Summary of Yonghe Medical Conference Call Company Overview - Yonghe Medical is a leading player in the hair transplant industry, performing approximately 4,000 surgeries annually with revenue around 100 million RMB [2][3] - The average price per hair transplant is about 20,000 RMB, while hair care services average around 12,000 RMB, with hair transplant revenue accounting for approximately 80% of total revenue [2][3] Financial Performance - In 2024, Yonghe Medical's total revenue is projected to exceed 1.7 billion RMB, but the company is expected to incur a loss of 200 million RMB due to store opening investments [2][4] - Operating cash flow has turned positive, reaching over 200 million RMB, indicating the company's self-sustaining capability [2][4] - Profitability is anticipated to improve, with expected earnings of several million RMB in 2025 and a potential recovery to around 150 million RMB in 2026 [2][4] Competitive Advantages - Yonghe Medical has enhanced its market share through stable operations, outperforming competitors such as Dama, Xinxing, and Bilian Sheng, who have faced increased operational burdens due to heavy advertising and expansion [2][5][6] - The company holds a 30% stake in CPE Fund, which is expected to boost transaction volume and value extraction [2][6] Valuation Potential - Currently, Yonghe Medical's market capitalization is approximately 1.5 billion RMB, indicating it is undervalued [2][7] - Based on first-tier market chain company valuation standards (10x EBITDA or 1.5x PS), a reasonable valuation is estimated to be around 3 billion RMB [2][7] - If profits recover to 150 million RMB in 2026, the market capitalization could also reach 3 billion RMB based on a 20x price-to-earnings ratio [2][7] Investor Interest - Recent market activity shows a significant increase in investor interest, with daily trading volume rising from hundreds of thousands to a peak of 10 million, indicating heightened attention towards Yonghe Medical [2][8] - The East Wu Securities team has successfully identified other valuable stocks and aims to continue discovering companies with untapped potential [2][8]

Core Viewpoint - Hair loss has become a common concern among young people, leading to a rise in hair transplant discussions and services on social media platforms [6][9][11]. Group 1: Market Overview - As of 2019, over 250 million people in China suffer from hair loss, with one in six individuals affected [9]. - The demographic of hair transplant users is shifting, with a growing number of post-90s and even post-00s individuals seeking these services, and an increasing number of women entering hair transplant clinics [9][12]. - The hair care product market in China reached 62.09 billion yuan in 2023, with expectations to grow at a rate of 4% annually, potentially reaching 81.78 billion yuan by 2029 [19][20]. Group 2: Industry Evolution - The hair transplant industry has transitioned from a niche service to a mainstream necessity, with increased visibility in urban areas and on social media [12][15]. - The introduction of FUE (Follicular Unit Extraction) technology has lowered the barriers to hair transplants, making the procedure more appealing to younger individuals [28]. - The "NHT non-shaving hair transplant" technique allows for hair transplants without shaving the head, significantly reducing psychological barriers for potential clients [29][30]. Group 3: User Experience and Expectations - Users are increasingly focused on post-operative recovery and the quality of hair growth, rather than just the technical aspects of the procedure [39]. - Many hair transplant institutions are now offering comprehensive post-operative care, including follow-up consultations and personalized hair care plans [39][40]. - The perception of hair transplants is evolving from a one-time procedure to a long-term relationship with the service provider, emphasizing ongoing care and support [40][49]. Group 4: Regulatory and Competitive Landscape - The hair transplant industry is facing increased regulatory scrutiny, with new standards being implemented to ensure quality and safety [43][44]. - Institutions are adapting to these changes by enhancing their service offerings and focusing on long-term customer relationships, moving beyond just surgical procedures [46][49]. - Companies like Bilian Sheng are leading the way in integrating hair care and maintenance services into their business models, reflecting a shift towards a more holistic approach to hair health [48][51].

Core Viewpoint - The hair transplant industry in China is dominated by three major players: Yonghe, Bilian Sheng, and Dama, with Bilian Sheng being the only one yet to announce any capital operation plans despite its 20 years of establishment [1][2]. Group 1: Company Overview - Bilian Sheng was founded in 2005 by Yulina in Beijing and has recently celebrated its 20th anniversary [1]. - The company has achieved a performance agreement with Huagai Capital and has repurchased relevant equity, currently having no external capital holdings [1]. - Bilian Sheng has opened 42 directly operated institutions across the country, employing approximately 900 medical staff [2]. Group 2: Market Dynamics - The hair transplant market is experiencing a shift in demographics, with the primary audience now being young individuals aged 25 to 35, particularly young women, rather than men over 40 [2]. - There are over 250 million people suffering from hair loss in China, with the highest incidence among the post-90s generation [2]. - The market size for hair transplants is projected to reach 75.6 billion yuan by 2030, with a compound annual growth rate of 18% from 2021 to 2030 [2]. Group 3: Industry Trends - Yulina emphasizes the need for hair transplant companies to diversify beyond surgical services and develop scalp care as a second growth curve, establishing a hair medical ecosystem [3]. - The scalp care market is seen as a significant opportunity, as current medical products in this area are relatively scarce [3].

Core Insights - This year marks the 20th anniversary of Bilian Sheng Medical Group, a leading company in China's hair transplant industry, which began its journey in 2005 with the opening of its first clinic in Beijing [1] - The company has developed into a nationwide chain, serving over 500,000 clients and employing more than 1,000 medical professionals, addressing a market of over 250 million people suffering from hair loss in China [1] - Bilian Sheng emphasizes innovation and high-quality development in response to national calls, launching a nationwide gratitude feedback program and deepening its "planting and nurturing" strategy [1] Technological Advancements - The company has made significant technological advancements, starting with the introduction of the SHT non-invasive hair transplant technique in 2008, which improved the survival rate of hair follicles during procedures [2] - In 2020, Bilian Sheng launched the world's first "non-shaving hair transplant technology," allowing for hair to be harvested and transplanted without shaving, achieving a market share of 92.8% within two years [2] - Bilian Sheng has been a consistent presence on the international stage, participating in the World Hair Transplant Conference for 17 consecutive years and demonstrating its non-shaving technology at the Asian Hair Transplant Conference in 2023 [2][3] Industry Impact - Bilian Sheng's journey reflects the evolution of China's hair transplant industry from following international standards to leading in innovation, with over 20 core patented technologies that have driven significant advancements [3]

Core Viewpoint - The hair transplant market, once considered a "golden track" in the medical beauty industry, is facing challenges due to price wars, trust crises, and varying service quality, leading to a collective reflection within the industry [1][2]. Industry Overview - The number of hair transplant institutions in China has reached approximately 3,000, including large chain brands, public hospitals, and single stores [1]. - The demand for hair transplant services remains, but the entry of many players has intensified price competition, with some services now offered at prices lower than pre-pandemic levels [2]. Pricing Strategy - The industry has seen a shift from a "one-price" model to a more transparent pricing structure based on the number of hair follicles, allowing consumers to understand the costs associated with their specific needs [2][5]. - The company has moved away from low-price promotions that lead to upselling of high-priced services, emphasizing a return to medical fundamentals and transparent pricing [2][5]. Business Performance - The company's overall business performance remained stable year-on-year, with first and second-tier cities contributing 50%-60% of total revenue, and hair transplant services accounting for 65%-70% of total income [5]. - The company operates 40 hair transplant clinics globally, with a focus on maintaining a manageable number of locations rather than aggressive expansion [5]. Service Diversification - The company is exploring non-surgical aesthetic services in addition to hair transplant procedures, such as hairline transplants for women and beard transplants for men, as part of a broader strategy to enhance service offerings [6].

Core Viewpoint - The male aesthetic medicine market is rapidly growing, with an annual growth rate exceeding 20%, and is expected to reach a market size of 227.9 billion yuan by 2025, with males accounting for nearly 15% of the overall market [1][10] Group 1: Market Growth and Trends - The male aesthetic medicine market is experiencing a significant shift from a niche to a mainstream segment, with male consumers increasing by 68% from 2021 and 227% from 2019 [1][2] - In 2023, male spending on aesthetic medicine increased by 27%, with 43% of surveyed males planning to increase their spending in 2024 [1][10] - The demand for aesthetic procedures among men is diversifying, focusing on hair and skin treatments, with popular procedures including hair transplants, skin rejuvenation, and anti-aging treatments [2][3] Group 2: Influencing Factors - Workplace and social media pressures are driving men to enhance their appearance, with 76% of HR professionals believing that appearance management affects interview evaluations [3][4] - The rise of "beauty influencers" on social media platforms has encouraged more men to share their aesthetic experiences, reducing stigma and increasing acceptance of aesthetic procedures [3][4] Group 3: Industry Opportunities - The emergence of specialized male aesthetic institutions and the segmentation of male aesthetic services indicate a growing recognition of this market [4][5] - The hair restoration market is projected to grow significantly, with the global hair loss market valued at $8.77 billion in 2023 and expected to grow at a CAGR of 9.1% from 2024 to 2030 [6][7] Group 4: Light Aesthetic Medicine - Light aesthetic procedures are particularly appealing to male consumers due to their non-permanent effects and shorter recovery times, making them an attractive entry point for first-time users [12][10] - The non-surgical aesthetic market is expected to exceed 100 billion yuan by 2025, with light treatments like photorejuvenation gaining popularity [12][13] Group 5: Consumer Demographics - The average age of male aesthetic consumers is around 35, with 70% being over 30 years old, indicating a mature demographic that is increasingly focused on personal appearance [10][14] - Male consumers are categorized into three groups: those accompanying others, younger males (post-95s and 00s) who prioritize appearance, and economically stable middle-aged men seeking anti-aging solutions [14][15] Group 6: Challenges and Future Outlook - Traditional views still limit male engagement in aesthetic medicine, and the presence of unqualified institutions poses risks to consumers [16] - Regulatory measures are expected to enhance safety and standards in the aesthetic medicine industry, with a focus on ensuring qualified practitioners handle surgical procedures [16] - As societal attitudes evolve, the male aesthetic market is anticipated to become a new growth point for the industry, driving innovation and service upgrades [16]