“Investors Network” Jordan

How profitable can a woman's face business be? From 2014 to 2023, Aimeike (300896.SZ), a “women's Maotai”, achieved leaps and bounds in performance by relying on products with a unit cost of only 20 to 30 yuan. The revenue scale increased from 75 million yuan to 2.9 billion yuan, and net profit also climbed from 28 million yuan to 1.9 billion yuan.

Although the beautiful economy is attractive, the capital market is not an easy path. Aimeike went public with an overfunding of 1.5 billion yuan. At the beginning of its listing, it was enthusiastically sought after by the market, but now its market value has shrunk drastically, falling to more than 220 billion yuan. Less than four years after listing, investors' confidence and expectations are constantly being lowered, and some fund-raising projects have been postponed over and over again. Aimeike's former market value of 100 billion dollars seems to be out of reach.

Aimeike stock price chart

The market capitalization has shrunk by more than 200 billion dollars

Since its successful listing in September 2020, Aimeike's capital market performance and financial situation have always received market attention. The company's issuance price was set at 118.27 yuan/share. The original plan was to raise 1.9 billion yuan. The actual market performance exceeded expectations. In the end, it achieved a net fundraising amount of 3.4 billion yuan, which exceeded 1.5 billion yuan. This not only brought sufficient capital reserves to the company, but also brought considerable benefits to its sponsor, CITIC Securities. According to the public prospectus information, the total cost of listing and issuance is about 140 million yuan, of which underwriting and sponsorship costs account for 100 million yuan.

Shortly after listing, Aimeike's stock price once showed a strong growth trend. On February 18, 2021, the company's stock price hit an all-time high of 1,331 yuan/share (after exclusion, the stock price below is also based on this), and the market value once reached 287.5 billion yuan. However, this upward trend did not continue. The company's stock price experienced sharp fluctuations in the following month and fell to a low of 359 yuan on March 25, 2021. Although the stock price has since recovered, it has failed to return to its previous high. As of April 16, the market value of Ameke had fallen to 64.5 billion yuan, down about 220 billion yuan from its highest point.

It is worth noting that Aimeike's fundraising project is not progressing as well as expected. By the end of 2023, the completion progress of several fund-raising projects had remained at around 30%.

In particular, the “Implantable Medical Device Production Line Phase II Construction Project” has gone through two delays. It was originally scheduled to be completed in December 2022, then postponed to December 2024, and has now been further extended until December 31, 2026. The date of use of the genetically-recombinant protein R&D and production base construction project has also been extended from December 2023 to December 2025. This situation deserves close attention from the market and investors to assess its possible impact on the company's future development.

In stark contrast to stock price fluctuations, Aimeike's performance has maintained steady growth. According to the financial report issued by the company, in 2023, Aimeike achieved revenue of 2.9 billion yuan and net profit of 1.9 billion yuan, an increase of 48% and 47%, respectively.

Entering 2024, Aimek will continue to maintain the momentum of performance growth. The revenue for the first quarter is expected to be between 803 million yuan and 826 million yuan, up 27.5%-31% year on year; net profit is expected to be between 510 million yuan and 534 million yuan, up 23% to 29% year on year; net profit after deducting non-net profit is expected to be 513 million yuan to 537 million yuan, up 33% to 39% year on year.

Despite Ameke's continued growth in terms of performance, its stock price showed a puzzling downward trend. This makes people think deeply. What factors actually led to the emergence of this contrast phenomenon? What kind of twists and turns did Aimeike experience?

Single product structure

As a leading midstream enterprise in the medical and aesthetic industry, Aimeike has achieved remarkable results in the market, but the unity of its product structure is still one of the main challenges facing the company.

The company's core products are mainly concentrated in the field of non-surgical treatments, especially dermal fillers based on sodium hyaluronate. These products are widely welcomed by the market due to their convenience and safety. According to Frost & Sullivan's research report, Aimeike's market share in this field has been ranked first among domestic companies for many years since 2018, and the gross margin is extremely high.

According to the sales data disclosed in the 2023 report, it is estimated that the average sales price of Aimeike's gel injection products and solution injection products is about 1,158 yuan and 325 yuan respectively, with gross margins as high as 97% and 94%, respectively. The company's downstream customers are mainly medical institutions. This price is the price given by the company to sales agencies, and the actual unit cost is lower. According to Aimeike's prospectus, the unit cost of Everly, Hi-Tee, and Yimei is between 20 and 30 yuan.

In the terminal market, the price of the product varies depending on the medical institution and region. For example, at Yestar Art Star Plastic Surgery on Hongqiao Road in Shanghai, the price of 1ml Hi-Body Panda is 2,950 yuan, and the 1.5ml Hi-Body Neck Wrinkle Remover is 1,250 yuan. At Smart Beauty and Medical Cosmetology (Lujiazui Hospital), the price of 1ml Hi-Body Panda is 3,900 yuan, and the 1.5ml Hi-Body Neck Light Line is 2,900 yuan. NewFace NewFace Medical Beauty Xingcan (Pudong Store) sells for 1,142 yuan for the 2.5ml Hi-Body, and the price for 1ml Hi-Tee Panda is 1950 yuan. Of course, this price also includes doctor's injection costs, service costs, and terminal profits at medical and aesthetic institutions.

Although Aimeike has launched many popular products, such as Hi Body, Avray, Yimei, etc., and launched the innovative product Wet White Angel in 2021, the company's product line still mainly relies on dermal fillers based on sodium hyaluronate. This dependency is also reflected in financial data. The operating income of gel injection products and solution injection products accounts for most of the company's revenue. In 2023, the company's two products together accounted for about 98%.

However, the uniformity of the product structure makes Aimeike face greater market risks. If existing products are adversely affected by production, sales, or market conditions, it may have a significant impact on the company's operating performance. The company also clearly indicated this risk in its prospectus and stated that it is seeking solutions through R&D investment and new product development.

Currently, Aimeike is developing new products, including injectable botulinum toxin type A, liraglutide injections, and lidocaine butacaine cream, etc., but these products are still in the registration or clinical trial stage, and future market performance and consumer acceptance are still to be seen.

According to a research report released by Guoxin Securities on April 9, Aimeike faces the risk that the medical and aesthetic consumption boom falls short of expectations, product development progress falls short of expectations, new product promotion falls short of expectations, and increased competition in the industry. As a result, the company's net profit forecast for 2024-2026 was lowered to 2,501 billion yuan, 3.277 billion yuan, and 4,093 billion yuan, respectively, down from the previous forecast.

The actual controller “cashed out” all the way

Since the launch of Aimeike, the “cash out” behavior of its executive team has been the focus of continuous market attention. According to Huashun iFind data, Aimeike's annual dividend amount is rising year by year, accounting for a considerable proportion of net profit. In particular, in 2020, the company's dividend amount accounted for 95.67% of the current net profit to mother, almost all of that year's net profit. Since its launch, Aimeike has accumulated 4 dividends, with a total amount of 1.88 billion yuan.

Behind this dividend strategy, the interests of the actual controller, Jian Jun, attracted particular attention. According to Dongcai Choice data, Jian Jun's shareholding ratio increased slightly from 30.96% at the end of 2020 to 31.05% at the end of 2023. Based on this shareholding ratio, Jian Jun received nearly 600 million yuan in cash income through dividends over four years.

At the same time, Aimeike's shareholder structure is also undergoing subtle changes. According to data from Tonghuashun iFind, since October 2021, company director Wang Lanzhu has reduced his holdings by a total of 10 times, and the shareholding ratio has dropped from 3.63% to 3.04%. Furthermore, the shareholding ratio of GannettPeak Limited, the former third-largest shareholder, also dropped significantly from 5.99% to 3.22%. The reduction in holdings by these important shareholders has undoubtedly heightened the market's concerns about the future development of Aimeike.

Although the “cash out” behavior of Jian Jun and important shareholders has brought them rich economic returns in the short term, it poses a potential threat to the company's stable development in the long run. Frequent cash outs make the market question whether Aimeike pursues short-term interests too much while ignoring the company's long-term value.

However, looking back at Jian Jun's entrepreneurial history, we can see the image of a female entrepreneur with vision and courage. In his early years, Jian Jun worked for China Grain, Oil and Food Import and Export Corporation. In the midst of the boom in going abroad in the 1990s, I resolutely decided to quit a stable job within the system and began a 13-year overseas career.

In 2003, Jian Jun saw the magical effects of hyaluronic acid with his own eyes and decided to return home to start a business. She sees the huge potential of the medical and aesthetic market, and believes that through independent R&D and production, foreign companies' monopoly on the Chinese market can be broken. Under her leadership, Aimeike successfully developed the first injectable hyaluronic acid medical device for facial soft tissue repair in China.

In addition, Jian Jun is also involved in the venture capital industry. On November 27, 2023, Beijing Quality Peptide Biomedical Technology Co., Ltd. (hereinafter referred to as “Plastitide Bio”) announced the completion of a B+ round of financing of nearly RMB 200 million. People who love the US have appeared in the lineup of investors. Industry insiders believe that by investing in peptides, Aimeike is expected to seize the weight loss gold market.

Today, Aimeike has become a leading enterprise in the medical and aesthetic industry, and its market position and influence are self-evident. However, in the face of market questions and falling stock prices, how the company can guarantee shareholders' interests while promoting the long-term development of the company will be an important issue they will need to face in the future. (Produced by Thinking Finance) ■