In recent years, with the improvement of living standards, people have begun to pursue a higher level of spiritual life, and the beauty economy has made great progress. According to a report released by Tencent Marketing Insights, China's medical beauty market has grown at a compound annual growth rate of 17.5% since 2017 to nearly 190 billion yuan in 2021. However, due to multiple factors such as changes in residents' income expectations, the growth rate of medical aesthetic consumption has slowed down since 2022.
Zhitong Financial APP noticed that under the pessimistic expectations of the market, medical cosmetology as an "improved" optional consumption has been questioned more in the past year or so, and many investors are worried that the prosperity of the medical cosmetology market will continue to be under pressure due to the macro environment.
But this may not be the case. A few days ago, Aimeike (300896. SZ) disclosed its results for the first quarter of 2024. According to the financial report, during the 24Q1 period, the company achieved revenue of 808 million yuan, an increase of 28.2% year-on-year, and net profit of 528 million yuan, an increase of 36.5% year-on-year.
Under the "weak expectations" of the outside world, Aimeike's performance has frequently reported good news. The stronger contrast lies in the fact that as the "king" in the field of medical cosmetology, Aimeike's stock price and valuation have been deeply corrected in the "ghost story" of the market, and the cumulative decline of the company's stock price last year was close to 50%. In contrast, the share price of Proya, the domestic leader in the beauty track next door, has been soaring, rising from the issue price of 15.34 yuan per share to 110 yuan today. The two companies are both leading companies in the female consumer segment, but the stock price trend since last year is very different, and it may be time for the market to think about whether it has seriously underestimated the resilience and growth potential of the medical aesthetic leader......
The first quarterly report confirms strong growth in fundamentals
As of 2023, the company has seven Class III medical device products used in medical cosmetology, and is the company with the largest number of Class III medical devices certified by the State Food and Drug Administration for non-surgical medical cosmetology in China, including five series of dermal fillers based on sodium hyaluronate, one dermal filler based on poly-L-lactic acid, and one PPDO facial implant thread product. After 20 years of development, Aimeike has carried out a comprehensive strategic layout of the medical aesthetic industry from products, technology, services to ecology.
Relying on years of self-research capabilities, channel advantages and brand influence, Aimeike's revenue and net profit have maintained a rapid growth trend. According to the company's previously disclosed 2023 annual report, the company achieved revenue of 2.869 billion yuan, net profit attributable to the parent company of 1.858 billion yuan, and net profit of 1.831 billion yuan after deducting non-attributable net profit, an increase of 48.0%, 47.1%, and 53.0% year-on-year respectively.
Behind the dazzling financial data, the core factor driving the high performance of Aimec is its comprehensive and differentiated product matrix. From the perspective of splitting the revenue structure, Aimeike's revenue is mainly contributed by solution and gel injection products. In 2023, the solution injection products with "Hi Body" as the core will grow steadily, with an annual revenue of 1.67 billion yuan, accounting for 58%, a year-on-year increase of 29%.
In the same period, Aimeike's gel injection products achieved revenue of 1.16 billion yuan, accounting for 40%, a year-on-year increase of 81%. In this series of products, "White Angel" has continued its good growth momentum and has become a strong support point for the company to build a phenomenal product matrix.
What is commendable is that on top of last year's high performance base, the fundamentals of Aimeike will continue to advance in 2024. As mentioned at the beginning of the article, Aimeike's revenue in the first quarter of this year increased by 28.2% year-on-year to 808 million yuan, and while the scale increased steadily, the company's profit performance was also strong. According to the data, during the Q1 period, the net profit attributable to the parent company of Aimeike was 527 million yuan, an increase of 27.4% year-on-year, and the net profit after deducting non-attributable to the parent company was 528 million yuan, an increase of 36.5%.
It is worth mentioning that in the first quarter of this year, Aimeike's net profit deducted from non-attributable to the parent company and the corresponding growth rate were significantly higher than those attributable to the parent company and the corresponding growth rate, which was mainly due to the decline in the stock price of Boan Biotechnology in other non-current financial assets held by the company during the reporting period, resulting in a change in its fair value and negative income. If this part of the impact is excluded, the growth rate of Aimeike's net profit attributable to the parent company is expected to remain above 30%.
Taking Aimeike's quarterly report as the observation window, the company's all-round high growth in business and profit during the period may be "spoiling" the company's annual performance will usher in another jump on the high base in 2023. Driven by the strong "Hi Body" product matrix and the recycled product matrix represented by "White Angel" and "Rusheng Angel", it can be expected that the growth elasticity and growth certainty of Aimeike will be further strengthened in 2024.
The product territory continues to expand, and the leading and strong are Hengqiang
In recent years, due to changes in the macro environment, residents' income expectations have tended to be conservative, and the overall growth rate of the medical aesthetic industry has slowed down under the influence of multiple factors. In this context, the capital market also has doubts about the growth prospects of medical aesthetic enterprises.
However, if we take a long-term view, on the whole, medical aesthetics is still a growth track with low penetration and high potential. According to Tencent's 2024 White Paper on Light Medical Aesthetic Consumption Trends, the market size of China's medical aesthetic market is expected to be 266.6 billion yuan in 2023, and this figure is expected to grow to 400 billion yuan by 2026, and the industry will continue to grow at a compound annual growth rate of 15% in the next three years.
At the same time, the continuous improvement of the regulatory environment is also conducive to the high-quality development of the medical aesthetic industry. In May last year, 11 departments jointly issued the "Guiding Opinions on Further Strengthening the Supervision of the Medical Cosmetology Industry", which put forward a series of targeted measures to further strengthen the supervision of the medical cosmetology industry and standardize and promote the development of the medical cosmetology industry.
In the meantime, Aimeike, which adheres to R&D-oriented and orderly expansion of compliant products, is expected to benefit deeply and further consolidate its leading position.
In the view of Zhitong Financial APP, strong R&D capabilities are the foundation for Aimeike's sustained and rapid development in the past, and strong technical barriers will continue to help it maintain its leading edge in the future. According to the company's annual report, as of the end of 2023, Aimeike's R&D personnel accounted for 26.7% of the company's total number, and the R&D team has diversified professional backgrounds, covering many professional fields such as bioengineering, polymer chemistry and physics, pharmaceutical engineering, and clinical medicine.
The high-quality R&D team has helped Aimeike accumulate a number of industry-leading core technologies. As of the end of last year, the company has obtained a total of 74 authorized patents, including 35 invention patents, and 20 registered software copyrights.
Reflected in the product side, the continuous reinvestment in R&D has also enabled Aimeike to reserve a rich pipeline under development. It is understood that at present, Bonita 2.0 and botulinum toxin have entered the registration and declaration stage, medical sodium hyaluronate-hydroxypropyl methylcellulose gel, second-generation implant thread, lidocaine tetracaine cream are in the clinical trial stage, semaglutide injection, deoxycholic acid injection and hyaluronidase for injection are in the preclinical research stage.
On the channel side, Aimeike adheres to the marketing model of "direct sales as the mainstay, distribution as the supplement" to flexibly seize the market. By the end of last year, the company had established a sales and service network covering about 7,000 medical beauty institutions in 31 provinces, municipalities and autonomous regions across the country. With the help of a huge channel network, Aimeike's compliant products are expected to continue to penetrate into the terminal market efficiently.
brief summary
In recent years, there has been an increasingly obvious differentiation in various sectors of the mainland consumer market. As far as the capital market is concerned, although the overall performance of the consumer market is flat, the female consumption track where fund managers concentrate on their positions is quietly taking more share, which is in stark contrast to the increasingly "cooling" liquor sector.
At the same time, it shows that the investment preferences of the market are changing, and the new consumption represented by women's "self-pleasing" consumption is becoming the "favorite" of active funds and institutional funds. Among them, medical beauty and beauty are the most eye-catching "golden" tracks. However, unfortunately, due to the pessimism in the market, the overall stock price performance of medical aesthetic companies has been weak in the past year or so. Even the leading companies have significantly underperformed the market, and the market has not given the top players enough valuation premium.
Looking back at the fundamentals, as a platform enterprise with many pipeline matrices, Aimec can be said to be one of the most potential targets in the medical aesthetic track. According to Flush iFinD data, the market predicts that Aimeike's net profit attributable to the parent company in 2024-2026 will reach 2.507 billion yuan, 3.286 billion yuan, and 4.093 billion yuan respectively, and the corresponding PE will be 25 times, 19 times, and 15 times respectively based on the closing price on April 24. In the future, with the commercialization of Aimeike's new products and more products under development, it is foreseeable that it will continue to fulfill its growth expectations, and the company's stock price and valuation will eventually usher in a return to value.