Fuerjia’s 2 Billion Ceiling: The Challenge of Reconstruction After Channel Dividend Recedes

--- The medical aesthetics mask business may be undergoing structural changes. In 2025, Fuyoujia, known as the "first stock of medical aesthetics masks," achieved an operating income of 1.893 billion yuan, a decrease of 6.14% year-on-year; net profit attributable to the parent company was 433 million yuan, a sharp drop of 34.56% year-on-year; net profit attributable to the parent company excluding non-recurring items was almost halved, falling from 604 million yuan in the same period last year to 337 million yuan, a year-on-year decrease of 44.13%. The first quarter report of 2026 released on the same day presents a drastically different picture: under delayed expense realization and low base recovery, revenue reached 548 million yuan, up 82.12% year-on-year; net profit attributable to the parent company was 172 million yuan, up 87.73% year-on-year. Between the decline and the growth, this professional skin care company, which started with "medical device registration number," is undergoing a profound transformation in channels and business. ## 01 Channel Pain and Rising Costs The performance slide in 2025 was not caused by a single factor, but rather by multiple pressures combined. First is the adjustment of channels; the company's annual report clearly stated that the decline in operating income was mainly due to “optimization of offline channels.” In 2025, the company's online income increased by 33.5% year-on-year, but offline income plummeted by 54.5% year-on-year. The proportion of online income surged from about 55% the previous year to 78.2%, an increase of 23.2 percentage points year-on-year. The significant contraction of offline business directly dragged down overall revenue. On the other hand, while revenue declined, the drop in profits was much sharper, reflecting huge pressure in expenses. The sales expense ratio for 2025 rose 11.2 percentage points year-on-year, and the total period expense ratio increased 15.5 percentage points to 54.3%. The company explained in its half-year report that the main reason for the decline in net profit was "continuous increase in promotional expenses." In fact, this trend was already apparent in 2024. For the whole year of 2024, the sales expense ratio reached 37.1%, up 9.6 percentage points from the previous year. At that time, the company's online direct sales income grew by 26.8% year-on-year, but marketing expenses also surged accordingly. Entering 2025, as the proportion of online channels further expanded, pressure on expenses also increased, resulting in synchronized contraction of operating cash flow. In 2025, net cash flow from operating activities was 367 million yuan, down 39.9% year-on-year. As for inventory, by the end of 2025 inventory increased 3.5% year-on-year to 170 million yuan, and inventory turnover days extended from about 139 days the previous year to 156 days. However, the company's liability ratio remained low at 4.09%, and the overall balance sheet was still healthy. Notably, the company is currently in a product transition phase. Fuyoujia started with medical device registered medical dressings; its "white mask" and "black mask" used to be the most recognizable signature products. However, judging from the 2025 product structure, this pattern is undergoing significant change. In 2025, the company’s cosmetics business income grew by 16.3% year-on-year, raising its proportion to 71.6%; income from medical devices dropped sharply by 36.8% year-on-year, falling to a 28.5% share. This means that functional skincare products have replaced medical dressings as the main pillar of company income. This change is both the result of proactive transformation and a reflection of pressures faced by the medical dressing segment. On one hand, as the National Medical Products Administration continues to refine the classification management of "medical dressings," the compliance threshold for products with medical device registration numbers keeps rising. On the other hand, more and more cosmetic brands are entering the professional skin care track, using lower prices and diverse marketing methods to compete for market share. ## 02 Fierce Competition in a Hundred-Billion Red Ocean The changes in Fuyoujia's financial data are not an isolated event, but embedded in the industry upheaval of the dual tracks of functional skin care and medical dressings. Understanding Fuyoujia’s situation requires assessing it from three dimensions: industry scale, competition structure, and regulatory environment. Both functional skincare and medical dressings belong to the professional skin care track and the market size continues to expand. According to Qianzhan Industry Research Institute, the broader professional skin care product market is expected to grow at a compound rate of 13.9%, with the industry likely to exceed 100 billion yuan by 2030. However, industry competition is becoming increasingly fierce. Looking at the competitive landscape of the functional skincare submarket, Betain (with its Winona brand) holds 11.71% market share, ranking first; Huaxi Bio follows with 5.27%; Fuyoujia, Shanghai Jahwa, and Giant Biotech respectively hold 4.14%, 2.44%, and 2.15%. Overall, domestic functional skincare brands still have low market concentration, with the top three accounting for 21.12% of revenue, and the rest dispersed among international giants. In the competitive tiers, Betain stands at the top with over 5 billion yuan in functional skincare income; Giant Biotech, Fuyoujia, Shanghai Jahwa, etc. are in the second tier, with business income in the range of 1 to 3 billion yuan. The "low-price spiral" faced by the mask category is a common industry issue. Basic sheet mask formulas do not have high technical barriers and are seriously homogenized. Ecommerce promotions and live-stream sales further intensify price competition, squeezing brand premium space. For Fuyoujia, which centers on sheet masks, the key question in the industry competition is how to break through the low-price predicament by differentiating raw materials and deepening usage scenarios. Changes in regulatory policy are also a critical variable in understanding the evolution of the medical dressings industry structure. Under medical device management, medical dressings are categorized by risk level into Class I, II, and III medical devices; any dressings claimed to be sterile are at least Class II; if they contact deep dermal layers or wounds below, stricter management is enforced. The rising compliance threshold has a dual effect: On the one hand, leading companies with complete registration and compliance systems have first-mover advantages, while the entry barrier is greatly raised for newcomers; On the other hand, after the use of "medical device number mask" for cosmetic promotion was explicitly banned, companies must strictly distinguish between medical device numbered dressings and cosmetic numbered products, and can no longer blur the boundaries in marketing. Combining industry data and competitive dynamics, the functional skincare and medical dressings tracks are shifting from "marketing competition" to "R&D competition." Leading players have gradually built brand barriers and research barriers. Since special cosmetics have long development and application cycles and depend heavily on imported ingredients, upstream suppliers have strong bargaining power over special functional ingredients. This trend poses a dual challenge for Fuyoujia: In cosmetics, it needs to build ingredient moats through new raw material research; in medical devices, it needs to promote registration for Class III devices to elevate its category. For Fuyoujia, the focus of industry competition is shifting from early-stage conceptual positioning to technical positioning. How to achieve a transformation from channel-driven to technology-driven in this paradigm shift will determine whether it can maintain and improve its market position in the hundred-billion-yuan track. --- Risk warning and disclaimer The market has risks; investment should be cautious. 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