Cover news reporter Meng Mei
Under the prevalence of the yan value economy, the planting intention of "baldness" has also begun to catch fire.
On 17 June 2021, Yonghe Medical (hereinafter referred to as "Yonghe") officially submitted its listing application to the Hong Kong Stock Exchange. Once successful, Yonghe is likely to become the "first share of hair transplantation". Prior to this, China's largest ophthalmology chain Aier Ophthalmology was successfully listed on the Gem Board. So, can Yonghe Medical, which will soon be listed on the Hong Kong Stock Exchange, become the "Aier Ophthalmology" of hair transplant circles?
The market of 100 billion is close at hand
In fact, no one thought that such a huge market was also sudden. According to a survey by the National Health Commission, in 2020, more than 2.5% of the population in China still had hair loss, of which 163 million were men with hair loss and 88.6 million were women with hair loss. In other words, nearly 2 out of 1.4 billion people have hair loss.
According to public information, Yonghe Medical has been established in 1999, with hair autograft surgery as its main business. In September 2017, Yonghe Medical received an investment of 300 million yuan from CITIC Industry Fund, which is also the first case in the field of hair transplantation to obtain venture capital. Since then, the hair transplant industry, which has been silent for nearly 20 years, has begun to increase in popularity.
According to the information provided by the New Oxygen Data Yan Research Institute, hair transplantation and hair care consumption, comprehensively speaking, not only includes the hair planting of the head, but also includes facial hair planting, body hair planting, head maintenance, etc., of which head hair planting accounts for the vast majority of hair planting consumption, more than 85%, followed by facial hair planting, accounting for about 12%.
Male consumers are the mainstream of head hair cultivation consumption, accounting for more than 60%.
From the data of 2020, in the consumption of head hair planting, hairline planting is the most favorite item of consumers, accounting for 92% of consumption; followed by overhead encryption planting, accounting for more than 7% of consumption, and a small number of users like to plant beauty tips.
From the perspective of the age group of hair transplant consumers, 20-25-year-old users are the mainstream group of hair transplantation and hair restoration, followed by 25-30-year-olds. Overall, the post-90s generation is the absolute main force of hair transplantation consumption, accounting for more than 50%.
Matching the data is that according to the Yonghe Medical Prospectus, China's hair transplantation field has ushered in substantial growth since 2016, the total revenue of the hair transplantation field in 2016 is 7.8 billion yuan, and in 2020 it will reach 18.4 billion yuan, with a compound annual growth rate of 23.9%, according to authoritative institutions, from 2025 to 2030, the size of the hair transplantation market will reach 56.2 billion yuan to 138.1 billion yuan.
Will Yonghe become the next "Aier Ophthalmology"?
A detailed comparison of the prospectuses of Aier and Yonghe will find that the two are very similar, and the indicators are "industry first". From the perspective of the number of institutions, in 2009, Aier covered 12 provinces (municipalities directly under the central government) and had 19 chain hospitals; in 2021, Yonghe covered 50 cities in 25 provinces and had 51 chain institutions. From the perspective of the number of doctors, in 2009, Aier had more than 400 doctors, including more than 120 doctors with the title of deputy senior or above; in 2021, Yonghe had a medical team of 1200 people, including 229 registered doctors and 930 nurses. From the perspective of outpatient surgery volume, in 2008, the cumulative outpatient volume of Aier was 631,100 and the number of surgeries was 66,400; in 2020, the number of Yonghe medical maintenance patients was 59,000, and the number of hair transplant surgeries was 50,700. From the perspective of corporate revenue, in 2008, Aier's total revenue was 439 million, net profit was 61.36 million, gross profit margin was 55.43%, net profit margin was 13.9%; in 2020, Yonghe's total revenue was 1.63 billion, net profit was 163 million, gross profit margin was 74.6%, and net profit margin was 10%.
In fact, it was not until 2011, three years after its listing, that Aier reached a total revenue of 1.311 billion yuan and a net profit of 172 million yuan, which was basically the same as the revenue of Yonghe when it was listed. In addition to these "hardware", the similarities and differences between the two companies in terms of industry scale, business model, marketing capabilities, and corporate risks can also be remarkable. In 2009, Aier estimated the size of China's ophthalmology market to be close to 20 billion. The hair medical service market in which Yonghe is located has a market size of 18.4 billion yuan in 2020, which is the same as the scale of Aier in 2009.
The ophthalmic market faced by Aier has taken the lead in achieving explosive growth. At that time, Aier faced a situation: in 2007, China's myopia population exceeded 300 million, but the amount of refractive surgery was only more than 500,000 cases a year, and the penetration rate was lower than the 700,000 cases in the United States; from 2001 to 2020, China's annual increase in the elderly population was 5.96 million, resulting in a rapid rise in elderly eye diseases such as cataracts, but the annual number of cataract surgeries per million people in China was only 620 cases, only 1/8 of India. This means that the market size of cataract surgery alone will increase by 8 times as long as it reaches india's penetration rate. In reality, according to Frost & Sullivan's data, China's ophthalmic medical service market really reached a scale of 127.5 billion in 2019, an increase of 6 times in 10 years.
The market that Yonghe faces also has unlimited potential.
According to Frost & Sullivan, in 2020, only 516,000 hair transplants were completed in China, with a penetration rate of 0.21%. This shows that the potential of the hair medical services market is extremely large and the demand is far from being met.
Frost & Sullivan predicts that the size of China's hair medical service market will reach 138.1 billion in 2030. This is basically the same as the scale of 127.5 billion yuan in 2019 10 years after Aier's listing. In other words, the hair medical service market is likely to grow 7.5 times in 10 years. The 6-fold increase in the ophthalmology market in 10 years has given birth to the super bull stock of Aier Ophthalmology; then, the hair medical market, which has risen 7.5 times in 10 years, will not create a "Yonghe miracle"?
Look at Angel of The Age (06699. HK) nearly 400 times the price-to-earnings ratio, you know that the medical aesthetic sector continues to create similar miracles.
Marketing upgrades The prospect of the hair transplantation market is considerable
However, if Yonghe wants to really catch up with Aier, he still has to make great efforts in marketing. Because, Aier's marketing ability is incredibly strong.
From 2008 to 2020, Aier's total revenue increased from 439 million to 11.912 billion, but the marketing expenses only increased from 0.46 billion to 1.066 billion; the ratio of selling expenses to total costs always hovered between 11% and 15%.
In particular, in 2020, Aier's total revenue hit a new high of 11.912 billion, but the proportion of sales expenses hit a new low of 11.76%.
In contrast, the ratio of Yonghe's "sales and marketing expenses" to total costs in 2018-2020 was 49.6%, 53.1% and 47.6%, respectively.
What does this mean?
It is that Aier can leverage 100 million yuan of revenue with a sales cost of 10 million; but Yonghe can only leverage 20 million of revenue with a sales cost of 10 million. Why is Aier's marketing ability so strong? One is related to the degree of pain of eye diseases, and the other is related to Aier's offline marketing methods.
At the beginning of the business, the Aier marketing department had a strange name - "anti-blindness office", the main task is to go deep into the community to engage in "free clinics", to measure the vision of the elderly and children, eye pressure, optometry and dispensing, and by the way to lead patients to the hospital for surgery.
In recent years, Aier has also become a strategic partner of more than 2,000 kindergartens in Liaoning through the public welfare action of "Protecting the Future with Heart and Eye Color" and using only the "Million Public Welfare Fund", accurately targeting small customers.
In addition, Aier's membership activities, one can enhance customer stickiness, the other is to let members invite friends to participate, a steady stream of "pulling new".
Online, Aier also jointly released the "National Mobile Phone Eye Behavior Big Data Report" and "White Paper on Myopia Surgery for Chinese People" with authoritative media, and constantly "popularized" corneal laser surgery, full femtosecond surgery, crystal implant surgery, and used the most economical method to do consumer education. These marketing methods are low cost, high efficiency and effective.
But the degree of pain of hair loss cannot be compared with eye disease. Yonghe's marketing cannot be so engaged, and can only be based on online and supplemented by offline. Online, Yonghe invested in advertisements in Tencent and Toutiao, searched on Baidu, and did popular science on social media such as Weibo, B station, and Douyin to open up potential customers. Offline, Yonghe placed advertisements on the subway and elevators on the one hand, visited customers of Internet and financial enterprises on the other hand, and used the method of holding hair care seminars to find potential customers. Due to the different nature of the disease, yonghe is difficult to make a difference offline, and can only turn to the line of drainage, resulting in a high sales cost ratio.
The capital market looks at the future.
In fact, after Yonghe submitted the prospectus, the reports on "Yonghe" and "hair transplantation" soared, which temporarily triggered a financial hotspot. This is still the case during the prospectus period, if Yonghe finally wins the crown of "China's first hair transplant stock", then Yonghe will establish a long-term brand advantage. Because after the listing, Yonghe may become a hot news spot whether it is issuing quarterly reports, annual reports, announcements, or daily operations. Listing, will be free brand promotion amplifier. This means that the proportion of sales expenses in the future decline space may be very large.
In fact, a large part of Yonghe's marketing expenses are brand advertising. Once the company is listed and the brand power is improved, the proportion of this part of the expense will naturally decrease, so that the proportion of profit will continue to increase. From this perspective, the capital market may be more optimistic about the future of Yonghe. Industries with high potential, strong growth, high returns and low risks, such as hair transplantation, are the "golden track" that investors dream of. In fact, the capital market has long been looking forward to "hair transplant stocks".
In September 2020, the A-share listed company Langzi Shares (002612.SZ) replied to investors: the company already has hair transplantation business. As soon as the news came out, Langzi's stock price continued to rise from less than 10 yuan to the highest 71 yuan, up 7 times.
If Yonghe Hair Transplantation is successfully listed, its status as the "first share" and "leading stock" of hair transplantation will be difficult to shake; growing into "Aier Ophthalmology Second" will also be a high probability. At that time, wouldn't it be fragrant for the bald shareholders who boiled the stock to make a sum of money for hair transplantation on the road of investing in Yonghe?
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