Bloomage Bio Tech posts 20pc profit rise on robust hyaluronic acid sales
Bloomage BioTech sees market potential in South-East Asian nations and China’s lower tier cities
China’s Bloomage Bio Technology Corp reported a 20 per cent rise in attributable profit to 2.3 billion yuan (US$334 billion) on Wednesday, mainly on the back of robust hyaluronic acid (HA) raw material and end products sales.
The Hong Kong-listed company saw its revenue jump 30 per cent to 8.4 billion yuan year on year, with the final dividend set at 3.1 HK cents, compared to 2.7 HK cents paid in 2015, according to its filing to the Hong Kong stock exchange.
Dermal fillers, products that help reduce facial wrinkles and lines, are in great demand both in China and overseas in recent years.
A natural substance found in the soft connective skin tissues, cartilage, and joint fluids and in fluid around the eyes, HA can be extracted, reformulated and then injected as a skin filler.
With a population of 1.4 billion and a fast growing economy, China is forecast to become the world’s third largest cosmetic surgery market by 2019, according to HSBC, with a market valued at around 800 billion yuan.
Repositioning itself from a single product provider to a “dermal solution provider”, Bloomage Bio Technology now also sells self-developed cosmetics products and devices, which contributed about 11 per cent to the company’s total revenue, with HA raw materials and HA end products contributing 54.2 per cent and 34.9 per cent respectively in 2016.
Determined to cash in on China’s newly rich who crave better looks, Jin Xuekun, chief executive of Bloomage Bio Technology, said the company would focus more on the country’s second and third tier cities.
“Now about 80 per cent of our revenue is generated from the first-tier cities such as Beijing and Shanghai,” he said. “But we are also talking to more distributors in lower tier cities as they are set to become a bright spot in this industry for the next two years.”
Having recently acquired two high-end French HA manufacturers Vivacy and Revitacare, Jin said in addition to developed western countries such as the US and France, southeast Asian nations are also going to be the company’s focus.
“I couldn’t say exactly whether my decision to enter developing markets such as Vietnam, Indonesia and India is totally right as there’s more time needed to measure the results,” Jin said. “But I believe we are correct in trying to be in these markets as they are going to experience fast growth in five years.”
Bloomage is also expanding in South Korea and Russia, where the company just had “solid progress” in registering its products, according to Jin.
Shares of Bloomage rose 1.4 per cent to HK$11.24 at the close of the Hong Kong trading on Thursday.