Cover news reporter Xiong Yingying
Hair loss is becoming an anxiety for more and more young people, and just today, 250 million "bald" Chinese have won a public company.
On December 13, Yonghe Medical (02279), the "first share of hair transplantation", officially landed on the Hong Kong Stock Exchange at a price of HK$15.80 per share, rising more than 9% in the morning intraday, and then fell back. As of the close of the day, it was quoted at 16.6 yuan / share, up 5.06%, with a total market value of 8.63 billion yuan.
How big is China's hair transplant market?
250 million people lose hair, and the penetration rate of hair transplantation is only 0.2%
According to a survey by the National Health Commission, China's hair loss population reached 250 million in 2020, of which about 164 million were men and 88.6 million were women. China's hair loss population is expected to remain large in the coming decades and continue to increase to 258 million in 2030.
However, the number of people receiving hair transplantation services in China is relatively small compared to the number of people who actually suffer from hair loss. The data shows that in 2020, only 516,000 cases of hair transplantation surgery were carried out in China, and the penetration rate of hair transplantation was only 0.2%, and there was a huge market demand and growth potential.
It is based on this huge market demand that Yonghe Medical's business is getting bigger and bigger.
According to the prospectus, Yonghe Medical, founded in 2010, is a nationwide private hair transplant chain agency.
From 2018 to 2020 and from January to June 2021, the company's revenue was 934 million yuan, 1.224 billion yuan, 1.638 billion yuan and 1.053 billion yuan, respectively; its gross profit margin was 75.2%, 72.6%, 74.6% and 73.6%, respectively.
In 2020, the company's hair transplantation medical services achieved revenue of 1.413 billion yuan and a market share of 10.5%, ranking first in the industry, exceeding the sum of the second and third in the industry, and the cumulative number of hair transplant patients in 2020 exceeded 50,000.
At the end of 2017, Yonghe Medical acquired Sweeson's mainland business, a brand from London, England, focused on providing hair repair products and services. Since then, the proportion of the company's medical maintenance service revenue has continued to expand. As of the end of June 2021, its hair transplant medical services and medical maintenance services accounted for 75% and 24.1% of the revenue, respectively.
Planting intentions piled up by marketing
The three-year research and development expenditure is less than 30 million
Although the gross profit of planting is high, from the perspective of net interest rate, it seems that there is no imaginary profit. From 2018 to 2020, Yonghe Medical achieved net profits of 0.54 billion yuan, 0.36 billion yuan and 163 million yuan respectively, and the corresponding net profit margins were only 5.72%, 2.91% and 9.97%.
The reason why the net profit is not high may be the company's huge investment in marketing. During the reporting period, the company's sales and marketing expenses accounted for 49.6%, 53.1% and 47.6% of the revenue, respectively, which means that half of the camps are spent on advertising every year.
In 2020, the top five suppliers of Yonghe Medical are all promotion service platforms, and the procurement of products and services includes promotion services through online communities, search engine related advertisements, elevator display advertisements, etc. Among them, the amount of procurement from the company from the largest supplier reached 114 million yuan. There is also a supplier that provides search engine-related advertisements for Yonghe Medical, ranking in the top five for three consecutive years, with a total of 369 million yuan from the company in three years.
Although Yonghe Medical emphasizes that R&D is essential for the sustainable growth of the company's business operations. However, the company's R&D investment in the past three years was only 7.8 million, 8.8 million and 11.8 million yuan, accounting for 0.8%, 0.7% and 0.7% of the revenue of the year.
Founder Zhang Yu only has a junior high school education
Share the "Success Code" in the Listing Open Letter
Zhang Yu, the founder of Yonghe Medical, is 36 years old and only has a junior high school education. In 2001, Zhang Yu graduated from Dazhuang Junior High School in Si County, Suzhou City, Anhui Province, and entered the field of hair transplantation in 2005 and joined Beijing Chu Rong Fuyun Medical Beauty Clinic. In 2010, he founded the company and carried out his own hair transplant business under the brand name of "Yonghe".
It is understood that most of the traditional hair transplantation uses FUT technology, first extracting the follicular flap from the posterior brain, cutting and separating the hair follicle unit, and implanting it in the affected area, because the wound that needs to be sutured to extract the follicular flap usually leaves scars after surgery. However, in the same period, the United States has begun to use FUE technology, through the subtle device directly from the back of the brain to extract hair follicles, and then transplant the hair follicles to the area where they need to be planted, without sutures and stitch removal, the scalp can be automatically healed.
In 2008, Yonghe took the lead in introducing FUE technology and became the first batch of institutions in China to use this technology. According to media reports, at that time, in order to let the doctor practice his hands, Zhang Yu personally shaved his head as a "guinea pig", repeatedly tested for more than half a year, and the doctors finally mastered FUE hair transplantation.
On the same day as landing on the Hong Kong Stock Exchange, yonghe medical official WeChat released Zhang Yu's open letter, sharing his experience and feelings since he started his business.
"It's very important to be forward-looking and to maintain a keen sense of trends." Zhang Yu mentioned that when the hair transplant industry was full of small institutions, Yonghe took the lead in deciding to develop towards scale and regionalization, which can effectively control costs, improve operational efficiency and improve profitability.
He also mentioned that at present, the company has established a largest professional medical team of 1233 people, and good doctors are the key to the success of hair transplantation.
In recent years, with the continuous increase of per capita disposable income, the enhancement of self-awareness of appearance, the progress of hair transplantation technology and other comprehensive factors, China's hair transplant service market has grown from 5.8 billion yuan in 2016 to 13.4 billion yuan in 2020, with a compound annual growth rate of 23.4%, and it is expected that the scale will reach 75.6 billion yuan by 2030. In the face of the huge market, how will Yonghe Medical maintain its leading position in the future?