On July 28, Byhealth Co.,Ltd. (300146.SZ) announced a plan to invest an additional 70 million yuan of its own funds into Moonshot AI Ltd and its affiliates or post-restructuring entity. Since the start of 2026, within just three months, Byhealth has made three investments in Moonshot AI, totaling approximately 175 million yuan.

Beyond Moonshot AI, Byhealth's external investments have also touched DeepSeek, StepFun, and chips for on-device AI inference and in-vehicle spatial computing. This frequent "cross-sector" move reveals the company's anxiety over its slowing core business. In its 2025 annual report, the chairman acknowledged that "Byhealth is directly facing major challenges from both internal and external pressures in its growth history." Amidst a backdrop of declining performance, can these "cross-sector" investments offer a solution?

Byhealth's Investment Portfolio

Byhealth's initial investment in Moonshot AI dates back to May 2026, when it used 10 million yuan of its own funds to subscribe for warrants issued by Moonshot AI Ltd, acquiring 446,767 shares of Series D preferred stock, representing a 0.11% equity stake after completion. On July 2, Byhealth made an additional investment, with its wholly-owned subsidiary Hong Kong Bairui Co., Ltd. indirectly investing $5 million in Moonshot AI Ltd by subscribing to an investment fund, increasing its stake to 0.12%. With this latest 70 million yuan injection, Byhealth's total investment in Moonshot AI will reach 175 million yuan.

Byhealth's external investments are not limited to Moonshot AI. In March 2026, its wholly-owned subsidiary Hong Kong Bairui invested $10 million to subscribe to shares of the XG asset unit of Huangpu River Capital SPC, indirectly positioning itself in smart spatial computing and cockpit-integrated chips. In April, Byhealth indirectly invested 70 million yuan in large-model company StepFun through the Tianjin Haitang Tonghui Venture Capital Fund. In June, the company invested 50 million yuan of its own funds in Yuanli Semiconductor, focusing on on-device AI inference chips. Also in June, Byhealth invested 130 million yuan in the Lisi Xingling Venture Capital Fund, indirectly taking a 0.04% stake in DeepSeek. Overall, Byhealth's external investments now cover three major model companies—DeepSeek, Moonshot AI, and StepFun—as well as on-device AI inference chips and automotive spatial computing chips.

In fact, for a long time prior, Byhealth's external investments mainly revolved around the broader health track. A representative example is the Ganzhou Danlu Health Investment Partnership project. At the end of 2022, Byhealth announced a 30 million yuan contribution to indirectly invest in the Danlu Phase III healthcare fund via this entity, focusing on early-stage projects in the medical and health field, with the core goal of leveraging professional institutional resources to extend the ecosystem around health supplements. By the end of 2025, Byhealth held 386 million yuan in other non-current financial assets and 214 million yuan in other equity instruments, with total equity-type financial investments reaching approximately 500-600 million yuan—a relatively modest scale. This year, however, cross-sector investments have become frequent.

Behind these frequent "cross-sector" moves lies Byhealth's growth anxiety. In its 2025 annual report, the chairman stated, "The 30-year-old Byhealth is directly facing major challenges from both internal and external pressures in its growth history." Medical insurance policies and declining purchasing power have caused the entire VDS (vitamin, dietary supplement) category in the pharmacy channel to plummet continuously. Simultaneously, the company missed growth opportunities in cross-border e-commerce and the Douyin channel. As a dietary supplement company, Byhealth has accumulated substantial cash on its books. By the end of 2025, its cash and cash equivalents reached 2.449 billion yuan, with 3.608 billion yuan in trading financial assets. Amidst stagnant core business growth, capital expenditure has dropped to relatively low levels. Whether Byhealth will make further investments remains to be seen.

Core Business in Decline, Capacity Expansion Stalls

Over the past two years, Byhealth's own capacity expansion has stalled. In 2021, Byhealth raised 3.125 billion yuan through a private placement, primarily for three expansion projects: the Zhuhai production base Phase V, the Zhuhai production base Phase IV expansion and upgrade, and the Australian production base construction. As of 2025, investment progress for the Zhuhai Phase IV project is only 18.96%, Phase V is at 22.52%, and the Australian base is at 69.15%. Byhealth explained that due to changes in industry channel structure and intensified competition, the actual growth rate of its business fell short of expectations, leading to reduced capacity demand and a deliberate slowdown in the investment progress of the fund-raising projects. Currently, Byhealth's main products are experiencing idle capacity, with utilization rates for tablets, capsules, and powders all at 83% in 2025. Existing capacity already covers current market demand. If capacity construction proceeds as originally planned, new capacity will face digestion challenges, and new fixed assets will increase depreciation and amortization expenses, thereby eroding profit margins.

From a performance perspective, after reaching a historical peak in revenue of 9.407 billion yuan in 2023, Byhealth entered a downward trajectory: revenue fell 27.3% year-on-year to 6.838 billion yuan in 2024 and further declined 8.38% to 6.265 billion yuan in 2025, returning to levels seen in 2020-2021. Net profit has also been declining. In 2024, Byhealth's net profit plummeted 62.62% to 653 million yuan. While it grew 19.81% year-on-year to 782 million yuan in 2025, it remains significantly below previous years. Notably, the 2025 net profit growth did not come from operational improvements but was primarily driven by expense reduction. That year, the company's selling expenses decreased by 11.53% year-on-year, administrative expenses fell by 9.19%, and R&D expenses dropped sharply by 40.15%. In the first quarter of 2026, the company resumed investment in online channels, causing its selling expense ratio to increase by 6.2 percentage points year-on-year, while net profit attributable to shareholders fell 11.62% year-on-year. In 2025, Byhealth's non-GAAP net profit margin was 10.95%, a significant decline from before 2023. Its return on equity (ROE) has slumped from double digits in previous years to 7.04%, indicating that profitability has yet to recover.

The consecutive performance decline stems from channel transformation. Pharmacies are Byhealth's traditional core channel. Byhealth once achieved rapid growth by leveraging chain pharmacies, becoming the market share leader in both online and offline channels domestically by 2019. However, since 2024, factors such as reduced offline foot traffic, healthcare reform compressing the health supplement consumption scene, and price transparency in online channels have led to a sharp contraction in offline channels. In 2024, domestic offline revenue decreased by 31.98% year-on-year, and it continued to slide by 19.34% in 2025. The number of distributors has also significantly decreased. Meanwhile, online channels have not fully taken over. In 2025, the company's online revenue was 1.253 billion yuan, accounting for about 20% of total revenue, but it only grew a meager 2.54% year-on-year, effectively stalling. Byhealth is now in a transition period. Whether it can successfully complete product iteration and innovation, break the bottleneck of lacking blockbuster products, and achieve rapid growth in new channels like interest-based e-commerce and international markets will determine whether it can navigate through this current operational pain period.