Worst performance in the past five years? Haohai Biological's net profit plummeted by 40.30%, and the merger game is not easy to play.

Wen | Medical Research Society

The performance reports of three leading companies in the medical aesthetics field have been released, and their development situations are quite different.

Huaxi Biological is taking the “revenue reduction and profit increase” counterattack path. In 2025, its total operating revenue is 4.217 billion yuan, down 21.49% year-on-year, while net profit attributable to the parent increased by 67.03% year-on-year. The company is stabilizing its operations through cost reduction and efficiency improvement.

Jinbo Biological, on the other hand, is a typical “revenue growth but profit decline” case. Its annual revenue increased by 10.57% year-on-year, but net profit attributable to the parent decreased by 11.08%. The growth in R&D and marketing expenses has put pressure on profitability.

Although both face challenges, their performance is still considered “acceptable” compared to Haohai Sci & Tech. According to Haohai Sci & Tech’s performance quick report, in 2025, the company achieved approximately 2.473 billion yuan in revenue, down 8.33% year-on-year, with net profit attributable to the parent of about 251 million yuan, a sharp drop of 40.30%. After deducting non-recurring gains and losses, net profit was even down 57.67%.

Who would have thought that this industry leader, once holding key products in hyaluronic acid, ophthalmology, orthopedics, and other sectors, and highly anticipated by the market, would deliver its worst performance in nearly five years? So, why has this “jack of all trades” fallen into such a predicament?

Ophthalmology Business Collapsed? Frenzied “Buy, Buy, Buy” Fails to Meet Expectations

Faced with poor performance, Haohai Sci & Tech attributes part of the reason to its ophthalmology business in its performance quick report: its subsidiary, Shenzhen New Industry Ophthalmic New Technology Co., Ltd. (hereinafter “Shenzhen New Industry”), which manages the imported U.S. Lenstec brand intraocular lenses, is under significant operational pressure.

On one hand, the total number of cataract surgeries in China in 2025 decreased compared to 2024, reflecting a decline in overall market demand; on the other hand, the number of competitors increased, especially with domestic crystalline lens products that leverage significant cost and price advantages, posing greater challenges to imported brands. Sales prices and volumes of Lenstec products continued to decline in 2025, and Shenzhen New Industry’s operating profit fell short of expectations.

More concerning is that with the deepening implementation of DRG/DIP, some provinces have changed their medical insurance policies for cataract surgeries, restricting sales of standard spherical intraocular lenses. High-end intraocular lenses have high technical barriers; from R&D to mass production, long-term accumulation is required. Haohai Sci & Tech’s layout in this field has not yet formed enough competitiveness, making it difficult to offset the decline in mid- and low-end markets with high-end products.

Additionally, the impact of centralized procurement (集采) is still unfolding. In November 2023, Haohai Sci & Tech was selected for five brands of intraocular lenses and four brands of ophthalmic viscoelastic devices in the country’s first centralized procurement of medical consumables for intraocular lenses. This result has gradually been implemented since the first half of 2024, leading to a significant reduction in the sales prices of various intraocular lens models.

In its 2025 performance report, Haohai Sci & Tech also forecasts that in the second round of national centralized procurement for intraocular lenses in the first half of 2026, prices will continue to decline. Based on prudence, the company has recognized an impairment loss of about 140 million yuan on the goodwill of Shenzhen New Industry.

All these signs indicate that Haohai Sci & Tech’s growth strategy relying on acquisitions may have been a miscalculation.

Specifically, Haohai Sci & Tech’s rise is closely linked to its continuous M&A strategy: acquiring Jianhua Biological and Shengsheng Biological in 2007, taking over Henan Universe in 2015, acquiring Shenzhen New Industry, Zhuhai Aige, and U.S. Aaren in 2016, and acquiring Ouhua Meike and Shanghai Hengtai Vision in 2021. Over more than a decade, the company rapidly built up four major business segments: medical aesthetics, ophthalmology, orthopedics, and anti-adhesion/hemostasis through external expansion.

However, this rapid expansion also harbored many risks. Many acquired targets failed to meet expected returns and instead became performance drag.

According to Haohai Sci & Tech’s 2024 annual report, five subsidiaries—Likangrui, Aaren, Hengtai Vision, Henan Saimishi, and Hangzhou Aijinglun—showed varying degrees of losses. Likangrui and Aaren suffered significant losses, approximately 61.7065 million yuan and 34.4636 million yuan respectively, while Hengtai Vision, Henan Saimishi, and Hangzhou Aijinglun lost 15.491 million yuan, 11.7567 million yuan, and 8.0252 million yuan respectively.

The highly anticipated Shenzhen New Industry also failed to meet its performance commitments. According to agreements, from 2023 to 2025, its net profit should be no less than 39.6 million yuan, 59.1 million yuan, and 81 million yuan respectively. However, in 2024, its actual net profit was only 22 million yuan, less than half of the promised amount. The burden of low-efficiency assets, combined with the concentrated impairment of goodwill from acquisitions, directly eroded profits, plunging Haohai Sci & Tech into operational difficulties.

Of course, Haohai Sci & Tech still has opportunities for a turnaround. After all, acquisitions are a double-edged sword, and its diversified business segments remain its greatest advantage.

After Diversification, the Next Step Is “Bitter Medicine”

Relying on “buy, buy, buy,” Haohai Sci & Tech’s business spans four major fields: medical aesthetics, ophthalmology, orthopedics, and anti-adhesion/hemostasis. Undeniably, this “multi-point flowering” approach enhances risk resistance.

Moreover, from a market perspective, Haohai Sci & Tech has chosen “promising tracks.”

In terms of medical aesthetics, as residents’ per capita disposable income steadily increases, public acceptance of cosmetic procedures continues to rise. China has become the second-largest medical aesthetics market globally. According to a joint report by the Chinese Society of Plastic and Aesthetic Surgery, Allergan, and Deloitte Consulting, from 2022 to 2024, China’s medical aesthetics market is growing at a compound annual growth rate of about 10%-15%, and is expected to maintain a 10% CAGR in the future.

Additionally, China is one of the countries with the highest numbers of blind and visually impaired patients. Among vision impairment factors, cataracts account for 32.5%, and refractive errors for 44.2%. The incidence of ophthalmic diseases among highly myopic populations is much higher than among those with normal vision. In 2019, the global number of myopia patients reached about 1.4 billion, with over 600 million in China. The market capacity for myopia prevention and correction in China is substantial but still has low penetration.

In orthopedics, demand is also broad. Statistics show that the incidence of osteoarthritis in men over 65 is 58%, and in women 65%-67%; among those over 75, it reaches 80%. Currently, China has over 100 million osteoarthritis patients. Haohai Sci & Tech is the largest producer of joint cavity viscoelastic supplements in China. According to Punctuate Medical’s research, in 2024, the group has maintained the top market share in China’s intra-articular injection products for 11 consecutive years, reaching 44.43%.

However, the problem is that Haohai Sci & Tech’s diversified layout has not yet formed a solid “moat.” In the first half of 2025, most business segments showed decline: medical aesthetics down 9.31%, ophthalmology down 18.61%, orthopedics down 2.58%, with only anti-adhesion and hemostasis products showing revenue growth, but accounting for less than 10%.

This perhaps also reflects that, after spreading out, balancing and refining business development, establishing differentiated advantages, and increasing asset value are significant challenges. Especially during periods of significant demand changes, policy adjustments, and intense homogeneous competition, companies face even tougher internal growth challenges.

To improve operations, Haohai Sci & Tech has a long-term plan. Its 2025 semi-annual report states: “The group will continue to deepen internal resource allocation, further strengthen integration of acquired companies across R&D, production, sales, and service, to maximize synergy, improve operational efficiency, develop innovative technologies, and expand market space, enabling acquired companies to quickly integrate into the group’s management system and continuously enhance core competitiveness.”

It’s worth noting that the company’s acquisition activities have not stopped. In December 2025, Haohai Sci & Tech announced it plans to acquire a 19.8% stake in Ruiji Biological for 38.3515 million yuan using its own funds, entering the biomedical amniotic membrane segment. The biological amniotic membrane is a thin tissue derived from the inner layer of the placenta, with anti-inflammatory, repair-promoting, and scar-inhibiting properties. While promising, there are also significant uncertainties.

Ruiji Biological is not a particularly high-quality asset. Financial data shows that in 2024, it achieved revenue of 46.3567 million yuan but suffered a net loss of 11.7661 million yuan; in the first nine months of 2025, revenue was 46.0945 million yuan with a net loss of 11.2937 million yuan. Market concerns grow that this new acquisition could further increase Haohai Sci & Tech’s operational burden.

Many investors believe that now is not the time for Haohai Sci & Tech to continue expanding but to focus on “cutting away the diseased flesh.” Only by truly strengthening internal fundamentals and transforming its diversified layout from “superficial flowering” to “solid roots” can Haohai Sci & Tech hope to weather industry cycles and return to growth.