ANXIN International expects that the net income attributable to the parent company of Beautiful Countryside Medical Health (02373) will be 0.25 billion yuan, 0.32 billion yuan, and 0.37 billion yuan for the years 2024-2026 respectively.
According to the research report released by ANXIN International, they maintain a "buy" rating for Beautiful Countryside Medical Health (02373) and adjust the company's profit forecast based on the interim report. They expect the net income attributable to the parent company to be 0.25 billion yuan, 0.32 billion yuan, and 0.37 billion yuan for the years 2024-2026. In the first half of 2024, the company's revenue and net income attributable to the parent company were 1.14 billion yuan and 120 million yuan respectively, with the Women's Special Care Center achieving rapid growth. The company also acquired 150 direct-operated and franchised stores of Nairier, expanding its business territory to the Greater Bay Area.
Anxin International's main points are as follows:
The growth in revenue is driven by franchise stores and sub-healthy services, with the Women's Special Care Center's revenue increasing by more than 200% compared to the previous year.
In the first half of 2024, the company achieved a revenue of 1.14 billion yuan, a year-on-year growth of 9.7%, and a net income attributable to the parent company of 0.12 billion yuan, a year-on-year growth of 3.2%. Among them, the franchise and other business revenue of beauty and health services increased by 43.8% year-on-year, mainly due to the expansion of the franchise store network and the introduction of new equipment. The revenue of sub-healthy medical services increased by 50.0% year-on-year, mainly due to the rapid growth of the Women's Special Care Center business. The gross margin increased slightly by 0.9 percentage points to 47.0%, which is attributed to the increase in revenue and scale effect brought by the growth in customer flow.
The number of stores continues to increase, and customer flow and active members are growing against the trend.
As the number one brand in China for beauty and health services, and the fourth largest brand for non-surgical medical beauty services, the company has surpassed 559 stores (including Nairier). Among them, there are 169 directly operated stores and 207 franchise stores for beauty and health services, 24 directly operated stores for medical beauty services, and 9 directly operated stores for sub-healthy medical services. In addition, benefiting from brand influence, high-quality service, and strong customer operation capability, the company is growing against the trend, with an increasing number of in-store customer flow and active members. The customer flow of directly operated stores reached 0.68 million people, a year-on-year increase of 12%, and the number of active members reached 0.082 million, a year-on-year increase of 10%. At the same time, the retention rate of active members in directly operated stores remains high at 79%.
Acquisition of Nairier to expand business scope.
In the first half of the year, the company acquired a total of 150 Nairier direct-operated and franchised stores, covering the main locations of shopping centers/community centers in the Greater Bay Area with high customer traffic. Nairier, based on traditional Chinese medicine culture, advocates an Eastern beauty and nurturing concept of "according to the time, the situation, and the person", providing beauty and health services, medical beauty services, and sub-healthy medical services. It complements the existing business of Beautiful Countryside and enhances scale and efficiency.
Risk warning: policy risks; risks of store expansion falling short of expectations; fluctuating epidemic situation; intensified industry competition; slower-than-expected post-epidemic consumption recovery.
