Haohai Biological Reports Full-Year Income Retreat Amid VBP Pressures
Key Takeaways
- Shanghai Haohai Biological Technology Co., Ltd.
- has reported a decline in full-year income for the 2025 fiscal year, driven by margin compression in its core ophthalmology and orthopedic segments.
- The retreat highlights the ongoing challenges of China's volume-based procurement (VBP) policies and intensifying competition in the medical aesthetics market.
Mentioned
Key Intelligence
Key Facts
- 1Shanghai Haohai Biological reported a decline in net income for the full year 2025, ending a period of steady growth.
- 2The company's ophthalmology segment faced significant margin compression due to provincial and national VBP rounds for IOLs.
- 3R&D expenses increased as the company accelerated development of its 4th-gen hyaluronic acid fillers and myopia control products.
- 4Medical aesthetics remains the primary growth engine, though marketing costs have risen due to intense domestic competition.
- 5The company maintains a dual listing on the Hong Kong Stock Exchange (6826.HK) and the Shanghai Stock Exchange (688366.SH).
Analysis
Shanghai Haohai Biological Technology Co., Ltd. (Haohai Biological), a prominent player in China’s medical biomaterials sector, has reported a retreat in its full-year income for the fiscal year ending December 31, 2025. The announcement, made on March 21, 2026, signals a challenging period for the company as it navigates a complex regulatory environment and shifting market dynamics in its primary business segments: ophthalmology, medical aesthetics, orthopedics, and wound care. This retreat in profitability follows a period of aggressive expansion and product diversification, suggesting that the company's bottom line is feeling the weight of systemic price pressures in the Chinese healthcare market.
The primary headwind facing Haohai Biological remains the continued expansion of Volume-Based Procurement (VBP) in China. This centralized bidding process, designed to reduce healthcare costs for the state, has significantly impacted the pricing of intraocular lenses (IOLs) and orthopedic sodium hyaluronate injections—two of Haohai’s legacy revenue drivers. While VBP allows for higher sales volumes by securing hospital contracts, the steep price cuts required to win these bids often lead to thinner gross margins. For Haohai, which has historically relied on its dominant position in the domestic IOL market, the transition to a high-volume, low-margin model has proven difficult to offset through efficiency gains alone.
Shanghai Haohai Biological Technology Co., Ltd.
In the medical aesthetics division, which includes hyaluronic acid (HA) fillers and botulinum toxin products, Haohai faces a different set of challenges. While the aesthetics market in China continues to grow, it has become increasingly saturated with both domestic competitors like Imeik Technology and Bloomage Biotechnology, as well as international giants. To maintain its market share, Haohai has been forced to increase its marketing and promotional spending, which has further pressured operating margins. Additionally, the company is in the midst of a multi-year R&D cycle, investing heavily in fourth-generation organic cross-linked HA fillers and orthokeratology (OK) lenses for myopia control. While these products represent the future of the company’s growth, the current R&D burn is a significant factor in the reported income retreat.
What to Watch
Market analysts are closely watching how Haohai manages its capital allocation in the coming year. The company has recently pursued several strategic acquisitions to bolster its technology pipeline, but the integration of these assets and the time required for clinical validation and regulatory approval mean that these investments are not yet contributing significantly to net income. Furthermore, the broader macroeconomic environment in China has led to more cautious consumer spending on elective medical procedures, such as high-end aesthetic treatments, which may have contributed to a slower-than-expected growth rate in the company’s non-VBP-regulated segments.
Looking forward, Haohai Biological’s recovery will likely depend on its ability to successfully commercialize its high-margin, innovative pipeline products that are less susceptible to VBP price caps. Investors will be looking for signs of stabilization in the ophthalmology segment and a return to double-digit growth in the aesthetics division. The company’s ability to optimize its manufacturing costs and streamline its sales force in response to the VBP era will be critical in determining whether this income retreat is a temporary setback or a sign of a more prolonged period of stagnation in the domestic biomaterials market.
Timeline
Timeline
Aesthetics Expansion
Haohai launches new line of high-end dermal fillers to compete in the premium aesthetics market.
VBP Participation
Company participates in multi-province centralized procurement for intraocular lenses, securing volume at lower price points.
Annual Results Announcement
Official report confirms a retreat in full-year net income compared to the previous fiscal year.
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