Summary of the Conference Call for Meili Tianyuan Company Overview - **Company**: Meili Tianyuan - **Industry**: Health and Beauty, specifically focusing on wellness, beauty care, and medical aesthetics Key Points and Arguments Financial Performance - In the first half of 2025, Meili Tianyuan's overall operations met expectations, with both equity capital and net consumer traffic increasing by approximately 20% [2][5] - The sub-sector of sub-health showed outstanding performance with a year-on-year growth of 50% [2][5] - The beauty and health business grew by 20%, while the medical aesthetics business grew by 10%, primarily driven by offline customer traffic [2][5] - The company is confident in achieving its annual revenue target of 2 billion and profit target of 320 million [2][6][7] Business Strategy - The company will not adjust its annual performance expectations and anticipates a 30%-40% growth in the sub-health business [2][8] - The store opening strategy is "one city, one store," focusing on beauty and health memberships, with stable store numbers but increased single-store efficiency through upgrades and expansions [2][9] - Meili Tianyuan aims to enhance its net profit margin by 0.5 percentage points through supply chain optimization, digitalization, and backend cost reduction [2][11] Profitability Metrics - The gross margin for the beauty and health business is approximately 30%, with an operating profit margin of 5%-10% [2][11] - The medical aesthetics business has a gross margin exceeding 50% and an operating profit margin close to 40% [2][11] - The sub-health business has recently surpassed a gross margin of 50%, with potential to align with medical aesthetics in the future [2][11] Market Position and Growth - Currently, the market share is about 0.04%, and the company plans to increase this through organic growth, store openings, membership expansion, and mergers and acquisitions [3][14] - Meili Tianyuan has become a leader in the chain industry, having acquired a top-five player, Nairui, in 2024 [13][14] Shareholder Changes - A significant shareholder, CPE, has exited, transferring shares to other core institutional shareholders, which has improved liquidity and resolved previous low trading volume issues [4][12] Future Plans - The company is optimistic about its long-term growth and plans to continue integrating and optimizing Nairui's operations [15][21] - Future acquisitions will focus on high-quality suppliers and compatible brands that align with customer profiles [21][23] Marketing and Customer Engagement - Meili Tianyuan has three major promotional events planned for the year, with a focus on overall growth rather than individual events [27] - Customer traffic has increased across all segments, with new product launches contributing to revenue growth [28] Brand Positioning - The company is viewed as an attractive growth-oriented chain in the market, with stable growth reinforcing brand strength [29] Additional Important Information - The company is currently meeting the turnover rate requirements for the Hong Kong Stock Connect and is working towards meeting market capitalization coverage requirements [12] - The average spending per visit in the medical aesthetics sector is around 30,000 yuan, with customers visiting three to four times a year [25]