Summary of the Medical Aesthetics Industry Conference Call Industry Overview - The medical aesthetics industry is experiencing a slowdown in revenue growth, with a slight year-on-year decline expected in 2025. Some institutions have reported declines of up to 50%, while large chain institutions and compliant small to medium-sized institutions continue to grow, indicating a market divergence [1][6]. - The industry is facing intensified price competition, leading to a continuous decrease in average transaction value. The net profit margin is expected to remain between 8% and 10% in 2025, similar to the previous year [1][8]. Key Insights - **Revenue Growth**: The overall revenue growth for the medical aesthetics industry in 2025 is projected at 5%, down from 7% in 2024. This slowdown is attributed to a 4% decrease in average transaction value, despite a 9% increase in customer traffic [3]. - **Customer Dynamics**: The number of new customers has decreased, particularly among university students and young consumers, influenced by stricter advertising regulations and seasonal factors [4][5]. - **Market Regulation**: Stricter regulations since 2022 have significantly impacted the market, especially affecting younger consumers who are more reliant on advertising and influencer marketing [5]. Competitive Landscape - There is a clear differentiation between large chain institutions and smaller ones. Large chains like Langzi, Yilai Mei, and Lige maintain single-digit growth despite a slowdown, while many smaller institutions, particularly in the light medical aesthetics sector, are experiencing declines [7]. - The competition among upstream medical aesthetics products is intensifying, yet the gross profit margin remains high, typically above 90% [10]. Product Insights - **PDRN Market Potential**: The PDRN (Polydeoxyribonucleotide) market is expected to grow significantly, with relevant registrations anticipated in 2026. PDRN offers advantages in skin management over traditional hyaluronic acid and collagen due to its anti-inflammatory and tissue repair properties [13][14]. - **Collagen Market Trends**: The recombinant collagen market still has growth potential, but the growth rate may slow down due to increased competition and lower procurement prices. The effectiveness of low-cost collagen products is comparable to high-cost alternatives, with differences mainly in brand influence and physician training [17][18]. Financial Performance - The company's collagen sales growth from January to November 2025 is 53%, down from 79% in 2023 and 66% in 2024. Despite this decline, the growth rate remains high, and market share is expected to continue increasing, although at a slower pace [19]. - The average transaction value is expected to continue declining, which may pressure profit margins. The company is exploring cost-reduction strategies, including outsourcing production [9][28]. Customer Retention and Acquisition - The increase in repeat purchases from existing customers is a key driver of overall customer traffic growth, with the average number of repeat purchases rising from 5.5 to 6.5 times per year [26]. - The cost of acquiring new customers has increased by at least 5% compared to the previous year, influenced by reduced marketing expenditure and increased costs across various online platforms [28]. Future Outlook - The medical aesthetics industry is expected to continue growing in the coming years, but at a slower rate than in the past. The concentration of the industry is likely to increase, with higher barriers for new entrants requiring refined operations and strong customer retention strategies [22][23][24]. - The market may see a consolidation of smaller, poorly performing institutions, leading to a more robust and competitive landscape for compliant and capable companies [22].

Core Viewpoint - The report from CITIC Securities highlights the significant growth potential in China's medical aesthetics industry, driven by increasing awareness and an aging customer base, with injectable products expected to outpace overall industry growth due to supply-side improvements [1] Market Growth - Despite short-term pressures, the long-term outlook for the medical aesthetics market is positive, with a projected terminal scale exceeding 230 billion yuan in 2023 and a CAGR of 10%-15% from 2024 to 2027; injectables are expected to grow at a CAGR of 20%-30% over the next five years [1] - The report indicates that the number of medical aesthetic treatments per thousand people in South Korea, Japan, and China are 91 (2019), 71 (2023E), and 34 (2023E) respectively, suggesting significant room for growth driven by increased awareness and an aging population [1] Development Trends - The competitive landscape for products is expected to evolve into a U-shaped pattern, with initial high concentration due to regulatory barriers, followed by increased competition, and ultimately a return to higher concentration as operational capabilities differentiate companies [2] - The medical aesthetics industry is characterized by "limited innovation," making operational capabilities increasingly important; leading companies are expected to benefit from their established operational strengths [2][3] Investment Recommendations - There are opportunities for product breakthroughs, particularly in non-hyaluronic acid materials, with over 110 approved injectable products in China, and limited competition in other categories; new product approvals, especially in botulinum toxin and other innovative materials, are anticipated to drive market growth [2] - The report emphasizes the importance of comprehensive operational capabilities, with leading companies expected to maintain their competitive edge in a market characterized by limited innovation [3]