Financial Services Association, May 5 (Reporter He Fan) Catalyzed by various factors, the medical and aesthetic market recovered to a certain extent in the first quarter, and among listed companies, whether midstream medical and aesthetic institutions or upstream producers, their performance has steadily improved since this year. Some industry experts analyzed the Financial Services Association reporter that the medical and aesthetic industry is in a climbing period, and the end of this year may usher in a marked improvement. Furthermore, due to its advantages such as safety and short recovery period, injectable light medicine is still highly sought after by consumers, but as hyaluronic acid racetracks become increasingly crowded, can recycled materials that have risen to prominence in recent years take over and become the next star material?

The market is picking up, and listed companies are once again in the medical and aesthetic field

Thanks to the “small peak” brought about by the Spring Festival holiday, combined with the general background of market recovery and consumption recovery, there was a marked increase in passenger traffic in the medical and aesthetic industry in the first quarter of this year.

Chongqing Puri Medical's aesthetic consultant Xiang Enxi said in an interview with a reporter from the Financial Association that the agency's performance has grown steadily since this year. In particular, it was very busy around the Spring Festival. The medical and aesthetic programs for the week before the holiday were fully scheduled every day, and the scene was extremely popular.

Consumers followed one after another to bring good results to medical and aesthetic institutions. According to a quarterly report, Langzi Shares (002612.SZ) had revenue of 1.4 billion yuan, an increase of 11.42% compared with the same period last year; net profit was 82.1717 million yuan, an increase of 15.83% over the previous year.

In addition, Langzi Co., Ltd. continues to expand in the medical and aesthetic field. On February 28, Langzi Medical Management, a wholly-owned subsidiary of the company, plans to acquire shares in Jimei, Zhengzhou for a total of 155 million yuan in cash. After the equity transfer is completed, Beijing Langzi Medical Management will hold 100% of the shares in Jimei, Zhengzhou. According to reports, Jimei, Zhengzhou specializes in medical and aesthetic services. As of the evaluation reference date of December 31, 2023, the total equity book value of Zhengzhou Jimei shareholders was -293.452 million yuan, the assessed value was 155 million yuan, and the assessed value added was 184 million yuan. This transaction constitutes a related transaction.

The high performance brought about by the increase in in-store treatment customers was also conveyed to upstream product manufacturers. The net profit of the “Three Musketeers of Medicine and Aesthetics” all increased by more than 20% year-on-year in the first quarter. Among them, Ameke (300896.SZ) achieved total operating revenue of 808 million yuan, an increase of 28.24% year on year, and net profit to mother of 527 million yuan, an increase of 27.38% year on year. Huaxi Biotech (688363.SH) achieved revenue of 1,361 billion yuan, up 4.24% year on year, and net profit of 243 million yuan, up 21.39% year on year. Haohai Biotech (688366.SH) achieved operating revenue of 646 million yuan, an increase of 5.68% year on year, and net profit of 97.5415 million yuan, an increase of 20.16% year on year.

In the first-quarter results forecast, Ameke attributed the increase in performance to the increase in medical and aesthetic terminal consumption and the increase in the company's product brand influence. Furthermore, the company's gross margin and expense ratio remained at a stable level. Meanwhile, Haohai Biotech believes that it is because high-margin hyaluronic acid products have continued to have a good sales momentum, and shipments have continued to rise.

Mei Hexiang, founder of Chapter 14 and founder of Futu Medicine, said in an interview with a reporter from the Financial Association that as the market gradually became educated, people's anxiety about their appearance increased, or the lipstick effect became a medical and aesthetic effect. This year's medical and aesthetic market is better than last year. Currently, the medical and aesthetic industry is in a period of rapid growth. Since the consumer base in the medical and aesthetic field is generally low, and medical and aesthetic projects and technology still have a lot of room for development, the market may develop faster and be full of potential in the future.

Mei Hexiang told the Financial Federation reporter that as the economic environment recovers, higher consumer demand will increase, and demand for medical and aesthetic products will also increase. However, the process of moving back and forth does not happen overnight; there may be a long or short recovery period. This does not mean that it will immediately be possible to recover to a relatively good level in the second half of the year; it is likely that the improvement will not be obvious until the end of the year.

Injectable light medicine is still popular. Will recycled materials take over hyaluronic acid?

Currently, injectable light medical aesthetics, including fillers, such as hyaluronic acid, botulinum toxin, etc. are highly popular products.

Xiang Enxi told the Financial Federation reporter that her institution, as an example, initially started with surgery, but after serving more and more customers, the disadvantages of surgery became more obvious: large wounds, long recovery periods, safety hazards, and irreversibility. These post-operative problems are a huge risk for customers, so the agency began a transformation in 2019 to enter the field of aesthetic facial sculpting, and it mainly relies on injections to achieve natural and advanced results. The injectable materials currently on the market are mainly hyaluronic acid, botulinum toxin, recombinant collagen, and recycled materials that have become popular in mainland China in recent years.

Dr. Meng, a medical and aesthetic agency in Chengdu, said bluntly in an interview with a reporter from the Financial Federation that now there are many hyaluronic acid injection products on the market, and competition for hyaluronic acid products, a heavyweight player in the medical and aesthetic market, has heated up.

Senior aesthetic designer Zhu Yingying revealed to the Financial Federation reporter: “Among fillers, hyaluronic acid is the most widely used, starting with microplastic surgery, and now there are many varieties. Whether future prices and gross margins will change depends on the quality of the medical and aesthetic market, consumer demand, and aesthetic trends.” Furthermore, it added, “Recycled materials have been used in Taiwan since a long time ago. Compared to hyaluronic acid, they are more stable in terms of facial shaping and morphology, and are less prone to steaming. As medical and aesthetic knowledge is popularized and design concepts are upgraded, the audience for recycled materials will grow larger and larger. Many hyaluronic acid manufacturers have seen a broad future market for recycled materials and have begun to enter this field.”

Currently, the market share of medical and aesthetic regenerative injections in China is basically “three parts of the world”, namely Ai Weilan of Shengbomar in Changchun, Wet White Angel of Aimeike, and Yi Yanshi of Huadong Pharmaceutical (000963.SZ). Meanwhile, in July 2023, Aimeike also launched a new medical and aesthetic regenerating injection, such as Angel, which focuses on firming and softening facial contours, and differentiates and complements the outer contour support and inner contour highlighter of Wet White Angel.

On January 22, AestheFill beauty acupuncture, represented by Jiangsu Wu Zhong, was approved and is expected to be officially sold in mainland China in the first half of this year. On April 23, the company held a press conference for AestheFill's launch agency. A medical and aesthetic industry practitioner revealed to the Financial Federation that AestFill has just gone public and has not yet been fully rolled out, and the pricing may be about the same as Avellan. Competition for similar products is the greatest benefit for consumers.

In addition, Sihuan Pharmaceutical (00460.HK) reached a cooperation with Blue Crystal Microbiology in 2022 and set up a joint venture to jointly develop regenerative medical materials including PHA microspheres and bio-manufactured regenerative medicine materials.

Mei Hexiang, on the other hand, told the Financial Federation reporter that in addition to recycled materials, better technology may appear, which will last longer and be safer. There are indeed some new materials on the way now, such as long-lasting PRPA, microspheres, and materials that last longer than PRP. As technology content increases and technology advances, the price of future products will not decrease.