Blue Whale Finance Tu Jun

On April 3, Aimeike (300896.SZ), known as “Medicinal Beauty”, plummeted 7.21%; on April 8, it fell 9.25% again. There are market rumors that its first-quarter results may fall short of expectations.

After two consecutive days of sharp decline in the secondary market, on the evening of April 8, Aimeike released its performance forecast for the first quarter of 2024. It is expected to achieve operating income of 803 million yuan to 826 million yuan, an increase of 27.5% to 31% over the previous year; to achieve net profit of 510 million yuan to 534 million yuan, an increase of 23% to 29% over the previous year.

Although revenue and net profit continued to grow, the performance growth rate for this quarterly report declined due to the 47.99% year-on-year increase in net profit compared to 2023; the 47.08% year-on-year increase in net profit, or the performance growth rate of 66% and net profit of 64% in the first quarter of last year.

Aimeike told Blue Whale Finance that the company has its own operating rhythm. Stock prices fluctuate in the short term, and eventually they will return to long-term value and embrace core assets. Stock prices are affected by multiple factors such as changes in the overall valuation center of the market and market sentiment. From the perspective of penetration rate and market share, Aimeike is still growing healthily and continuously.

The growth rate of the core product Hi Body is slowing down, and Wet White Angel is facing competition from Huadong Pharmaceutical and others

In September 2020, Aimeike successfully entered the A-share market. After the successful listing, Ameke's stock price rose from an issue price of 118.27 yuan/share to 837.7 yuan in 2021, with a market capitalization of over 100 billion dollars. At the same time, it was called “medical beauty” in the secondary market with a gross sales margin of up to 95.3% and a net sales margin of 65.23%.

However, judging from its secondary market performance, up to now, its stock price has directly fallen by about 70% from the highest point in 2021, and its market capitalization is 62.99 billion yuan, far from the peak of 122.352 billion yuan.

Currently, there is widespread concern in the industry that its core product “Hi Sport” is growing slowly, while the new product “Wet White Angel” is facing multiple competition.

Aimeike's current products include four categories: solution injection products (Hi Body, Yimei), gel injection products (Wet White Angel, Bonita, Yimei Plus 1, Avray, etc.), facial implants, and cosmetics. Among them, Hi-Tech has always been the core product of Aimeike. This product focuses on the neck line repair segment. After being launched in 2017, sales reached 74.9726 million yuan in 2018, an increase of 119.69% over the previous year.

However, in the past, Aimeike also fell into the question of relying too much on the “Hi Body” single product line. According to Aimeike's financial report, from 2020 to 2023, solution injection products, mainly Hi-Tec, achieved revenue of 447 million yuan, 1,046 billion yuan, 1,293 billion yuan, and 1,671 billion yuan respectively, with year-on-year increases of 82.85%, 133.84%, 23.57%, and 29.22%, respectively.

While revenue from solution injection products is growing steadily, the growth rate began to decline in 2022. Aimeike said that the decline in growth was due to the previous high base.

A number of medical and aesthetic industry practitioners told Blue Whale Finance that at present, neck wrinkles are often removed using Hi-Body, and other materials, such as collagen or polylactic acid, can also be used. The rest, including gold microneedles and Thermage, are different principles.

After Hi-Tei, Aimeike launched a new product “Wet White Angel” in 2021. This product is regarded as Aimeike's second growth curve, and it also broke the “Yihi supports half the sky” product model that had been questioned until now.

According to the 2023 Aimeike financial report, the revenue of gel injection products, mainly “Wet White Angel,” increased by 81.43% over the previous year, accounting for 40% of total revenue from 32.91% in 2022; while the revenue share of solution injectable products, mainly Hi-Body, fell to 58.22% from 66.68% in 2022.

Wet White Angel is a filling product with the ability to activate its own collagen regeneration. It can achieve natural and long-lasting shaping and lifting effects. It can be used to fill and shape areas such as the nose and lips. It is one of only three compliant regenerating injections currently available in China.

However, “Wet White Angel” is also facing direct competition from the same category, including Huadong Pharmaceutical's “Girl Acupuncture” and “Child Skin Acupuncture” from Everland, a brand owned by Changchun Shengboma Biotech.

Expanding a new growth curve, but facing challenges

Some industry insiders pointed out that the decline in stock prices reflects the market's concerns about the slowdown in the growth rate of their core products, which will affect medium- to long-term growth, and the best solution for enterprises is to continuously launch new products, enrich their product portfolios, and avoid the risk of a single product.

In recent years, American customers also seem to be constantly looking for new growth points. According to its 2023 financial report, R&D investment accounted for 8.72% of revenue in 2023, and R&D investment increased by 44.49% year on year. In the past two years, it has been deployed in fields such as collagen, botulinum toxin, and photoelectric anti-aging instruments.

Take botulinum toxin as an example. As early as 2018, Aimeike cooperated with Korea's HG (Huons Global Co. , Ltd.) , signed a cooperation agreement for botulinum toxin type A products and obtained the rights and interests of the product in China. Aimeike is responsible for clinical trials and registration applications for this product within the Chinese region, and plans to invest 120 million yuan. In 2021, Aimeike invested 8.56 in Korea's HBP Huons BioPharma Co. , Ltd., with a shareholding ratio of 25.42%. According to Aimeike's 2023 earnings report, its injectable botulinum toxin type A to improve lines between eyebrows is in the registration reporting stage.

In January 2024, Aimeike replied on an interactive platform: South Korea's Huons BioPharma Co., Ltd. promised and guaranteed in the “Distribution Cooperation Framework Agreement” signed with Aimeike on May 20, 2022, that the price of botulinum toxin products provided to Aimeike is the lowest price in the world. The sales price of this product in the Chinese market will not be determined until the product is approved for sale.

Botox and hyaluronic acid are the two most commonly used injectable materials in non-surgical aesthetic programs.

In 2017-2022, China's botulinum toxin products market grew from 1.9 billion yuan to 6.5 billion yuan, with a compound annual growth rate of 27.9%. It is estimated that in 2023, China's botulinum toxin products market will reach 8 billion yuan, an increase of 23.08% over the previous year.

However, at present, 4 botulinum toxin products have been approved in the Chinese market, namely “Hengli” from Lanzhou Biotech in China, “Botox” from Elgin in the US, “Gitis” from Ipsen in France, and “Le Tibau” from South Korea. In addition to Aimeike, there are also four other companies that are declaring botulinum toxin products to be approved, including Germany's West Malaysia, Korea's Big Bear Pharmaceuticals, Shanghai Fosun Pharmaceuticals, and Huadong Pharmaceutical.

As market participants gradually increase, competition on the Botox circuit will become increasingly intense.

In addition, diet pills represented by GLP-1 are also an important layout direction for Aimeike. During the reporting period, Ameke invested 50 million yuan to hold 4.89% of the shares in peptidebio to cooperate in the development of products such as simeglutide.

However, domestic research and development of diet drugs represented by simeglutide has also been seriously involved in domestic research and development. In terms of simeglutide generic drugs, the simeglutide injection from Hangzhou Jiuyuan, a subsidiary of Huadong Pharmaceutical, was the first domestic simeglutide biosimilar to enter clinical phase III; in addition, many companies, including Chongqing Paijin, Huisheng Biotech, and Qilu Pharmaceutical, have deployed simeglutide generics, and they have all entered phase III clinical trials.

Due to its high gross profit of more than 90%, Aimeike has always been known as the “Maotai for women,” and as the only Class III medical device product on the market that targets neck lines and has obtained NMPA approval, the market segment is pioneering and exclusive. However, judging from Aimeike's other product lines, this exclusivity or no longer exists, and is under pressure from many other competitors.