Weiguang Bio's first-half 2026 earnings underscored the deepening correction in China's blood products industry, with revenue falling 13.33% year on year to 449 million yuan and net profit attributable to shareholders dropping 58.77% to 44.39 million yuan. Net profit after deducting non-recurring items fell 59.22%, while operating cash flow deteriorated to negative 115 million yuan from positive 39.59 million yuan a year earlier as taxes paid climbed more than 40%. The company said results were hit by industry cyclicality, intensifying competition and a value-added tax adjustment. Under the 2026 policy change, the simplified 3% VAT rate for ordinary biological products was abolished from Jan. 1, with such products shifting to the standard 13% taxation method, a change that industry tax specialists say is directly pressuring profits and cash flow. Weiguang Bio's core blood products revenue fell 17.07% to about 369 million yuan. Human serum albumin and intravenous immunoglobulin, which together account for more than 30% of revenue, generated 160 million yuan and 173 million yuan respectively, down 17.25% and 7.87%. At the same time, inventory rose to 1.01 billion yuan by the end of the first half, reflecting a broader supply-demand mismatch as hospital demand comes under pressure from centralized procurement, DRG/DIP payment reform and medical insurance cost controls. The pressure is not limited to Weiguang Bio. Tiantan Bio and Pailin Bio also warned of sharply lower first-half profit, both citing the tax change among key reasons. Even so, Weiguang Bio is moving forward with a 1.5 billion yuan private placement to fund a smart manufacturing base that would lift annual plasma processing capacity to 1,200 tons, a strategy that highlights the tension between long-term industry consolidation bets and near-term concerns over excess capacity and weak demand.