China Net Finance and Economics, August 12 (Reporter Li Jing) Recently, Beijing Yimer Medical Technology Group Co., Ltd. (hereinafter referred to as "Yimer"), a veteran medical beauty institution that started from Beijing and has been deeply involved in the industry for more than 20 years, submitted a prospectus to the Hong Kong Stock Exchange.
According to public information, Yimeier started in 1997 in the Red Cross Jianxiang Plastic Surgery Hospital (later renamed Yimer Jianxiang Hospital) founded in Dongsheng Township, Haidian District, Beijing, and the founder was Wang Yongan, who had worked as a trader, investor and journalist. In 2003, with the launch of "China's first artificial beauty" Hao Lulu, Imer suddenly won public popularity.
According to the prospectus of Yimer, the company's scale has been expanded to 9 hospitals, of which the main position beijing has 5 hospitals, and the remaining 4 are distributed in Tianjin, Qingdao, Jinan and Xi'an. According to the report of the consulting agency "Frost & Sullivan", in terms of the revenue of medical beauty services in 2020, Imer ranks first among all private medical beauty institution groups in northern China and fourth in the country.
It is understood that Yimer's business is mainly non-surgical medical aesthetics and surgical plastic surgery, covering plastic surgery, body sculpture, injection plastic surgery, laser beauty, Traditional Chinese medicine beauty, oral management and other fields, while Yimer's income mainly comes from non-surgical services that is, light medical beauty projects, including injection of botulinum toxin, hyaluronic acid filling and other injection beauty and ultrasound knives, photon rejuvenation and other energy beauty.
He was punished for publishing advertisements in violation of regulations and was involved in 23 medical disputes
According to the prospectus, in the past three years (2018 to 2020), the company has been administratively punished 8 times for publishing illegal medical advertisements. Imel said that the main reason is that sales and marketing personnel lack understanding of relevant laws and regulations, fail to obtain medical advertising review certificates in a timely manner, or carry out aggressive marketing activities in violation of the content and form of medical advertising.
In the prospectus, Immel also mentioned that as a result of the aforementioned incidents, the company received an administrative warning and paid a fine of 430,000 yuan. In addition, The license of Tianjin Hospital to provide medical aesthetic surgery services was temporarily withheld as a result. However, Tianjin Hospital holds another license, so it can continue to provide medical beauty services.
In addition, the prospectus also shows that from 2018 to the end of the first quarter of 2021, Yimer experienced 23 medical disputes and paid a total of 2.1 million yuan in compensation, of which 300,000 yuan was compensated in the first quarter of 2021.
It is understood that the medical disputes of Yimer are mainly related to complications and bodily injuries that occur during or after the customer's medical treatment, or other complaints filed by the customer's medical aesthetic service.
At present, Imer is also reducing the proportion of surgical services in the overall revenue. According to the prospectus, the proportion of surgical services revenue has dropped from 27% in 2018 to 22.8% in 2020.
At the same time, Imer shifted its strategic focus to non-surgical care. In 2018, 2019, 2020 and the first quarter of 2021, Imer's non-surgical service revenue was 450 million yuan, 520 million yuan, 600 million yuan and 210 million yuan respectively, accounting for 68.2%, 69.9%, 73.9% and 76.7% of the operating income in the same period, and the proportion gradually increased.
The prospectus shows that non-surgical diagnosis and treatment has high safety, high affordability, rapid effect, and generally requires continuous treatment over time, with strong customer stickiness. From the perspective of injecting botulinum toxin and hyaluronic acid fillers, the diagnosis and treatment have a certain validity period, and after the expiration date, the customer needs to be treated twice to maintain the effect.
Marketing and customer acquisition costs are higher than industry levels
In domestic medical beauty institutions, customer acquisition costs are an important part of their operating costs and expenses. According to a report by the consulting firm Frost & Sullivan, beauty agencies typically spend 25%-35% on sales and marketing.
According to the prospectus, Imer's sales and marketing expenses between 2018 and 2020 were 199 million yuan, 219 million yuan and 188 million yuan, respectively. Revenue accounted for 30%, 30% and 23% respectively.
Staff costs are a major component of Immel's sales and marketing expenses.
In the first quarter of 2021, Yimer's sales and marketing expenditure was 64.221 million yuan, an increase of 107% over the same period of the previous year. In the same period, the cost of the company's sales and marketing employees and customer service employees was 47.144 million yuan, an increase of 132.16% year-on-year.
According to the prospectus, as of the end of the first quarter of 2021, Imer had 2138 full-time employees in China, of which 932 were sales and marketing personnel, accounting for 43.6%.
In order to gradually reduce its dependence on third-party customer acquisition channels, Yimer began to build a full-time direct sales team (composed of full-time and part-time sales consultants) in 2018, and the marketing expenditure of the full-time team has gradually increased in recent years. According to the data, in 2018, 2019, 2020 and the first quarter of 2021, Imer made payments to part-time consultants of 6.9 million, 17.2 million, 23.9 million and 7.9 million, respectively.
Driven by marketing, the number of patients in Imel rose from 233,400 in 2018 to 309,900 in 2020. Among them, the number of active customers (those who have purchased medical beauty programs at least once) increased from 70,500 in 2018 to 87,000 in 2020.
Insufficient profitability Twice failed against the bet
According to Frost & Sullivan, the total revenue of China's medical beauty services market increased from RMB77.6 billion in 2016 to RMB117.6 billion in 2020, a compound annual growth rate of 11%, and is expected to grow from RMB135.3 billion in 2021 to RMB278.1 billion in 2025, a CAGR of 19.7%.
However, in the medical beauty track of "huge profits", Imer did not achieve "huge profits" but "did not make money".
According to the prospectus, from 2018 to 2020, Imer's revenue was 661 million yuan, 739 million yuan and 811 million yuan, gross profit was 355 million yuan, 380 million yuan and 435 million yuan, gross profit margin was 53.7%, 51.6% and 53.6%, and net profit was -100 million yuan, -118 million yuan and 8.29 million yuan, respectively. In the first quarter of 2021, the company achieved revenue of 270 million yuan and a profit of 10.05 million yuan.
According to the prospectus, the losses in 2018 and 2019 were mainly due to the lower initial operating income and higher operating costs of new medical beauty institutions such as Xi'an Hospital, as well as the increase in marketing expenses of the company's expansion of the dedicated sales consultant team.
In order to turn around the loss, Immel began to divest the loss-making business.
In January 2020, Yimer transferred Beijing Lefo Pediatrics for 2 million yuan, in June 2020, transferred the equity of Ruilishi (Beijing) for 150,000 yuan, and in October 2020, decided to sell four medical and aesthetic hospitals located in Chongqing, Harbin, Shenyang and Shanghai and assigned them to the assets held on behalf of the sale.
It is worth mentioning that Imer has made two bets for financing, but both have failed.
In 2011, investors Such as Legend Wisdom, Tianjin Tiantu, Shenzhen Tiantu and Yimer founder Wang Yongan reached a verbal commitment that if Yimer's net profit in 2011 was less than 50 million yuan, Wang Yongan would transfer 1.5% of Yimer's equity to the investor free of charge. In May 2012, Wang Yongan compensated investors with a certain percentage of his equity in Imer because he did not achieve the target of the bet.
In April 2016, Wang Yong'an and other shareholders signed the "Shareholders' Agreement" again, the signatories are Huameifude, Huatai Ruihe and other investors, the agreement stipulates that from the date of applying for listing on the New Third Board, if the IPO is not completed before January 1, 2021, and Huameifu and Huatai Ruihe do not withdraw from the equity of the company they hold, then the shareholders Wang Yongan and Wang Yongan's son Wang Muyuan need to bear the obligation to repurchase the equity of Huatai Ruihe and Wang Yongan to repurchase the equity of Fude.
If the above agreement is not changed, this second bet will not be successful.
According to public information, Yimer has experienced three rounds of financing since its inception, and investment institutions include Huatai Ruilin, CDH Investment, Joy Capital, Tiantu Investment and Legend Capital, etc., with a round of financing of 200 million yuan and a b round of financing of 100 million US dollars (about 646 million yuan).
In October 2016, Yimer briefly listed on the New Third Board, but within 5 months announced that it would terminate the listing due to "the need to cooperate with the company's business development". In the prospectus, Imer's explanation for the delisting four years ago was that "due to the generally low liquidity of the new third board, financing resources are limited."
Source: China Net Finance