Bloomage released its mid-year financial report, reporting a revenue of RMB 2.811 billion (~USD 385 million) for the first half of the year. This success reflects the company's strategic transformation from a traditional raw materials supplier to a solution provider, which has driven significant growth across its raw materials and medical terminal products businesses.
Strong Performance in Raw Materials Business
Bloomage's raw materials segment continues to a core pillar of the company and demonstrate robust performance. In the first half of 2024, the raw materials business achieved a revenue of RMB 630 million (~USD 86 million), an increase of 11.02% year-on-year. Bolstered by its successful globalization strategy, Bloomage's export sales reached RMB 328 million (~USD 45 million), up by 19.30%. The overall gross profit margin for the raw materials business (excluding Forster) was 70.71%, an increase of 0.51% from the previous year. Notably, the gross profit margin for pharmaceutical-grade hyaluronic acid remained stable at 87.54%, positioning Bloomage among the highest in the industry and demonstrating its strong market competitiveness and profitability.
Strategic Shift to Solution Provider
Building on the solid foundation of its raw materials business, Bloomage is undergoing a strategic transformation from being primarily a raw material supplier to a solution provider. The company's raw materials have become an integral part of the product lines of many well-known pharmaceutical, personal care, and health food companies. Leveraging its advanced technological capabilities, Bloomage has accelerated the research and development of new raw materials.
The success of its strategic transformation is further reinforced by the increased sales of Bloomage's hyaluronic acid products and other bioactive substances. This shift marks Bloomage's steady progress from being a "hyaluronic acid leader" to a more diversified portfolio with diverse range of applications to cement its position as an industry leader in bioactive substance innovations.
Expanding Raw Material Offerings Through Advanced R&D
To support this strategic shift, Bloomage is significantly enhancing its research and development efforts. In addition to hyaluronic acid, the company is prioritizing six major categories of bioactive substances: functional sugars, proteins, peptides, amino acids, nucleotides, and natural active compounds. By actively investing in new raw material development and expanding its bioactive substance matrix, Bloomage aims to seize new market opportunities by offering a more comprehensive solutions to its customers.
Currently, Bloomage is engaged in 95 R&D projects. The company has made significant achievements, including successful pilot production of several innovative products, and the completion of pre-commercial trials for many others.
Accelerating Product Commercialization with advanced Pilot Platform
Bloomage has established a state-of-the-art pilot-scale testing platform, a key asset in accelerating the commercialization of new raw materials. The facility, spanning 30,000 square meters with 64 production lines, is designed to support the pilot and small-scale commercial production of various bioactive raw materials, including pharmaceutical, skincare, and food-grade products. Its flexibility enable efficient switching between different products and processes, significantly accelerating the commercialization of new raw materials, such as enhanced ingredient penetration, skin regeneration, anti-oxidation, anti-aging, and more, which are widely applicable in cosmetics, food, medical aesthetics, and pharmaceuticals.
Moving from research to large-scale production remains as one of the most difficult aspects in commercialization, particularly in scaling up from laboratory conditions to industrial-scale production. In laboratory settings, fermentation tanks may only be 20 liters, but in actual production, they can contain up to several tons. Without the proper environment to conduct thorough large-scale testing, the upscaling process can lead to imprecise conditions like temperature and pH levels that are necessary for optimal microbial growth.
To overcome these challenges, the pilot-scale testing center features a robust pilot production stage. This involves smaller-scale trials before full-scale commercial production where researchers can test and optimize production processes and identify potential issues. This approach minimizes resource waste and excessive cost, ensuring a smoother transition to large-scale production.
Leveraging Raw Material Matrix to Drive Sales Growth
Bloomage leverages its extensive portfolio of bioactive substances to offer comprehensive solutions tailored to customer needs. The company's raw material solutions matrix supports diverse applications in pharmaceuticals, personal care, nutrition, and innovative business sectors. This diversified offering is essential for meeting the evolving demands of a global client base.
Bloomage's H1 2024 financial results show that the personal care raw material business continues to grow due to the enhanced solutions offerings. Similarly, the pharmaceutical raw material business is evolving from a single product sales model to a combination of materials and services, while the nutrition and health raw material business is expanding its product matrix through global strategies and partnerships.
Today, Bloomage is not just relying on hyaluronic acid. Supported by six major R&D platforms, the company is constantly innovating and launching new raw materials. By expanding the bioactive substance matrix and enhancing mechanism and application research, Bloomage is poised to develop the next blockbuster ingredient beyond hyaluronic acid.
"Our strategic transformation into a solution provider is driven by our commitment to innovation and investment in advanced research and production capabilities," said Songyan Zou, Vice President of Business Operations at Bloomage. "By expanding our raw material offerings and leveraging cutting-edge technologies, we are well-positioned to meet the diverse needs of our clients and drive sustainable growth."
