"I believe in hyaluronic acid more than marriage because it works every time." This is the classic line of Samantha, one of the heroines of the once-popular American drama "Sex and the City".
When the beauty of the economy is popular, medical beauty is naturally a big hit, and as the "woman's Moutai" hyaluronic acid leader Aimeike, since the listing in September 2020, the stock price has soared all the way, in less than a year, the market value level has achieved a jump of more than three times, standing on the historical high of 170 billion yuan, and then it has fallen all the way and adjusted so far. However, compared with the other two Bloomage Biology and Haohai Biotech of the "Three Musketeers of Medical Beauty", the valuation of Aimeike is still much higher after the correction.
Figure 1: The trend of the price-earnings ratio of the "Three Musketeers of Medical Beauty" Data source: wind 36Kr collation
With the correction of the stock price, the market's doubts about the high valuation of Aimek have intensified, and in the face of market doubts, this article tries to answer the following three questions in order to clarify the investment logic of Aimek:
What is the core driving force of amek product matrix?
Is Aimek's high-growth myth sustainable?
Now it seems that aimee is worth buying?
First, the hi body supports most of the amek
At present, Aimeike mainly engages in various types of sodium hyaluronate (hyaluronic acid) products, including dermal fillers, facial implant line products, derivative cosmetics, etc. According to the data reported in the middle of 2021, Aimec achieved operating income of 633 million yuan by selling the above products, an increase of 161.87% year-on-year; in the same period, it achieved a net profit of 425 million yuan, an increase of 195.42% year-on-year.
Figure 2: 2018-2021H1 Aimek main financial data Data source: wind 36Kr collation
If divided according to product categories, the company's medical beauty grade hyaluronic acid products can be divided into two categories: gel injection and solution injection. In 2021H1, the revenue of solution injection products (including Hi Body and Yimei) reached 476 million yuan, contributing 75.2% of the revenue. Due to product iteration, Yimei's revenue accounted for less than 1% as early as 2019. Therefore, in the current revenue structure, HiTi has contributed nearly 70% of the company's revenue.
Figure 3: 2021H1 Aimek revenue composition Data source: wind 36Kr collation
In terms of profitability, the gross profit margin gap of the company's medical aesthetic grade hyaluronic acid products is not large, all of which are about 93%, the gross profit margin of the solution class (including hi body) is relatively high, while the gross profit margin of smaller cosmetics and facial implant lines is generally low.
In short, compared with other products, Hi Body is larger, faster and more profitable, considering that the company's research products are still a period of time away from being listed, and will not immediately contribute to performance, so in the short term, Hi Body is the core factor that determines the company's growth.
Second, the ceiling of the hi body is higher
Hi body is a typical non-surgical light medical beauty project, compared with the surgical project, non-surgical project has the characteristics of low single price, small risk, small trauma, etc., so the market acceptance is high. On the other hand, as a hyaluronic acid project, the characteristics of high frequency and low price and high repurchase rate ensure considerable user stickiness.
According to Frost & Sullivan data, from 2016 to 2020, the CAGR of China Medical Beauty Hyaluronic Acid terminal products reached 24.0%, and the market size in 2020 was 5.77 billion yuan, and it is expected to continue to grow at a high speed of more than 20% caGR in the next 5 years. Therefore, at the industry level, the high growth of hyaluronic acid itself is a major support for Hi Body to maintain high growth in the future.
In terms of indications, the hi body is mainly used to solve the neck striation, and the hi body panda needle is aimed at the periorbital track. In 2020, the neck pattern market size is 444 million yuan, according to estimates, it is expected that the market size of the neck wrinkle of the hi body in 2025 will reach 1.842 billion yuan, and the 5-year CAGR will be as high as 33%.
Due to the scarcity of compliant products in the periorbital market and the lower penetration rate relative to the neckline market, higher conversion rates are expected in the target user group. Moreover, with a broad market space as a support, Panda Needle is also expected to seize this market blue ocean with compliance and price advantages.
In general, the neck stripe and eye socket market have excellent growth, which is also the consensus of the current market, Hi body as a scarce compliance product, superimposed on its own relatively high user stickiness and high-frequency consumption characteristics, the future ceiling is still very high.
Third, where is the core competitiveness of the company? 1. Exclusivity under compliance
In China, HiTi is a Class III medical device, which needs to pass the review and approval of the State Food and Drug Administration before being listed for sale. Since the research and development, clinical, and registration declaration cycle of injectable hyaluronic acid medical aesthetic products usually takes 2-5 years, there are not many compliant products at present.
Therefore, whoeverse product is the first to be certified will have the first-mover advantage under the policy guarantee.
In the domestic neck pattern market, HiTi is the only certified product, and public information shows that there are still no relevant competitors submitted to the FOOD and Drug Administration. Therefore, hi body has at least 2 years of exclusivity, the first mover advantage is obvious. With the continuous advancement of consumer education, the penetration rate of Hi Body has increased, the market scale has expanded, and its profitability level will be on the basis of the incremental market of medical beauty.
Figure 4: Application process and time for medical devices Data source: Guoyuan Securities Research Institute
2. Channels and marketing advantages
Compared with the traditional medical industry, medical beauty has a strong consumption attribute. From the perspective of demand, in traditional medical services, the patient's medical needs are usually triggered by their own diseases, which has a strong rigid need and necessity; while in medical aesthetic services, the consumers' medical needs usually begin with their own aesthetic needs and are triggered by marketing guidance, with relatively high autonomy and selectivity.
In terms of academic promotion, due to the medical aesthetic industry dominated by non-public medical aesthetic institutions, the extensive involvement of private capital makes the profitability ranking of products more advanced, so the use of related products in medical aesthetic solutions is mainly driven by cost, and the sales decision-making power of doctors is low.
Based on the marketing attributes of medical beauty, Aimeike has established an efficient and stable B-end channel network through the sales model of "direct sales as the mainstay, distribution as a supplement", and by the end of 2020, it has achieved full coverage of 31 provinces, municipalities and autonomous regions and 5,000+ medical beauty institutions.
In addition, in order to strengthen the B-end channel, Aimeike has established the "Quanxuan Academy" education platform to provide technical training for medical aesthetic institutions by forming training teams such as experts. This is not only to cultivate the doctor's habit of using the hi body, so as to enhance the stickiness of B-end customers, but also professional market education can help the company improve brand awareness and acceptance, and establish brand barriers.
In terms of financial performance, from 2017 to 2021, excluding the impact of the obstruction of product promotion caused by the epidemic, the sales expenses related to the promotion of Aimeike channels showed a steady upward trend with the increase of sales scale and marketing varieties.
Compared with sales expenses, the company's revenue has grown more rapidly, and the sales expense ratio has dropped by nearly 9.5 percentage points between 2018 and 2021Q3, reflecting a strong ability to control expenses.
Compared with its peers, the marketing of Bloomage Bio and HaoHai biotech is mainly for the C-end, and the global medical beauty leaders Allergan and Aimike are oriented to the B-end. Because B-end customers are more sticky and more stable, the sales expense rate is relatively low, but because medical aesthetic products are driven by cost, the sales expense rate will be more unstable.
Figure 5: Sales Expense Ratio of Comparable Enterprises in 2018-2021 Data Source: Wind Aimek Prospectus 36Kr Collation
3. Technical advantages
At present, the approved hyaluronic acid medical beauty products in China are mainly divided into two categories: filler hyaluronic acid and skin care water light needle. Among them, the molecular weight of filled hyaluronic acid is large, the degree of crosslinking is high, so the hardness viscosity is high, mainly used for subcutaneous filling such as anti-wrinkles; the molecular weight of the water light needle is small, the degree of crosslinking is low, and it is easy to be decomposed and absorbed, which is mainly used for moisturizing and rejuvenating the skin.
The ingredients are based on water light needles, and a variety of compound ingredients (such as amino acids, L-carnosine, etc.) are added, so it has the effect of filling and moisturizing and rejuvenating the skin. Therefore, the more complex technical path makes the product premium of HiTi is relatively higher.
In addition, the company continues to tap the commercial potential of Hi Body, and has developed Derivative Products such as Panda Needle and Xian Huo Bubble Needle in the past two years, and successfully expanded its application to orbital peri-orbital, water and light tracks.
Based on multi-indication, one-stop diagnosis and treatment thinking, the company also provides a variety of joint medical aesthetic solutions to improve the stickiness of consumers and institutions, such as the Hi Body Beauty Sculpture Scheme uses the "tight love + panda needle" product portfolio to achieve periorbital rejuvenation through thread embedding + filling.
Figure 6: Timeline of the company's launch of Hi Body derivative products Data source: Guoyuan Securities Research Institute
Fourth, now it seems that the amy is not worth buying?
From the perspective of the development trend of hyaluronic acid medical beauty products, compliance and high-end are the general trend. Since 2017, the relevant departments of the state have successively issued documents to promote the legal compliance of medical aesthetics, and the standardization of the medical aesthetic market has squeezed the living space of black medical aesthetics, and the market space for formal licensed products will continue to be opened under the protection of laws and regulations.
As the leader of the domestic medical aesthetic industry, Aimeike is the enterprise with the most hyaluronic acid related certificates, as of now, the company has a total of 7 relevant registration certificates. The company will fully enjoy the growth dividends brought about by the compliance of the medical aesthetic market, and the ability to obtain certification will also become the most powerful weapon for the company to compete in the medical aesthetic market.
Figure 7: Amyak's certified products and related information Data source: 36Kr collation
However, in terms of price, Aimec's products are mainly for the mid-end market, and the products in this price segment are not as competitive as high-end products due to their innovative attributes and brand influence, so they are more competitive with high-end products. Due to the limited downstream medical resources, there is also heterogeneous competition between different products, thus diverting end customers.
In addition, medical aesthetic products iterate quickly, the dividend period of new products is relatively not so long, and the profit margin of terminal products is not as good as that of high-end products, and research and development costs and sales expenses will largely erode the company's profits.
According to the company's prospectus, in 2020, the market share of Aimec under the sales caliber reached 27.2%, ranking first; while the sales caliber was only 17.3%, ranking third, and the Top2 was occupied by foreign manufacturers.
Therefore, if the company can rely on the advantage of the number of users, through the high-end, differentiated product matrix, it will be able to obtain a larger market share.
Figure 8: Price band of major hyaluronic acid injection products Data source: Haitong Securities Research Institute
In terms of expanding the product matrix, Aimek mainly cuts into more tracks faster through mergers and acquisitions. In June 2021, Aimek acquired a 25.4% stake in South Korean botulinum toxin medical aesthetic company Huons Bio at a premium of nearly 74 times, with the intention of creating a second growth curve. In addition, the company cooperated with Nobote Biology and Rongzhi Biology to develop liraglutide injection and deoxycholic acid, and laid out the weight management business.
The before and after changes in Aimek's stock price reflect the changes in the market's expectations for it. In the rising stage of stock prices last year, the market is optimistic about the high growth brought about by the high-frequency consumption and high repurchase characteristics of Hyaluronic Acid medical beauty products of Aimeike. In addition, the market also gives a high premium for the company's certain advantages in terms of first-mover, technology, and channels.
The high financial growth has also fulfilled market expectations, and the company's botulism pipeline under development has also given the capital market imagination space. Holding the Moutai that missed men, but can not miss the idea of "women's Moutai", and then superimposed on the overall market style of medical beauty at that time, what you see is the soaring valuation.
However, as trading becomes more crowded, the margin of safety becomes lower and lower, and the market gradually returns to rationality. Investors began to reflect on whether the growth of Aimek's performance could still maintain high growth after the base came up, whether the expectation of botulinum poisoning was injected prematurely, and so on. When expectations change marginally, superimposed on huge valuation pressures, stock price adjustment is inevitable.
At this point in time, Aimek is returning to its fair value. As mentioned above, benefiting from the general trend of medical aesthetic compliance, Hi Ti has an exclusive sales window of 2 years in the neck tattoo market, and Hi Ti maintains high growth is relatively certain, which supports the company's performance to continue to maintain high growth.
Therefore, based on the current market capitalization calculation, it is conservatively assumed that the company's future performance growth rate is lower than the present value and is declining year by year. It can be seen that in 2022, when the profit base begins to rise, the company will begin to have the ability to digest the valuation significantly, which is the same trend reflected in Wind's consensus expectations.
Figure 9: Valuation calculation of Aimek in 2021-2023 Data source: wind 36Kr collation
Overall, the prospects of medical beauty are good, it is a good business, as the leader of the medical beauty industry, in the long run, Aimeike has considerable investment value. However, the performance of Aimek is relatively insufficient to support the current valuation level, and the continuous adjustment since the second half of 2021 to date also reflects investors' perception of the current value of Aimek to a certain extent.
Figure 10: 36Kr Finance
*Disclaimer:
The content of this article is representative of the views of the author only.
The market is risky and investments need to be cautious. In no event shall the information contained herein or the opinions expressed constitute investment advice to any person. Before deciding on an investment, investors must consult with a professional and make prudent decisions if necessary. We do not intend to provide underwriting services or any services that require specific qualifications or licenses to be performed by parties to the transaction.