On the evening of August 5, BYHEALTH released its 2021 semi-annual report. According to its financial report, against the backdrop of accelerating market demand for nutrition and health-care products, BYHEALTH has pragmatically carried forward with its business plans for 2021 and pursued synergetic development across all sectors. BYHEALTH achieved a revenue of CNY 4.198 billion in H1, an increase of 34.32% year-on-year; Its net profit attributable to shareholders of the listed company reached CNY 1.371 billion yuan, an increase of 42.55% year-on-year.

Performance further accelerates, consolidating its status as a market leader

The year 2021 marks BYHEALTH's first year to hit its strategy of "New Three-Year Plan" and initiate its new growth cycle, in which BYHEALTH enjoyed a business environment that was stable and significant improved over the same period last year, with good momentum for improvement.

In terms of domestic business in H1 of 2021, revenue from off-line channels accounted for nearly 71.71% of the domestic revenue, a year-on-year increase of 24.18%; Revenue from online channels soared by 79.72% year-on-year. Among them, the main brand "BYHEALTH" recorded the revenue of CNY 2.563 billion, a year-on-year increase of 40.69%; The joint health brand "KEYLID" achieved a revenue of CNY 850 million, a year-on-year increase of 29.25%. The revenue from domestic products of "Life-Space" reached CNY 118 million, up 34.53% year-on-year.

According to Euromonitor's data, BYHEALTH ranked first in China's vitamin and dietary supplement industry in 2020 with a market share recording 10.3%, unfalteringly topping the market and standing out with prominent advantages over the market players ranked the second and the third repetitively. Since the beginning of this year, it has even hit the market value of CNY 60 billion, becoming the first enterprise in the global industry by market value, which consolidated its leading position in the industry. In the new three-year plan, the "science-based nutrition" strategy serves as the core driving force for the Company's differentiated competitive advantage, so as to lead the industry in sustained growth.

Minsheng Securities expects that BYHEALTH will continue to drive the innovation of major business and assertive projects in the "New Three-Year Plan" from 2021 to 2023 around four strategies: "science-based nutrition", "the whole-chain digitalization", "a super supply chain" and "the management of users' assets", and shape up new core competitiveness, securing long-term growth in its main brand and major single products in a steady way.

New Three-year Plan rolled out orderly, building up momentum for the next round of growth

In the New Three-year Plan, BYHEALTH is steadily expanding new industry spaces and incremental markets around strategies such as "science-based nutrition", "reforms for revitalization" and "digitalization".

In H1 of 2021, BYHEALTH carried out the R&D of multiple new functional technologies and products around the strategy of "science-based nutrition", further paving new functional tracks for future layout; upgraded its R&D strategies of independent core proprietary technologies and self-owned patented raw materials from all aspects. In this way, BYHEALTH can foresee and satisfy consumer needs with new raw materials, and establish core technology thresholds with new raw material research and development, creating a differentiated competitive advantage for products. At present, the Company’s new generation, herbal power, auxiliary, lipid-lowering product—Shu Bai Ning Ino Care Capsule has hit the market. Such a new major single product targeting the cardiovascular and cerebrovascular health market is expected to contribute new momentum to BYHEALTH’s growth in performance.

Around the trend of segmented and fast-moving health consumption, BYHEALTH continues to deploy segmented markets with high potentials and seeks to boost the growth of its business with multiple engines. In terms of main single products, “KEYLID” consolidates its leadership in its category through expanding consumer population, scenarioses and penetrating channels; "EASEYE" is expanded from regional promotion to nationwide promotion; "Jian An Shi" is oriented at core model market. In terms of image products, "Multivitamin" series products serve to gain bran popularity and consolidate market position via precise marketing. Besides, BYHEALTH has released the star product of "Bovine Colostrum Plus Calcium Chewable Tablets" and enriched the children's whole product matrix, boosting the growth of children's series products; "Melatonin" drives business growth in segmented market by accurately positioning market demand.

BYHEALTH is also expediting the digitalization and the management of users' assets. BYHEALTH's financial reports suggest that it stably promoted its operation strategies in H1 by means of operating members according to segmented brands, cooperating with third parties to carry out health management services and initiating "new retail" project. In the near future, BYHEALTH will continue to deepen the IP on "SVIP Day" to realize the entire-region coverage of all brands; In terms of new retails, BYHEALTH will upgrade the platform of "YOU Nutrition" so as to realize normal member sales and the automatic distribution of orders to the terminal.

Uphold "science-based nutrition" strategy unswervingly and explore the strategy of "Industry Leader"

According to Euromonitor's data, the penetration rate of vitamin and dietary supplements reaches up to 50% in America, 40% in Japan, but only 20% in China. The per capita consumption of vitamin and dietary supplements is US $88.5 in America, US $82 in Japan and US $14.3 in China, only 16% of that in America. Based on this, it is predicted that there is a possibility that the vitamin and dietary supplements market in China may grow 6 times in the future. By 2020, China's vitamin and dietary supplement (VDS) industry scaled up to CNY 174.3 billion.

In terms of industry trend, Chinese VDS industry may see a polarized development in the future. On the one hand, it is about the functional products; On the other hand, it is about food-prone, fast-moving and high-frequency products with health-care functions. At a new starting point, functional products are competed and flocked around high-grade, precision and advanced technologies, which is based on enterprises’ strength in the R&D of science and technology. Therefore, the R&D and the technical investment into products will play an increasingly significant role in the development of enterprises.

How can BYHEALTH adapt itself to such a huge and diversified market in the future? As the leading VDS enterprise, BYHEALTH is upholding "science-based nutrition" for layout in advance, and exploring the operation strategy of "Industry Leader". Since 2021, BYHEALTH plans to upgrade its strategy of core proprietary technology and own patented material R&D in all respects, with the purpose of making products with distinctive tech power and differentiated competitive edge on a sustainable basis. 

So far, the Company have developed more than 30 customized raw materials and patented for originating over 60 materials and formulas. Meanwhile, BYHEALTH is concentrated on the R&D of new functions apart from the 27 functions, and the R&D of technologies concerning precision nutrition, such as new detection technologies, evalsuation methods, health group database, functional products, knowledge maps, and intelligent algorithms. BYHEALTH will integrate internal and external resources, focus on innovative R&D, and continue to create innovative products featuring new functions, new formulations and new technologies.

BYHEALTH is oriented at the transformation from squeezed growth to restorative growth that leads the entire VDS industry, so as to bring out incremented benefits and value to the entire industry and promote the healthier and more sustainable development of VDS industry. As the competition of R&D in VDS industry enters the "second half ", the focus transits from "channel-oriented" to "user-oriented", and the leading enterprises have increased their investment on R&D of science and technology, the industrial resources may be further integrated with market. Driven by the multi-engine strategy, BYHEALTH is promise to play a more leading role in the future, and its medium and long-term growth investment value may be further unleashed.