Forefront丨Huaxi Biotechnology launched China's first hyaluronic acid edible brand "Black Zero". Is it a new trend or an IQ tax?

Forefront丨Huaxi Biotechnology launched China’s first hyaluronic acid edible brand “Black Zero”. Is it a new trend or an IQ tax?

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Hyaluronic acid can only be “used” but not “eat”? You may be out.

Recently, Huaxi Biotechnology launched the first hyaluronic acid food brand in China, “Black Zero”. The brand will launch 6 products including hyaluronic acid chewable tablets, soft candy, American ginseng drink, water light drink, bird’s nest drink, etc. The main focus is on healthy weight loss and peaceful sleep. Suppress, protect liver and stomach, whiten and antioxidant. All products are made of hyaluronic acid raw materials independently developed and produced by Huaxi Biological.

“Black Zero” Product Picture

Established in 2000, Huaxi Biotech, formerly known as Huaxi Freda Biomedical Co., Ltd., is mainly engaged in the production of hyaluronic acid. The so-called “hyaluronic acid”, or hyaluronic acid, is one of the raw materials for beauty and medical beauty, and is widely used in skin care products and micro-plastic surgery.

Huaxi Biotech will go back to 2018 when it is truly in front of consumers. In 2018, Huaxi Biotechnology cooperated with the Palace Museum to launch lipstick and facial mask products. According to publicity, its lipstick cream contains Huaxi Bio’s unique Hyacolor® oil-dispersed hyaluronic acid ingredient, while the mask contains Huaxi Bio’s unique Hymagic™ 4D honeycomb hyaluronic acid technology. The appearance of the Forbidden City lipstick also allowed Huaxi Bio to gradually enter the public eye.

Although there was not much discussion about Huaxi Biology before, Huaxi Biology has developed strongly in recent years. According to its prospectus released in 2019, operating income in 2018 was 1.263 billion yuan, a year-on-year increase of 54% compared to 2017; net profit in 2018 was 424 million yuan, a year-on-year increase of 90% compared to 2017. From 2016 to 2018, the gross profit margin of Huaxi Biology’s main business was 77.22%, 75.40% and 79.94%, respectively, and the comprehensive gross profit margin has been maintained at a level of more than 75%.

Screenshot of Huaxi Biological Prospectus

The “2019-2025 China Oral Beauty Products Industry Market Operation Situation and Investment Prospect Evaluation Report” released by Zhiyan Consulting in 2019 shows that, driven by the “value economy”, skin care, cosmetics, oral beauty, etc. are related to beauty The categories of products have received increasing attention from consumers, which has driven the trillion-level consumption growth of related markets in the past two years. Among them, the consumption growth rate of oral beauty is much higher than the average growth rate of various online categories. On the level of oral hydration, products with high “hyaluronic acid” content are the main hydration products. Hydration is no longer just a subsidiary function attached to whitening or anti-aging products. The proportion of hyaluronic acid oral hydration products is gradually increasing.

Qu Xiaoliang, an expert in the field of medicine, commerce and health care, once said, “Once the use of hyaluronic acid in food is released, it will be a huge outlet.” The launch of the “Black Zero” series of products by Huaxi Biology is an attempt by Huaxi Biology. Take the lead in the field of oral hyaluronic acid beauty products.

On January 7 this year, the National Health Commission has officially approved the request for sodium hyaluronate (ie hyaluronic acid, commonly known as hyaluronic acid, HA) declared by Huaxi Biotechnology as a new food raw material, allowing it to be added to ordinary food use. The scope of use includes milk and dairy products, beverages, alcohol, cocoa products, chocolate and chocolate products (including cocoa butter chocolate and products), as well as candies, and frozen drinks.

However, it is worth noting that the food industry is cautious about “hyaluronic acid intake”. Jiang Zhuoqin, professor of the Department of Nutrition of the School of Public Health of Sun Yat-sen University and deputy director of the Institute of Preventive Medicine, said in an interview with Times Finance and Economics, “Hyaluronic acid as a food raw material is not’excellent’. Hyaluronic acid is not the main nutrient required by the human body. Functional food supplements are not of much significance. The concept of’IQ tax’ is mostly. Huaxi Bio-related products’ main functions of protecting the liver and stomach, whitening and anti-oxidation have exceeded the concept of ordinary food, which is an exaggeration.”

Not only that, but Huaxi Bio, which claims that its hyaluronic acid is at the leading level in the country, seems extremely inadequate in R&D expenditure. The prospectus shows that from 2016 to 2018, Huaxi Biotech’s R&D expenditures were 3.27%, 3.14%, and 4.19%, respectively, all of which did not exceed 5%.

The Southern Metropolis Daily reported that “The Shanghai Stock Exchange has inquired about the methods and rationality of Huaxi Biology’s R&D costs are lower than comparable companies in the same industry, while maintaining an international leading position. Huaxi Biology finally admitted that its core technology It was acquired from elsewhere. In May 2001, Huaxi Biotechnology purchased the initial technology for the production of medicinal hyaluronic acid by fermentation from the Shandong Provincial Institute of Biopharmaceuticals, and in the same year paid the project technology transfer fee totaling 450,000 yuan. .”Not only that,”The Forbidden City lipstick, which became popular in 2018, was also processed by Huaxi Biological Co., Ltd., and its actual production company is’Intelli Technology Co., Ltd.’ located in Suzhou Industrial Park.

In contrast to this is Huaxi Biological’s high sales expenses. The financial report shows that Huaxi Biologicals sales expenses for the first three quarters of 2020 are 645.4 million yuan, a year-on-year increase of 98.04%. This inevitably makes people wonder whether Huaxi Biology is currently in a state of focusing on research and development and publicity.

In the future, Huaxi Bio will not only face the market competition of the two hyaluronic acid giants, Haohaishengke and Aimeike, but also deal with many new entrants such as Sihuan Pharmaceutical and Changshan Pharmaceutical.“Black Zero”, as an attempt by Huaxi Biology to seek transformation, is yet to be known whether it will bring new outlets to the oral beauty industry. 

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