Core Viewpoint - The company, Langzi Co., Ltd. (002612), is accelerating its expansion in the fashion industry and medical beauty sector through both organic growth and acquisitions, with a recent announcement to acquire a controlling stake in Chongqing Milan Baiyu Cosmetic Surgery Hospital for nearly 100 million yuan [2][3]. Group 1: Acquisition Details - Langzi's subsidiary, Beijing Langzi Medical Management Co., plans to acquire 67.5% of Chongqing Milan Baiyu for 92.475 million yuan, based on an assessed value of 137 million yuan for the entire hospital [3][4]. - Chongqing Milan Baiyu is a specialized medical beauty hospital with a total operating area of 5,600 square meters, located in a prime area of Chongqing [3][4]. - The hospital has a comprehensive treatment capability and has obtained the necessary medical licenses to operate in the medical beauty sector [4]. Group 2: Financial Projections - The hospital's projected revenues for 2024 and Q1 2025 are 148 million yuan and 38 million yuan, with net profits of approximately 5.15 million yuan and 4.02 million yuan, respectively [4][5]. - Future revenue forecasts from 2025 to 2027 predict revenues of 111 million yuan, 157 million yuan, and 168 million yuan, with net profits of 5.09 million yuan, 9.73 million yuan, and 11.66 million yuan, respectively [5]. Group 3: Market Potential - The medical beauty industry in China is experiencing rapid growth, with a projected annual compound growth rate of 10%-15% from 2024 to 2027 [6]. - The current market penetration rate in China is only 4-5%, indicating a potential for 2-5 times growth compared to markets like the U.S. and South Korea [6]. - Langzi has established a diversified business ecosystem in the fashion industry, including 42 medical beauty institutions, and aims to expand its national footprint [6][7]. Group 4: Strategic Approach - Langzi employs a "cultivation and acquisition" model, initially investing in medical beauty funds to identify and nurture potential acquisition targets before making direct purchases [8][10]. - The company has participated in the establishment of multiple medical beauty funds to facilitate this strategy, ensuring that acquired institutions are well-managed and profitable before integration [8][10]. - Langzi has developed a comprehensive management system for medical beauty institutions, enhancing its ability to replicate successful operational models across its acquisitions [10].

Financial Performance - In Q1 2025, the company achieved total revenue of approximately 1.399 billion yuan, a year-on-year decrease of 7.77% [2] - Gross profit margin was 59.72%, an increase of 0.61 percentage points compared to the same period last year [2] - Net profit attributable to shareholders was approximately 95 million yuan, an increase of 5.12% year-on-year [2] - Net cash flow from operating activities was approximately 174 million yuan, a decrease of 23.43% year-on-year [2] - Basic earnings per share were 0.2153 yuan, an increase of 5.13% year-on-year [2] - Total assets as of March 31, 2025, were approximately 8.004 billion yuan, a growth of 0.41% from the previous year [3] - Net assets attributable to shareholders were approximately 2.883 billion yuan, an increase of 3.42% from the previous year [3] Business Segment Performance - Medical beauty segment revenue was approximately 670 million yuan, a decrease of 9.22% year-on-year, with a gross profit of approximately 369 million yuan [3] - Women's clothing segment revenue was approximately 504 million yuan, a decrease of 5.74% year-on-year, with a gross profit of approximately 325 million yuan, an increase of 21.21% in net profit [3] - Infant and child segment revenue was approximately 221 million yuan, a decrease of 8.52% year-on-year, with a gross profit margin of 62.28% [3] Investor Relations and Strategic Planning - The company plans to accelerate the acquisition of external medical beauty institutions through its medical beauty industry fund, focusing on growth potential and compliance [6] - The strategy includes enhancing management and technological innovation, optimizing marketing channels, and improving customer satisfaction [5][6] - The company aims to avoid price competition by focusing on service quality and customer value [8] Marketing and Sales - In Q1 2025, the medical beauty sales expense ratio was 35.53%, with marketing promotion expenses accounting for 18.48% of medical beauty revenue [11] - Major marketing channels include local life platforms, short video platforms, vertical content communities, and search engines [11] - Online sales for women's clothing reached approximately 213 million yuan, a year-on-year increase of 14.31%, accounting for 42.62% of women's clothing revenue [11]