Bloomage Biotech at the bottom welcomes a 10-billion-yuan lifting of the ban.

Zebra Consumer Chen Biting

After waiting for 5 years, the "Hyaluronic Acid Queen" Zhao Yan finally witnessed the lifting of the trading restrictions on her shares of Bloomage Biotech.

However, as the company's performance continues to decline, its stock price has plummeted from its peak to a low. Over three years, its market capitalization has shrunk from 140 billion yuan to the current 28.6 billion yuan, with billions in market value vanishing into thin air.

What does the lifting of trading restrictions on nearly 17 billion yuan worth of shares held by the controlling shareholder mean for Bloomage Biotech?

The second-largest shareholder, China Life Chengda, seems unwilling to wait any longer and has already disclosed its plan to reduce its holdings.

Billion-Yuan Lifting of Restrictions

At 58 years old, Zhao Yan, known as the "Hyaluronic Acid Queen," often appears in public with her signature mid-length hair and twin ponytails.

In 2019, with the listing of Bloomage Biotech (688363.SH), her story became a celebrated business legend in the capital markets.

Early in her career, after graduating with a degree in biology from East China Normal University, Zhao Yan stayed on as a teaching assistant. Unsettled by the stability of academia, she ventured into business at 23, joining the gold rush in Hainan. Through trade and apparel businesses, she earned her first pot of gold before moving to Beijing to enter the real estate industry.

Many may not know that the famous Beijing Wukesong Stadium is one of Zhao Yan's assets.

In 2000, by chance, Zhao Yan came into contact with Freda Biopharm, a struggling hyaluronic acid manufacturer at the time.

With her background in biology, Zhao Yan deeply understood the claim that "one hyaluronic acid molecule can lock 1,000 water molecules." She foresaw the enormous market potential if hyaluronic acid were widely used in cosmetics.

She decisively invested 12 million yuan to become the controlling shareholder of Freda Biopharm, the predecessor of Bloomage Biotech.

Under Zhao Yan's leadership, the company quickly turned around, becoming the world's largest producer of hyaluronic acid raw materials.

With Bloomage Biotech's listing, Zhao Yan's wealth skyrocketed. As of now, her indirectly controlled Huaxi Xinyu holds 284 million shares of the listed company, accounting for 58.86% of the total shares.

After enduring a 60-month lock-up period, on November 6, Huaxi Xinyu's shares in Bloomage Biotech will be fully released for trading. Based on the closing price of 59.36 yuan per share on November 4, these shares are worth 16.8 billion yuan.

Currently, there are no clear signs that Zhao Yan intends to reduce her holdings in Bloomage Biotech.

The Second-Largest Shareholder Won't Wait

However, China Life Chengda has no plans to hold on any longer.

China Life Chengda holds 34.43 million shares of Bloomage Biotech, accounting for 7.15% of the total shares, making it the second-largest shareholder after Huaxi Xinyu and the largest tradable shareholder.

In February 2019, China Life Chengda entered by acquiring shares at 34.85 yuan per share for a total of 1.2 billion yuan, valuing Bloomage Biotech at 15 billion yuan post-investment. China Life Chengda is backed by China Life Insurance.

After three years of waiting, on November 7, 2022, China Life Chengda's shares were released for trading. Despite Bloomage Biotech's stock price remaining above 100 yuan for a long time, China Life Chengda showed no intention to sell, possibly waiting for another peak.

However, things did not go as planned. Since 2023, Bloomage Biotech's stock price has trended significantly downward, repeatedly hitting new lows. On September 18 this year, it even touched a historic low of 44.72 yuan per share.

At this point, China Life Chengda could no longer hold back. On October 9, it disclosed plans to reduce its holdings by up to 12.04 million shares, or 2.5% of the total shares, through block trades or centralized bidding between October 31, 2024, and January 28, 2025.

At the current stock price, China Life Chengda's planned reduction is worth approximately 700 million yuan.

Compared to China Life Chengda, Winreal Source's investment in Bloomage Biotech has been highly profitable.

In June 2018, Winreal Source invested 600 million yuan to acquire 33.09 million shares of Bloomage Biotech at 18.13 yuan per share, becoming the third-largest shareholder post-listing with a 6.89% stake.

In November 2020, Winreal Source's shares were released, and it quickly began reducing its holdings. From December 24, 2020, to February 22, 2021, it sold 8.64 million shares at 142.19–203.90 yuan, cashing out 1.524 billion yuan. From June 29 to July 16, 2021, it sold another 4.8 million shares at 264.366–314.278 yuan, cashing out 1.38 billion yuan.

Subsequently, Winreal Source continued to reduce its holdings intensively, disappearing from Bloomage Biotech's top ten shareholder list by the end of 2021.

Sharp Decline in Performance

From a hyaluronic acid raw material supplier to a product developer, Bloomage Biotech has undergone multiple iterations in its business focus amid fierce market competition, leveraging its core advantage in hyaluronic acid.

Around 2017, the company rapidly expanded into the C-end market, launching its own brands of functional skincare and functional food products to engage directly with consumers.

Bloomage Biotech declared 2020 its "brand year," achieving rapid brand recognition through various campaigns, advertising, and collaborations with top influencers like Li Jiaqi. That year, the company spent 125 million yuan on advertising and 493 million yuan on online promotion services. Its functional skincare business generated 1.346 billion yuan in revenue, a 112.19% year-on-year increase, surpassing raw materials to become its largest revenue source.

In 2021 and 2022, Bloomage Biotech's functional skincare business maintained rapid growth, with revenues of 3.319 billion yuan and 4.607 billion yuan, respectively, contributing over 70% of total revenue. It built major skincare brands like Runbaiyan, Quadi, Mibelle, and BM Active, with Runbaiyan and Quadi each achieving annual sales of over 1 billion yuan.

Thanks to the explosive growth of its functional skincare business, Bloomage Biotech's performance was stellar.

From 2019 to 2022, the company's revenue grew from 1.886 billion yuan to 6.359 billion yuan, while net profit attributable to shareholders rose from 586 million yuan to 971 million yuan.

But in 2023, the situation took a sharp turn for the worse, abruptly ending Bloomage Biotech's growth story. That year, revenue fell 4.45% year-on-year, and net profit attributable to shareholders plunged 38.97%. Functional skincare revenue dropped to 3.757 billion yuan, 850 million yuan less than the previous year.

Reflecting on the sudden downturn, Bloomage Biotech cited external macroeconomic factors and internal organizational inefficiencies lagging behind business growth.

This year, the company's performance has not improved. In the first half, functional skincare revenue fell by another 585 million yuan year-on-year to 1.381 billion yuan.

In the first three quarters, revenue and net profit attributable to shareholders were 3.875 billion yuan and 362 million yuan, down 8.21% and 29.62% year-on-year, respectively. The third quarter was particularly brutal, with net profit attributable to shareholders plunging 77.44%.

At its peak, Bloomage Biotech was celebrated as the "King of Hyaluronic Acid." In July 2021, its stock price hit a historic high of 313.10 yuan (adjusted), with a market capitalization exceeding 140 billion yuan. As the stock price continues to decline, its market cap now stands at just 28.59 billion yuan (as of November 4 closing).