as a proportion of total company headcount was 23.37%, an increase of 3.74 percentage points from 19.63% in the same period last year.
However, the company's first-half R&D personnel compensation decreased by 4.3471 million yuan compared to the same period last year, with average R&D personnel compensation of 96,300 yuan, down 8.46% year-over-year, representing an average monthly salary of approximately 8,025 yuan.
As of June 30, Bloomage Biotechnology had applied for 1,081 patents (including 855 invention patents), of which 632 patents had been granted (including 406 Chinese invention patents and 19 foreign invention patents). Newly obtained invention patents focused on basic research and applied basic research of two major categories of bioactive substances: functional sugars and amino acids.
Now, with Zhao Yan back at the helm and significant marketing investment cuts, can Bloomage Biotechnology achieve a rebound through R&D-driven growth? Under pressure from competitors like GIANT BIOGENE and Jinbo Bio, what trump card products will Bloomage Biotechnology rely on to occupy an irreplaceable industry position in fierce competition? This remains to be seen.
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