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By-HealthThe latest semi-annual report was released, and the performance was not optimistic.

On the evening of August 5, By-Health released its 2024 semi-annual report. The financial report showed that in the first half of the year, the company achieved revenue of 4.613 billion yuan, a decrease of 17.56% from the same period last year, and net profit attributable to shareholders of listed companies was 891 million yuan, a decrease of 42.34% from the same period last year, with both revenue and net profit falling.

Revenue from both online and offline channels declined year-on-year, with RMB 500 million invested in advertising in the first half of the year

Nandu Wancaishe reporters noted that in the first half of this year, the main brand "By-Health" achieved revenue of 2.635 billion yuan, a year-on-year decrease of 19.77%. "Jianliduo" achieved revenue of 591 million yuan, a year-on-year decrease of 16.81%; "Lifespace" domestic products achieved revenue of 210 million yuan, a year-on-year decrease of 24.79%; overseas LSG achieved revenue of 511 million yuan, a year-on-year decrease of 4.72% (in Australian dollars: LSG's operating income was 108 million Australian dollars, a year-on-year decrease of 5.37%).

In terms of channels, in the first half of this year, By-Health's offline channels achieved revenue of 2.629 billion yuan, a year-on-year decrease of 15.82%. Online channels achieved revenue of 1.953 billion yuan, a year-on-year decrease of 20.54%.

In fact, By-Health's shrinking online and offline business is also a common problem for health food this year. According to CMH data, from January to May this year, sales of health products and health foods in retail pharmacies nationwide fell by 20.5% year-on-year.

In terms of online channels, a report by Euro-Tec Consulting shows that the share of the top 50 brands in terms of online retail sales in the nutrition and health track in 2023 will be 29.0%, 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.

In addition to the decline in revenue due to industry reasons, By-Health's relatively high marketing expenses may be one of the main reasons affecting its performance.

The financial report shows that in the first half of this year, By-Health invested 522 million yuan in advertising and promotion, saying that this expense was mainly to increase brand awareness and increase resource investment in variety show sponsorship and key products, including 131 million yuan for variety shows, 204 million yuan for online advertising, and 187 million yuan for planning and production fees and others.

Regarding the above performance, By-Health stated in its financial report:In the first half of this year, with the consumption environment continuing to change and industry competition intensifying, the company's phased operating strategy failed to effectively promote the realization of the expected goals at the beginning of the year.

Performance began to decline in the first quarter, and the chairman said that "the industry has entered a new cycle"

Nandu Bay Finance reporter noticed that starting from the first quarter of this year, By-Health’s performance has shown a downward trend.

According to the first quarter report this year, the company achieved operating income of 2.646 billion yuan, a year-on-year decrease of 14.87%, net profit attributable to shareholders of listed companies of 727 million yuan, a year-on-year decrease of 29.43%, and non-net profit of 709 million yuan, a year-on-year decrease of 28.67%. Net cash flow from operating activities was 149 million yuan, a year-on-year decrease of 77.56%.

In addition, the operating cash flow situation of Tongcheng Beijian is not optimistic. The net operating cash flow, which has been maintained at more than 1 billion yuan since 2019, dropped sharply to 294 million yuan in the first half of 2024.

In addition to the performance pressure, Nanduwan Finance reporter noticed that By-Health also mentioned some risk factors in the report, such as product quality and food safety risks, policy risks, risks of raw material procurement on major product sales, risks of intensified industry competition, risks of new businesses and new projects, risks of asset impairment, and risks of investment projects with raised funds. The company said it will actively respond to these risks and ensure product quality and safety by strengthening quality management, optimizing production processes, purchasing precision inspection equipment, and training quality management personnel.

A few months ago, when the 2023 annual report was released, Liang Yunchao, chairman of By-Health, said in a "letter to shareholders" that he "cannot be complacent" and has already felt the crisis. He said that 2023 is the first year of the new cycle of dietary supplements, but "under the turbulent appearance of the new cycle, there are undercurrents."

It is worth noting that on the evening of August 5, Tongcheng Beijian announced that the company plans to repurchase the company's shares for 100 million to 200 million yuan. The repurchased shares will be cancelled in accordance with the law and the registered capital will be reduced. The repurchase price will not exceed 20 yuan per share (inclusive).

Written by: Nandu Wancaishe reporter Huang Chibo Beibei