Produced by Dharma Finance
After the National Day holiday, a number of listed companies have issued shareholder reduction announcements, Bloomage Biotech (688363. SH) is also among them.
On October 8, Bloomage Biotech announced that the company's shareholder China Life Chengda plans to reduce its total holdings of the company's shares by centralized bidding and block trading according to market conditions not exceeding 12.042 million shares, and the total number of shares to be reduced does not exceed 2.5% of the total share capital.
As of the disclosure date of the announcement, China Life Chengda directly held about 34.43 million shares of Bloomage Biotech, accounting for 7.15% of the company's total share capital. All of the above shares are pre-IPO shares of the Company and have been listed and circulated since November 7, 2022.
According to the closing price of the day, China Life Chengda can cash out 969 million yuan this time. However, since October 8, Bloomage Biotech's share price has continued to fall, and as of the close of trading on October 11, Bloomage Biotech's share price was 61.86 yuan per share. Compared with the stage high of 84.59 yuan / share on October 8, Bloomage Biotech's share price has fallen by 26.9%.
The market value has evaporated by 100 billion
The original shareholders have reduced their holdings
China Life Chengda is a big health industry equity investment fund led by China Life Group in 2016. The listed company Chinese Life holds 74.94% of its shares, China Life Group holds 16.65% of its shares, and China Life Property Insurance holds 8.33% of its shares.
China Life Chengda is the original shareholder of Bloomage Biotech and acquired the shares before the IPO. In February 2019, China Life Chengda invested 1.2 billion yuan to acquire 34.43 million yuan of capital contribution from Hong Kong Qinxin at a price of 34.85 yuan per capital contribution from Hong Kong Qinxin. After Bloomage Biotech was changed to a joint-stock company, China Life Chengda held 34.43 million shares of it, which has been maintained to this day.
According to the latest closing price, the market value of China Life Chengda's shareholding in Bloomage Biotech is about 2.13 billion yuan. Excluding dividends, the floating profit of China Life Chengda's investment in Bloomage Biotech is about 930 million yuan.
In fact, the investment income obtained by China Life Chengda in Bloomage Biotech has been significantly withdrawn. Since Bloomage Biotech was listed under the name of "the first share of hyaluronic acid", driven by the centralized purchase of many funds, Bloomage Biotech's share price soared from the issue price of 47.79 yuan/share to a peak of 314.99 yuan/share in early July 2021.
However, as the original shareholder holding more than 5% of the shares, China Life Chengda has said that it will not sell its shares in the first 36 months after Bloomage Biotech goes public, so there is no actual opportunity to cash out when the stock price is high. The share price of Bloomage Biotech has also entered a downward range since then, and the current market value of Bloomage Biotech has evaporated more than 100 billion yuan, and the latest market value is less than 30 billion yuan.
Judging from the actions of China Life Chengda, the reduction of Bloomage Biotech at this time is not a temporary intention, since the fourth quarter of last year, China Life Chengda has successively reduced its holdings of shares in listed companies. In the fourth quarter of last year, China Life Chengda sold 1.462 million shares of Preh Ophthalmology, and in the second quarter of this year, China Life Chengda sold another 574,000 shares of United Imaging Medical.
As of the end of June, in addition to Bloomage Biotech, China Life Chengda also held 7 stocks in the A-share market, including United Imaging Medical, Nuovezan, Jiahe Mecan, Aopumai, Shanda Diwei, Maipu Medical, and Preh Ophthalmology. As of October 11, the total market value of China Life Chengda's holdings was about 4 billion yuan.
Not only China Life Chengda, but also other original shareholders of Bloomage Biotech, such as Yingrui Wuyuan, Arrow Medical, Huajie Medical, etc., have reduced their holdings and cashed out after the circulation of restricted shares. Among them, Yingrui Wuyuan has successively reduced its holdings many times, and after rough calculation, its cash amount exceeded 5 billion yuan, while the cost of Yingrui Wuyuan's stake in Bloomage Biotech was only 600 million yuan. As of the end of the second quarter, the above three shareholders have withdrawn from the list of the company's top 10 outstanding shareholders.
Skincare performance is under pressure
Net profit continued to decline
Bloomage Biotech started with hyaluronic acid raw materials and is positioned as a technology company that empowers the entire bioactive materials industry, focusing on the B-end market. Bloomage Biotech, which owns about 40% of the world's hyaluronic acid raw materials, successfully landed on the Science and Technology Innovation Board in November 2019, and its founder and chairman Zhao Yan is known as the "Queen of Hyaluronic Acid" in the industry.
After Bloomage Biotech went public, it began to gradually transform from the production of hyaluronic acid raw materials to the sales of functional skin care products at the C-end, and it has four major functional skin care product brands: Runbaiyan, Quadi, Mirepair and BM Muscle Active. From 2019 to 2021, the revenue of Bloomage Biotech's functional skin care business was 634 million yuan, 1.346 billion yuan and 3.319 billion yuan respectively, an increase of 119%, 112% and 147% year-on-year respectively, and the revenue growth rate exceeded 100% for three consecutive years.
As a hyaluronic acid raw material supplier, Bloomage Biotech naturally has a certain innate cost advantage, and it is reasonable to rely on its own conditions to carry out the layout of the whole industrial chain of hyaluronic acid products. Therefore, in the product line of Bloomage Biotech, from the 79 yuan per box of water muscle spring bottled water to the 1167 yuan Quadi essence products, all of them are deeply bound to hyaluronic acid.
It is precisely because of this deep binding that Bloomage Biotech has a great dependence on hyaluronic acid, and when consumers no longer pay for hyaluronic acid, the performance of the product line relying on hyaluronic acid has also declined.
According to public information, in the past ten years, the price of hyaluronic acid raw materials has been continuously reduced, with an average annual decline of about 5%, and the capacity has begun to be overcapacity, and as more and more players enter the hyaluronic acid market, industry competition is also intensifying.
After the decline of hyaluronic acid dividends, Bloomage Biotech handed over the worst report card since its listing. The annual report shows that in 2023, Bloomage Biotech will achieve operating income of 6.076 billion yuan, a year-on-year decrease of 4.45%; The net profit attributable to the parent company was 593 million yuan, a year-on-year decrease of 39%.
Entering 2024, Bloomage Biotech still has not been able to stop the pace of decline in performance. According to the semi-annual report data, in the first half of this year, Bloomage Biotech achieved operating income of 2.811 billion yuan, a year-on-year decrease of 8.61%; The net profit attributable to the parent company was 342 million yuan, a year-on-year decrease of nearly 20%.
At present, in addition to the functional skin care products business, Bloomage Biotech also has some raw material business, medical terminal business and functional food business. Among its various businesses, the functional skin care products business accounts for the heaviest revenue, accounting for 49.29% of the company's main business income, and is the core business of Bloomage Biotech.
The decline in Bloomage Biotech's performance is mainly due to the poor sales of its functional skin care products. Since last year, Bloomage Biotech's functional skin care business has shown signs of weakness. In the first half of this year, the company's functional skin care products business achieved revenue of 1.381 billion yuan, a year-on-year decrease of 29.74%. Moreover, in the semi-annual report, Bloomage Biotech rarely did not disclose the revenue details of its four major brands.
For the continuous decline of the functional skin care products business, Bloomage Biotech attributed it to "being in the deep water area of management change" in its 2024 semi-annual report. The company's main focus is on adjusting the team, sorting out the internal, reviewing the strategy, correcting the action, etc., which is inevitably affected by the short-term impact on the operating results.
While Bloomage Biotech's performance and stock price both declined, the net worth of Zhao Yan, the "Queen of Hyaluronic Acid", also shrank sharply. Zhao Yan holds a total of 58.88% of the shares of Bloomage Biotech, and according to the latest stock price, its market value is 17.5 billion yuan, which is more than 70 billion yuan lower than the previous high point of Bloomage Biotech.