Huaxi creature (SH688363), which focuses on the C-end track.Hilltopbingo, share price 60Hilltopbingo.51 yuanHilltopbingo, market capitalization 291Hilltopbingo.4.6 billion yuan), due to the adjustment of the C-side business sector, which accounts for the largest proportion, pressed the pause button for performance growth in 2023.

On the evening of April 29th, the 2023 financial report released by Huaxi Biology showed that during the reporting period, the company achieved operating income of 6.076 billion yuan, down 4.45% from the same period last year; net profit from home was 593 million yuan, down 38.97% from the same period last year; and non-net profit from mother deduction was 490 million yuan, down 42.44% from the same period last year.

The Daily Business News reporter noted that Huaxi's performance has maintained a momentum of growth until 2023 since it landed on the board in 2019, but its net profit fell by nearly 40% year-on-year in 2023. Also let this global hyaluronic acid (also known as hyaluronic acid) leader, have to press the performance growth pause button.

Huaxi Biological mentioned in the financial report that the pressure on the company's rapid growth in 2023 was mainly due to the excessive business growth in the past, resulting in internal organization and management lagging behind the speed of business development, organization and management to be improved, and operational efficiency to be improved.

It is worth noting that since upgrading the business layout to four-wheel drive in 2021, the functional skincare business on the C-end track has played an important role in Huaxi's business composition, but it is also the most important factor affecting Huaxi's performance.

Data show that in 2023, Huaxi's bio-functional skin care business achieved revenue of 3.757 billion yuan, down 18.45% from the same period last year, accounting for 61.84% of the company's main business income.

In the previous performance forecast, Huaxi Biology mentioned that Huaxi Biology said that the company's four major brands of functional skin care products have begun to take shape after three or four years of rapid growth, and have achieved a leading position and certain market awareness in their respective subdivision tracks. However, there is still a long way to go from a large-scale brand to a real national brand. In view of this, during the reporting period, the company took the initiative to slow down its development, conduct a comprehensive review of the four major brands, conduct an in-depth examination of business health, and further cultivate and enhance key capabilities, including focusing on brand positioning, optimizing channel structure, strengthening large product strategy, digital operation, etc., constantly strengthening organizational capabilities, and improving fine operation and management capabilities.

However, the decline in the business of functional skin care products may make Huaxi temporarily lose the honor of having two "top 1 billion items".

In 2022, after the run Baiyan brand became the first "1 billion single" in 2021, Quadi became the second brand with an income of more than 1 billion yuan in Huaxi. In the 2023 financial report, although it is still mentioned that "focus on optimizing the category system with large items as the core and deepening brand value", Huaxi did not specifically disclose the sales data of each single product.

At the same time, the functional food business, which is also in the C-end track, is also in a downward trend, but this business does not account for a high proportion of Huaxi's total revenue. Data show that in 2023, the company's functional food business achieved revenue of 58 million yuan, down 22.53% from the same period last year.

Although the performance of the C-end business is not good, the B-end business has become the basic market of Huaxi. Financial data show that Huaxi's raw material business and medical terminal business still maintained steady growth in 2023, but they accounted for only 18.59% and 17.95% of the company's main revenue, but their year-on-year growth rates were 15.22% and 58.95%, respectively.