Finance Association, April 24 (Reporter He Fan) Judging from the financial report released today, Jiangsu Wu Zhong (600200.SH) has been losing money for two consecutive years, and the company's net profit also declined sharply in the first quarter of this year. With the company's gross margin in the pharmaceutical sector declining, Jiangsu Wu chose to work hard in the medical and aesthetic business sector. On the one hand, it introduced products from abroad, and on the other hand, it entered the field of recombinant collagen through cooperative research and development. It is worth paying attention to whether the AestheFill Baby Acupuncture, which was approved in January this year, can become a new performance growth point for the company in the future.

This evening, Jiangsu Wuzhong released the 2023 report and 2024 quarterly report. The company's revenue in 2023 was 2.24 billion yuan, up 10.55% year on year; net loss was 71.9452 million yuan, which is narrower than in 2022.

In the previous performance pre-loss announcement, the company attributed the loss to three reasons: first, in 2023, pharmaceutical industry product revenue and gross profit declined due to withdrawal from medical insurance, national collection, and plant relocation; second, the implementation of the equity incentive plan increased equity incentive costs; third, the company's medical and aesthetic business was still in the R&D and registration stage in 2023 and had not yet achieved profit.

According to this year's quarterly report, the company's revenue was 703 million yuan, up 14.97% year on year; net profit was 50,591 million yuan, down 82.03% year on year. The company explained that it transferred Long March Xinkai shares in the same period last year to confirm investment income; after deducting non-net profit losses of 1.9522 million yuan, a year-on-year decrease of 132.62%. The company indicated that the cost of the aesthetic business for new product launches increased in the first quarter compared to the previous year.

According to reports, Jiangsu Wuzhong's business revolves around the “Pharmaceutical+Medical Aesthetics” sector. The main products in the pharmaceutical sector cover the fields of “antiviral/anti-infective, immunomodulatory, anti-tumor, digestive system, cardiovascular”, etc., including products such as pidomod oral solution, arbidol hydrochloride tablets, and injectable proiodimonium.

Meanwhile, the medical and aesthetic biotechnology sector mainly focuses on high-end medical and aesthetic injectable products, and lays out related product pipelines through external introduction, cooperative research and development, and independent research and development.

In 2023, the gross margin of the company's pharmaceutical industry decreased by 10.76 percentage points compared to the previous year, but operating costs increased by 52.13%. In the face of declining profitability in the pharmaceutical sector, the company's future profit points are focused on the medical and aesthetic field.

On January 22, AestheFill Beauty Acupuncture, an agent of Jiangsu Wu Zhong, was approved and is expected to be officially marketed in mainland China in the first half of 2024.

On April 23, the company held a press conference for AestheFill's launch agency. A medical and aesthetic industry practitioner revealed to the Financial Federation that AETheFill has just gone public and has not yet been fully rolled out, and the pricing may be about the same as Avellan. Competition for similar products is the greatest benefit for consumers.

The AestheFill product is a “medical and aesthetic regeneration injection” developed by the Korean company Regen Biotech, Inc., composed of PDLLA microspheres and sodium carboxymethylcellulose.

In fact, as early as December 2021, Wu Zhong Aesthetics, a wholly-owned subsidiary of the company, obtained 51% of Datou Healthcare's shares through capital increase and equity transfer, and obtained AestheFill AestheFill's exclusive sales agency rights in mainland China.

Currently, the market share of medical and aesthetic regenerative injections in China is basically “three parts of the world”, namely Aevilan of Changchun Shengbomar, Aimeike (300896.SZ), and Yi Yanshi of Huadong Pharmaceutical (000963.SZ). Among them, Aevilan and Wet White Angel were launched in 2021. In August of the same year, Huadong Pharmaceutical's Yi Yanshi went on sale. Meanwhile, in July 2023, Aimeike also launched a new medical and aesthetic regenerating injection, such as Angel, which focuses on firming and softening facial contours, and differentiates and complements the outer contour support and inner contour highlighter of Wet White Angel.

In addition, the company also introduced the latest injectable biphasic crosslinked lidocaine-containing sodium hyaluronate gel product from the Korean company Humedix (Humedix). The clinical work of this product has completed the enrollment of all subjects.

In addition to introducing foreign products, the field of recombinant collagen is another driving force in Wuzhong, Jiangsu. On October 26, 2023, Jiangsu Wuzhong Aesthetics signed an investment and technical cooperation agreement with Nanjing Dongwan Biotech. The former invested 10 million yuan to hold 2% of Nanjing Dongwan's shares. The two sides jointly promoted clinical research on medical and aesthetic implant products based on recombinant type I human collagen, and Wuzhong Aesthetics is responsible for the production, clinical registration and sales of Class III medical device products. In March 2024, the company stated on official Weibo that the main document filing for recombinant type I human collagen raw materials has been completed.