Beauty economy "continues to make great efforts, and the medical and aesthetic industry is expected

2021-06-25 17:25

Everyone has a love of beauty, and so does the capital market.

Since this year, after a slight correction, the medical and American sectors have continued to be hot. In the eyes of insiders, high growth rate, high gross profit rate, low penetration rate and demand determination can almost be regarded as obvious labels in the medical and aesthetic field.

Now, the valuation of the concept of medical and aesthetic leading enterprises is quite high. Will it fall sharply as soon as there is any disturbance? In the opinion of fund managers, "from the perspective of sector research, the subject matter of consumption attributes will be easier to understand, and will have intuitive sensitivity in daily life. More importantly, they can grow in a long-term and sustainable manner. Whether a company or an industry, if its growth is stable, deterministic and sustainable, the market will give a high premium, which is why the valuation of some leading stocks in this track is not cheap."

Medical beauty track is favored

Medical beauty companies, represented by leading medical beauty companies such as Huaxi Biology, Aimeike and Landside, have become the darling of the capital market.

In the first quarter, the social security fund, Aifang all-weather No. 2 Phase E private equity investment fund, Shen Wanling Xinshengli Selection, and Gaoyi Linshan No. 1 Yuanwang Fund were among the top ten circulating shareholders of Huaxi Biology. On June 4, Huaxi Bio disclosed the fund research information. Among dozens of research institutions, Ruiyuan Fund, Gaoyi Assets, Dongfang Harbor and other well-known institutions appeared one after another.

Similarly, Amigo, with rapid growth in performance, also attracted Guangfa Healthcare Fund and ABC Huili Healthcare Fund to join its top ten circulating shareholders in the first quarter. In the list of top ten circulating shareholders in the first quarter of Longzi, another leading medical beauty company, Dacheng Fund's "GEM Two Year Fixed Open Hybrid A" was listed with 2.29 million shares.

Outstanding performance

From the demand side, medical beauty is a typical consumption upgrading industry with high unit price. According to the statistics of iResearch Consulting, the market size of medical beauty in China was 64.8 billion yuan in 2015, an increase of 176.9 billion yuan in 2019, with a compound annual growth rate of 29.8%. Although affected by the epidemic situation, the domestic medical beauty market will grow by 11.6% in 2020, with a market scale of 197.5 billion yuan.

The performance of relevant stocks can also confirm the "potential" of this track from the side. Taking Huaxi Bio, a leading medical beauty company, as an example, the company achieved an operating income of 777 million yuan in the first quarter, a year-on-year increase of 111.12%; The net profit attributable to the parent company was 152 million yuan, up 41.05% year on year. Another medical beauty leader, Aimeike, achieved a revenue of 259 million yuan in the first quarter of this year, up 228% year on year; Net profit attributable to the parent company was 171 million yuan, up 296% year on year; The net profit attributable to the parent company after deducting non profits was 162 million yuan, a year-on-year increase of 303%.

Harbin Sanlian, which is mainly engaged in medicine and cosmetics, has an amazing growth in performance. Its profitable business is the manufacturing of freeze-dried powder, accounting for 41.23% of the company's profits. The company achieved a net profit of 563.3 million yuan in the first quarter of this year, up 1661% year on year.

Shen Xuefeng, manager of Huatai Perry Fund, said, "Medical beauty is the combination of 'medical' and 'beauty'. The industry is driven by consumption, and the ceiling is higher. With the improvement of the concept, medical beauty has entered the life of ordinary people. Any consumption that can meet the needs of ordinary people will have a lot of space. The medical beauty track is expected to rival ophthalmology and dentistry, and become the next super long growth track."

It is worth noting that the Medical and American Raceway has been under the pressure of high valuation recently. Take the American customer as an example, many entry bosses have made a 180 degree turn in their attitudes towards him. Compared with the 2020 annual report and the first quarterly report of 2021, Ge Weidong withdrew from the list of top ten shareholders of Amico's circulating shares, and the Guangfa Small Cap Growth and Guangfa Double Engine Upgrade managed by Liu Gesong also withdrew from the list of top ten shareholders of Amico's circulating shares. Funds such as CITIC Securities dividend value, Morgan Stanley, Ping An Life Insurance, Huatai Berry Quality, and Huitianfu's middle cap value also disappeared from the list of top ten shareholders of circulating shares.

The high profile of the industry will continue

From the perspective of medical beauty project penetration rate (the rate of receiving medical beauty treatment courses per thousand people), according to the data of iResearch, the medical beauty industry in China has a considerable gap compared with mature markets such as Japan, the United States and South Korea. In 2019, the penetration rate of medical beauty projects in China was only 3.6%, which is far from the level of 11.0% in Japan, 16.6% in the United States and 20.5% in South Korea.

Tan Xiaobing, the fund manager of the Equity Investment Department of Great Wall Fund, said that the medical and aesthetic industry chain is very long, including the upstream product end, midstream medical and aesthetic institutions and downstream Internet platforms. The product side also includes injection and photoelectric instruments. In contrast, injection products have obvious advantages. On the one hand, the industry threshold is high, and leading companies have significant advantages in starting first. The sales of injection products need three types of medical device certificates, and the products sold overseas by foreign investors also need three types of medical device certificates if they want to sell in China. However, the approval of this certificate generally takes 3-5 years or more, and the industry threshold is high. Once the first mover successfully develops star products, the time cost for other peers to catch up is high. On the other hand, there are many subdivided demands for injection products, including hyaluronic acid, botulinum toxin, needle, collagen, etc., such as botulinum toxin, collagen, needle and compliant water light needle, which are still in the blue ocean market in China, and the enterprise has a very broad development space.

Xiangcai Fund believes that among many consumer segments, consumption behavior with social attributes is more attractive, so medical beauty and cosmetics consumption related to beauty economy can be compared with Baijiu consumption to a certain extent. At present, the domestic medical and aesthetic industry has a market scale of more than 300 billion yuan. The upstream brands of the industrial chain have strong profitability and a high degree of standardization. The linkage rate of medical and aesthetic institutions in the downstream of the industrial chain is still low. The demand for medical beauty is characterized by diversification, the cost of obtaining customers is high, and the head mechanism has huge growth space. Recently, the regulatory authorities have strengthened the compliance supervision of medical beauty institutions, which is conducive to the development of compliant medical beauty terminals and compliant medical beauty products. At present, the proportion of compliant institutions and non compliant institutions in the market is half and half. The domestic cosmetics industry has a market scale of more than 500 billion yuan. With the improvement of domestic consumer awareness and the rapid growth of China-Chic brand, some brands have a clear growth path for a long time with the help of functional skincare racetracks.