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China Fund News reporter Nan Shen

On the evening of August 5, By-Health released its 2024 interim performance report. Affected by the market environment, the company's performance declined, but it still maintained its leading position in the industry. In the first half of this year, the company achieved operating income of 4.613 billion yuan, a year-on-year decline of 17.56%, and realized a net profit attributable to shareholders of 891 million yuan, a year-on-year decline of 42.34%.

During the reporting period, By-Health focused on channel optimization, product innovation and upgrading, and brand building. Due to intensified market competition, By-Health's investment in brand promotion in the first half of the year increased compared with the same period last year. In terms of product innovation and upgrading, By-Health's two core products, "Protein Powder" and "Jianliduo", were upgraded successively.

At the same time as the semi-annual report was released, By-Health announced that it plans to spend up to 200 million yuan to increase the repurchase. In October last year, the company launched a round of repurchase plan, planning to repurchase 150 million to 300 million yuan within 12 months after the board of directors approved the plan. As of the end of July, this round of repurchase had implemented 250 million yuan.

Growth in health consumption demand slows down

By-Health upgrades two major products

In the post-epidemic era, the growth of health consumption demand has slowed down and the market has returned to normal. According to Zhongkang CMH data, from January to May this year, the sales of health products and health foods in the national retail pharmacy channel fell by 20.5% year-on-year. As the industry leader, By-Health also saw a decline in sales in the pharmacy channel in the first half of this year.

Competition in online channels is becoming increasingly fierce. According to a report by Euro-Tec Consulting, the share of online retail sales of the top 50 brands in the nutrition and health track in 2023 is 29%, which is 5 percentage points lower than in 2022. There are many new entrants, and brand concentration is getting lower and lower. Some white-label and OEM products that rely on traffic to bring goods have flooded into the market through e-commerce channels with relatively low entry barriers, causing a great impact on the leading brands.

At the investment exchange meeting on April 11 this year, Liang Yunchao, chairman of By-Health, mentioned that there are two very big challenges for the company this year. The country will issue new product approvals after six or seven years of stagnation, and By-Health’s two largest products, "Protein Powder" and "Genlife", will be upgraded in the second and third quarters of this year.

At present, "protein powder" and "Jinliduo" have been upgraded one after another. Among them, the newly upgraded "Star Diamond" protein powder launched online has a high-quality high protein content of 82%, and its raw material, soy protein isolate, has obtained two national invention patents. The newly upgraded "Gold" protein powder and "Platinum" protein powder offline will also be launched this year. The high-quality high protein content of "Gold" and "Platinum" protein powders is as high as 83%, and they are low in lactose, low in fat, and dissolve quickly.

In May this year, "Jianliduo" launched a new product, glucosamine chondroitin sulfate collagen peptide tablets, which newly added "double cartilage nutrition collagen peptide" and "sodium hyaluronate". The content of glucosamine and chondroitin has been greatly increased, "providing consumers with more comprehensive joint care options."

By-Health said that in the second half of this year, the company will take improving future business quality as its core goal, continue to promote the transformation to strong technology and strong brands, actively adjust and optimize the overall business strategy and cost investment model, and continue to promote core product upgrades and optimize channel operations, so as to promote high-quality development of the industry with "scientific nutrition" and more professional product innovation.

Plans to repurchase another 100 million to 200 million yuan

The previous round of repurchase plan has been completed by 80%

Also on the evening of August 5, By-Health announced that based on its confidence in the company's future development prospects and recognition of its long-term value, and in order to safeguard the interests of the majority of investors and enhance investor confidence, the company plans to use its own funds to repurchase part of the company's shares through centralized bidding transactions for the purpose of cancellation and reduction of registered capital.

The total amount of funds for this share repurchase shall not be less than RMB 100 million and not more than RMB 200 million. The repurchase price shall not exceed RMB 20 per share (inclusive). The implementation period for the share repurchase shall not exceed 12 months from the date on which the shareholders' meeting deliberates and approves the share repurchase plan.

On October 30, 2023, By-Health launched a round of repurchase plan, at which time the company announced that it would repurchase shares worth RMB 150 million to RMB 300 million, with a repurchase price of no more than RMB 26 per share and a repurchase period of no more than 12 months from the date when the board of directors approved the repurchase plan. This round of repurchase is still within the implementation period.

As of July 31, 2024, the company has repurchased 15.737 million shares in this round of repurchase through a dedicated repurchase account in a centralized bidding transaction, accounting for 0.9252% of the total share capital, with the highest transaction price of 18.07 yuan per share and the lowest transaction price of 14.19 yuan per share, and the total payment amount is 250 million yuan (excluding transaction fees). The repurchase complies with the requirements of relevant laws and regulations and is in line with the company's established repurchase plan.

As of the close of August 5, By-Health's latest market value was approximately RMB 22.2 billion. As of the end of the first half of this year, the company had 66,500 shareholders.

Editor: Joey

Audit: Wooden Fish

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