Core Viewpoint - The company maintains its financial forecast for Meili Tianyuan Medical Health (02373), projecting revenues of 3.05 billion, 3.41 billion, and 3.76 billion RMB for 2025-2027, with net profits of 320 million, 380 million, and 440 million RMB respectively, assigning a target price of 45 HKD for 2025 based on a 30x PE ratio [1] Financial Performance - In H1 2025, the company achieved record high adjusted net profits of 1.9 billion RMB, with total revenues of 14.6 billion RMB, reflecting year-on-year growth of 28%, 36%, and 38% respectively [3] - Operating cash flow reached 4.1 billion RMB, an increase of 84% year-on-year, with cash and cash-equivalent assets totaling 2 billion RMB, up 28% [3] Business Segmentation - The beauty and wellness services segment generated 8.1 billion RMB in revenue, a 30% increase year-on-year, while medical beauty services brought in 5 billion RMB, growing 13% [3] - The sub-health medical services segment saw a remarkable revenue increase of 108%, reaching 1.5 billion RMB, with the number of outpatient clinics expanding to 11 [3] - The Women's Care Center, a key part of the sub-health medical business, reported a 173% year-on-year revenue growth in H1 2025 [3] Strategic Acquisitions - The company increased its stake in Nairu to 90% by acquiring an additional 20% share, resulting in enhanced profitability, with Nairu's revenue reaching 2.8 billion RMB and adjusted net profit margin rising from 6.5% to 10.4% [4] Shareholder Returns - The company has announced a "Capital Market Value Enhancement Plan" aimed at improving shareholder returns, optimizing capital structure, and promoting sustainable development, with a total of 300 million RMB in dividends declared over the past three years [5]

Core Viewpoint - The company reported strong financial performance for the first half of 2025, with significant revenue and profit growth, showcasing the effectiveness of its business model and strategic initiatives [1][24]. Financial Performance - Revenue for the first half of 2025 reached 1.46 billion yuan, a year-on-year increase of 28.2% [1] - Net profit rose to 170 million yuan, reflecting a substantial growth of 35.5% year-on-year [1] - Adjusted net profit was 191 million yuan, up 37.8% year-on-year, with an adjusted net profit margin of 13.1%, marking a historical high [1] - Cash and cash-equivalent assets amounted to 2 billion yuan, a 27.5% increase year-on-year, with operating cash flow of 410 million yuan, up 84.4% year-on-year [1] Business Segments - The core beauty and health services generated 810 million yuan in revenue, a 29.6% increase year-on-year, with a gross margin of 42.1% [3] - Medical beauty services achieved revenue of 500 million yuan, a 13.0% increase year-on-year, with a gross margin of 56.9% [5] - The sub-brand for sub-health medical services saw explosive growth, with revenue of 150 million yuan, a 107.8% increase year-on-year, and a gross margin of 63.1% [8] Strategic Initiatives - The company has enhanced its digital marketing and multi-channel operations, with private domain operations contributing over 46% of new memberships [5] - The acquisition of a 90% stake in the brand Nairu has shown significant integration effects, with Nairu's revenue reaching 277 million yuan and an adjusted net profit margin increasing from 6.5% to 10.4% [11] - The opening of a flagship clinic in Guangzhou, covering nearly 5,000 square meters, aims to meet the deep health and wellness needs of customers in the Greater Bay Area [14] Shareholder Structure and Market Value - The company has optimized its shareholder structure, with new significant investors enhancing strategic development [18] - A capital market value enhancement plan has been proposed, including a commitment to distribute at least 50% of annual net profit as dividends over the next three fiscal years [18] - The company's market capitalization has increased by 90% year-to-date, reflecting strong market recognition of its value [18] Business Model - The company has developed a unique "dual beauty + dual health" business model, which integrates beauty and medical services to create a competitive advantage [20] - This model allows for efficient collaboration across business segments, maximizing long-term value for members and addressing high customer acquisition costs [21] - The average annual revenue per direct store has exceeded 10 million yuan, with medical beauty and sub-health services accounting for over 45% of total revenue [22]

Group 1 - The company is addressing high operational costs in the industry through internal growth and external acquisitions, solidifying its leading position with advantages in brand strength, channel network, and customer base [1][2] - The major shareholder CPE has successfully exited, leading to an optimized shareholder structure [1] - The company plans to increase its stake in Guangzhou Nairui'er, which, along with the improved liquidity from the optimized shareholder structure, is expected to enhance valuation [1] Group 2 - The company aims to enhance its capital market value with a plan launched in March 2025, focusing on three strategic initiatives: increasing the dividend payout ratio, optimizing the shareholder structure, and implementing a long-term incentive mechanism for management [2] - The company announced plans to further acquire a 20% stake in Guangzhou Nairui'er, increasing its ownership to 90%, which is expected to significantly boost net profit and earnings per share [2] - The company is leveraging its strong brand, channel network, and customer base in the beauty and health management sectors to overcome high operational costs, aiming for further expansion and consolidation of its leading position [2]

Core Viewpoint - The company has proposed a capital market value enhancement plan for 2025-2027, focusing on increasing dividend payouts, optimizing shareholder structure, and implementing long-term incentive mechanisms for management [1] Group 1: Capital Market Value Enhancement Plan - The company aims to use no less than 50% of its annual net profit attributable to shareholders for dividends from 2025 to 2027, barring special circumstances [1] - The company plans to attract high-quality long-term institutional investors to improve market liquidity and trading activity [1] - A core management equity incentive plan will be implemented, with performance indicators covering both revenue and profit growth for 2025-2027 [1] Group 2: Shareholder Structure Optimization - As of June 25, 2025, CPE has reached agreements to sell approximately 51 million shares (about 21.77% of total shares), with investors including foreign long-term healthcare funds and leading international hedge funds [1] - The exit of CPE is expected to alleviate upward pressure on the company's stock price and enhance market liquidity through the entry of long-term funds [1] Group 3: Business Growth and M&A Opportunities - The company has shown stable internal growth, with a 14.5% year-on-year increase in rights fees to 510 million yuan and a 9.7% increase in sales to 550 million yuan during the Goddess Festival promotion [1] - The company plans to increase its stake in Nairui by investing 100 million yuan to acquire 20% of its shares, raising its ownership to 90% [1] - The company is positioned to potentially acquire other leading beauty brands to further increase market share and performance [1] Group 4: Profit Forecast - The company has adjusted its profit forecast, expecting net profits attributable to shareholders to be 290 million, 340 million, and 380 million yuan for 2025-2027, representing year-on-year growth of 25%, 17%, and 14% respectively [2] - The corresponding price-to-earnings ratios based on the closing price on July 3 are projected to be 22, 19, and 16 times for the respective years [2]