Financial Services Association, July 3 (Reporter He Fan) Is there a significant trend of the summer medical and aesthetic peak being “leveled off”? Recently, a reporter from the Financial Services Association visited a number of medical and aesthetic institutions that were supposed to be in the “peak sales period,” and found no “hot” phenomenon. Industry insiders expect that this summer medical and aesthetic industry may continue the “lackluster” trend of last year. There will be a certain increase in the number of consumers, but the increase is not obvious. Furthermore, the differentiation in institutional performance may intensify.

Industry experts told the Financial Federation reporter that excessive development of customers by institutions is one of the reasons for this phenomenon.

From a corporate perspective, many companies have indicated that the summer medical and aesthetic sector's performance is relatively stable every year, and there will be no major ups and downs.

“Sales have always been relatively stable.” Botox is the main ingredient for slimming shoulders and legs, and is very popular during the summer. In addition to the five products already on the market, more and more “players” are entering this field, including “cross-border” companies. Some companies believe that dermatology has good prospects and are planning to try it out.

The increase in the number of summer student consumers is not significant

“During the summer, just after the college entrance examination, there were a lot of customers.” Dr. Meng, who specializes in skin injections, revealed in an interview with a reporter from the Financial Federation. As soon as the summer season began, some medical and aesthetic clinics introduced preferential policies for the student population: all patients who come to the hospital with a student ID to treat acne can enjoy a 20% discount on treatment costs. If admitted to a double top university, they can enjoy a 25% discount on treatment costs with an acceptance letter.

A reporter from the Financial Services Association reported last year that some experts said that due to factors such as tourism, the medical and aesthetic market did not reach the level of popularity in 2022. It is expected that the performance of large summer institutions will increase year over year, but small and medium-sized institutions may remain flat or even decline.

The time has come for summer this year. Has there been a significant increase in the number of medical and aesthetic consumers compared to last year? A CIFA reporter recently visited a number of medical and aesthetic institutions in Chengdu.

A staff member of a medical and aesthetic agency under a listed company said in an interview with a reporter from the Financial Association that generally speaking, the consumer base of summer students will increase. Looking at this year, there has been some increase in summer students, but the overall increase is not obvious. Generally, surgical programs such as eyelid cuts and rhinoplasty are carried out. In addition, there are also many orthodontic, face-lift, and acne treatments. Products such as shoulder and leg slimming needles are very popular in summer.

Referring to the reason why the number of summer consumers has not increased much, the staff member said, “The recovery period from surgery is relatively short now, and it can be done at any time. Also, the student population isn't the core of an institution like ours; we're still relatively expensive.”

A reporter from the Financial Services Association visited Jingskin Medical and Aesthetic located on Hongxing Road in the center of Chengdu. The brand is a medical and aesthetic chain owned by Langzi Co., Ltd. (002612.SZ). On site, it was seen that compared to around the Spring Festival, the summer market was considered “deserted”. Apart from the reporter, only one customer was waiting for treatment at the front desk. The sales staff said that there will be no significant increase in the number of consumers during the summer vacation at their agency, because the agency mainly engages in light medical and aesthetic treatments such as hyaluronic acid and water light acupuncture, and the recovery period for such programs is very short.

Meanwhile, at another private medical and aesthetic clinic, the Financial Services Association reporter observed that only 5 or 6 customers visited within an hour. Apart from regular customers, most of them came to inquire about group buying events that saw discounts on third-party platforms such as Meituan.

Lin Ying, CEO of Chengdu Meitu Technology, told the Financial Federation reporter that the overall business volume of the summer market has not increased significantly this year; it is likely that consumers are not very willing to spend; secondly, excessive institutional development has caused the small cycle to cover the big cycle. Agencies push packages from time to time to lock in customers, shortening the customer development cycle. Once this frequency increases, it will affect the performance of the so-called big cycle of summer.

Institutional performance is fragmented or intensified

Regarding the performance of different types of institutions this summer, Dr. Meng revealed to the Financial Federation reporter, “The established institutions are doing well this summer. The medium-sized institutions are running along, and the small ones have declined sharply.”

How are the summer performance of companies in the medical and aesthetic sector? As an investor, the Financial Services Association reporter called some companies in the medical and aesthetic business to learn about the changing trends in the summer performance of medical and aesthetic companies since the optimization of the epidemic policy. Many companies, including Jin Jin Rabi (002762.SZ), said that the performance of the medical and aesthetic sector of summer companies remains flat every year, and there will be no major ups and downs.

“Overall, the summer medical and aesthetic business market is in line with the characteristics of previous years.” Suning Global (000718.SZ) staff revealed that the company will open a new medical and aesthetic flagship store in Nanjing in the next few months, and will later consider choosing cities with strong spending capacity to set up new medical and aesthetic institutions in the Jiangsu, Zhejiang, and Shanghai regions.

ST Beauty Valley (000615.SZ) securities department staff said that during the summer, some students or college students who have completed the college entrance examination will come to work on some projects, but it is not ruled out that some projects may require high UV protection requirements after completion. Some people will not do projects due to these concerns.

A staff member of the securities department of Langzi Co., Ltd. said that the summer tourist flow has its own characteristics, but this does not mean that the summer conference is at its peak. Looking at the whole year, it's probably better at the end of the quarter or before a major holiday. When asked if there is a clear upward trend in summer medical and aesthetic performance in recent years, the staff took a negative attitude.

Botox may accelerate internal volume after becoming “popular”

Dr. Meng said that in addition to eye and nose surgery, arm slimming and leg slimming are also popular summer programs. The principle of botulinum toxin is to cut off the connection between muscles and nerves, so that the muscles can no longer contract or move, so they slowly shrink. It's like cutting off the signal between mobile phones so that the two cannot be connected. Over a period of time, physical motor function weakens, and there are slightly more people who get botulinum toxin injections in summer.

Up to now, there are 5 botulinum toxin approved domestically, including domestically produced BTXA (BTXA), Allergan (Allergan), Ipsen (Ipsen)'s Jiji, Hugel (Hugel)'s Lotibao, and Siwei (Merz Aesthetics), which was approved in March of this year. Among them, Gaodemei and Sihuan Pharmaceutical (00460.HK) are distributors in China, respectively.

A staff member of the securities department of Langzi Co., Ltd. said that botulinum toxin products have been selling well throughout the year, and their sales volume has always been relatively stable.

Regarding the botulinum toxin market, Lin Ying believes that the future market will definitely expand, and may show a clear polarization between high-end and mass consumption. However, future performance mainly depends on consumers' desire to spend. In a situation where demand is insufficient recently, products that are more popular at popular prices are more popular.

In reality, more and more “players” are entering the botulinum toxin product market, including the “Three Musketeers of Medicine and Aesthetics.” On July 3, Ameke (300896.SZ) announced that the company recently received the “Notice of Acceptance” issued by the State Drug Administration, and that the company's application for the registration and marketing license for injectable botulinum toxin type A has been accepted. Haohai Biotech (688366.SH) has reached an equity investment and product licensing agreement with Eirion of the United States, involving two botulinum toxin products, ET-01 for external use, and AI-09, a classic injectable botulinum toxin product. Of these, ET-01 products have already carried out phase II clinical trials in the US. When asked about the progress of the AI-09 product, the company's securities department staff told the Financial Services Association reporter who called as an investor that was uncertain and needed to find out.

However, Huaxi Biotech (688363.SH) failed in the botulinum toxin project. On August 1, 2022, Huaxi Biotech officially terminated its seven-year cooperation with Korean botulinum toxin manufacturer Medytox, and lost Medytox's exclusive agency rights for botulinum toxin products in mainland China.

In addition, there are also companies that have “crossed borders” into the dermatology circuit. According to media reports, Lepu Healthcare (300003.SZ) plans to apply for IND products. The Financial Services Association reporter called the company's securities department as an investor. Staff said that skin products are a new business of the company, and the company's traditional business collection competition is fierce. Currently, dermatology sees good market prospects, and the company plans to try to open up new businesses. Referring to future plans for skin products, the staff said that doctors' technology and marketing are the core points of competition, and it is difficult to expand and seize the market.