Summary of Key Points
In May 2025, a beauty blogger questioned the low content of recombinant collagen in Juzi Biology's "Collagen Stick" product, sparking an industry debate (with Huaxi Biology also joining in), which marked a turning point for the company's valuation. Subsequently, its performance declined: annual revenue fell by 1.6% to 5.519 billion yuan, gross profit decreased by 2.5% to 4.433 billion yuan, and net profit dropped by 7.1% to 1.91 billion yuan, with the gross margin falling below 80%. The core issues were revealed: revenue was overly dependent on Collagen Stick (accounting for 81%), R&D investment was far lower than marketing spending, channel management had deteriorated, and the technical barriers had been broken, resulting in a more than 60% decline in market value. The market lost confidence in its "technology-driven" narrative, and investor sentiment shifted from a high-growth leader to an ordinary consumer goods company.
Detailed Analysis
1. Component Controversy Sheds Light on the Myth of High Growth
Collagen Stick was Juzi Biology's main source of revenue, accounting for 81%, with recombinant collagen being its key selling point. In May 2025, blogger "Dr. Big Mouth" pointed out that the collagen content in the product was only 0.0177% (far below the non-trivial standard of 0.1%). Huaxi Biology added fuel to the fire by announcing that it also had a Class III medical device certification for recombinant collagen, escalating the debate into a direct confrontation between the two companies over "hyaluronic acid vs. collagen."
This exposed Juzi Biology's vulnerability: 80% of its revenue came from one brand, which in turn relied on one key component. After the component was questioned, Collagen Stick's sales plummeted by 22% in the second half of the year, with online sales dropping by 70% and offline distributors paying more slowly. Worse still, competitors (such as Chuangfukang and Fuerjia) offered similar products at lower prices (mainstream prices ranging from 40 to 60 yuan, while Collagen Stick was higher), leading to a natural shrinkage in market share due to consumer preferences.
2. Loud R&D Claims, but Real Profits Come from Marketing
Juzi Biology has always claimed to be "technology-driven," but the numbers tell the truth: sales expenses in 2025 amounted to 2.056 billion yuan (a 2.4% increase), while R&D spending was only 0.89 billion yuan (a 16.6% decrease)—meaning sales were 23 times higher than R&D investment! This indicates that the company relies on heavy marketing and channel expansion rather than technological innovation to drive sales.
The results were disappointing: sales volume on Double Eleven decreased by 30%, and on TikTok, by 50%. Profits also declined, with the annual gross margin falling from 82.1% to 80.3%, and even worse in the second half of the year (to 78.6%), with a net profit margin drop of 5.5 percentage points. The reasons are simple: high-margin medical supplies were hard to sell (due to inventory control and anti-counterfeiting measures), and price wars weakened profitability.
3. Failing Channel Management: Inventory Piles Up, Cash Flow Problems
In the first half of 2025, Juzi Biology's accounts receivable soared from 140 million yuan to 510 million yuan (a record high), although it later reduced this figure to 200 million yuan, still 42.9% higher than the previous year; inventory also increased by 25.8% to 390 million yuan. These figures indicate serious problems:
- Distributors are reluctant to pay: To maintain sales, the company relaxed payment terms, leading to slower cash collection and a decline in brand credibility.
- Poor sales at the retail level: Increased inventory meant products were sitting in warehouses, indicating that consumers were not buying them.
More directly, operating cash flow decreased by 12.7% in 2025, suggesting that the company's earnings were not as solid as they appeared.
4. Intensifying Competition and Broken Technical Barriers
Juzi Biology's market value plummeted by more than 60%, mainly due to the collapse of its "technology-driven" narrative. It was once believed that recombinant collagen was a unique product, but now both Huaxi and Jinbo also held similar medical device certifications, reducing the company's technological advantage from exclusive to merely one among many.
The competition has intensified, with companies like Fuerjia, Vinona, and Fuqing entering the market with lower-priced products offering similar benefits. Market perception of Juzi Biology has shifted from a high-growth technology leader to an ordinary consumer goods company with narrowing competitive advantages. To regain its former valuation, it must invest heavily in R&D to create unique products or accept its position as an ordinary consumer goods company, focusing on cost-effectiveness and channel efficiency.
Conclusion
Juzi Biology's difficulties are not isolated: over-reliance on a single brand and component, insufficient R&D investment, and failing channel management, combined with increased industry competition, have led to declining performance and a collapse in valuation. To turn things around, the company must abandon its misleading "technology-driven" strategy and either make breakthroughs in R&D or accept its role as an ordinary consumer goods company. Whether the market will accept this change depends on its future actions.