Summary of the Conference Call for Xinyang Company Overview - **Company**: Xinyang - **Industry**: Medical Aesthetics Key Points and Arguments Financial Performance - In Q2, Xinyang recorded 67,000 service transactions and 155,000 treatment projects, with over 100,000 active users, indicating strong user engagement [2][3] - Despite an increase in net profit loss, revenue from the chain business grew by 46% quarter-over-quarter, reflecting improved operational efficiency [2][5] - The net profit loss in Q2 was primarily due to overspending in upstream and platform operations, with a total operational loss of approximately 3 million yuan more than Q1 [5] Business Strategy - Xinyang's strategy focuses on expanding its chain business in major cities while optimizing operational costs and improving efficiency [4][13] - The company plans to streamline its POP business and reduce SKUs to enhance consumer decision-making in selecting medical aesthetic institutions [20] - Xinyang aims to maintain a balance between short-term capital investment and long-term strategy by controlling costs and ensuring the chain business achieves profitability [5][23] Market Position and User Demographics - The core target demographic for Xinyang is middle-class middle-aged women, primarily seeking light medical aesthetic anti-aging services [2][8] - The company is exploring new service categories, such as nutritional drip projects, leveraging its existing user base to minimize marketing costs [8] Competitive Advantage - Xinyang employs a high-low product strategy, offering both proprietary and mainstream market products to build consumer trust and gradually shift users to its own products [9][10] - The company has successfully positioned its products, such as Fortinasti, as cost-effective alternatives to mainstream offerings [10] Growth Potential - Despite Q3 typically being a slow season for the medical aesthetics industry, Xinyang's chain business continues to show high growth, primarily driven by existing stores [11] - The company is focused on increasing the proportion of core hero products in its service offerings, which currently stands at over 30% [5] Supply Chain and Product Development - Xinyang has signed contracts with new upstream suppliers to significantly reduce product procurement costs, enhancing gross margins [7] - The company anticipates that self-developed products, such as the three-category water light and future products, will further reduce costs and increase profit margins [7] Expansion Strategy - Xinyang's expansion strategy in first-tier cities involves increasing store density in key shopping areas to lower customer acquisition and operational costs [4][13] - The company plans to adopt a saturation attack strategy in second-tier cities, expanding its presence to enhance operational advantages and brand effect [16] Operational Efficiency - The operational model of Xinyang differs from traditional medical aesthetic institutions, relying on a strong central management system to streamline operations across multiple locations [19] - The company expects mature stores in first-tier cities to achieve monthly revenue of 7,000 yuan per square meter, with potential for higher performance in select locations [24][27] Future Outlook - Xinyang's cash reserves are currently sufficient to support future expansion without immediate plans for refinancing [23] - The company is optimistic about further improving revenue per square meter through flexible pricing strategies and new product launches [27] Additional Important Insights - The medical aesthetics industry allows for premium pricing as customer willingness to pay for quality treatments remains high [3][6] - Xinyang's focus on user retention and satisfaction metrics, such as repurchase rates and active user counts, is critical for long-term success [3][5]

Core Viewpoint - The Chinese cosmetic medical industry is transitioning from "wild growth" to "quality stratification," with rapid technological advancements, clearer regulatory frameworks, and increasing consumer sensitivity to safety and pricing. The ability to achieve "standardized delivery + brand mindset + deep industry chain" will define the next decade's game rules [1]. Group 1: Business Structure and Expansion - New Oxygen has reached a significant milestone with 31 stores, becoming the largest chain in China's light medical beauty sector, with chain business revenue becoming the largest source of income for the group [1][2]. - The company is exploring whether the current high gross margin and low net profit phenomenon in the medical beauty industry can be fundamentally changed through strategic expansion and business model transformation [2]. Group 2: Market Positioning and Target Audience - The target demographic for New Oxygen is primarily the middle class, with an annual income around 100,000 yuan and a medical beauty budget of approximately 15,000 yuan, focusing on women aged 30 to 40 [22]. - The company aims to make medical beauty accessible to a broader audience, similar to the model of Sam's Club, by providing high-quality services at competitive prices [21][25]. Group 3: Operational Strategy and Differentiation - New Oxygen employs a strict recruitment process for doctors, categorizing them by skill level to ensure high-quality service delivery for standardized medical beauty procedures [24]. - The company emphasizes digital management over traditional human management to efficiently scale its operations, aiming for over 1,000 stores in the long term [26][28]. Group 4: Industry Challenges and Competitive Landscape - The medical beauty industry in China is highly fragmented, with over 20,000 institutions, where the majority are small, single-location clinics. New Oxygen's 31 stores represent a significant achievement in a market dominated by small players [26][27]. - The company faces challenges from traditional medical beauty institutions that have historically focused on high-end clientele, making it difficult to standardize services across the industry [27]. Group 5: Vertical Integration and Supply Chain Management - New Oxygen is pursuing vertical integration within the medical beauty industry, aiming to control both upstream and downstream operations to enhance cost efficiency and service quality [35][36]. - The company believes that true innovation often comes from cross-industry collaboration, which can lead to better product integration and customer experience [36]. Group 6: Future Aspirations and Personal Reflections - The CEO expresses a desire to build a widely recognized brand with a strong public reputation, indicating that the journey is ongoing and that there is still much to achieve [39]. - The company aims to balance idealism with practical business considerations, focusing on creating value for consumers while ensuring profitability [19].

Core Viewpoint - The article discusses the rising trend of cosmetic procedures among high school graduates during the summer after college entrance examinations, highlighting both the appeal and the associated risks of medical beauty treatments [1][9]. Group 1: Trends in Cosmetic Procedures - There is a noticeable increase in the number of high school graduates seeking cosmetic procedures, with patient numbers rising by approximately 30% during the summer following the college entrance exams [2][3]. - Popular procedures among high school graduates include double eyelid surgery, facial slimming injections, and laser treatments for acne and blemishes [4][5]. Group 2: Marketing Strategies by Medical Institutions - Medical institutions, both public and private, are actively promoting special offers targeting high school graduates, with discounts ranging from 60% to 80% on various cosmetic procedures [5]. - Social media discussions around cosmetic procedures as rewards for academic achievements are prevalent, indicating a cultural shift towards valuing appearance among young adults [5][12]. Group 3: Risks and Concerns - Experts warn that many cosmetic procedures may not be suitable for high school graduates, emphasizing the need for proper assessments before undergoing surgery [9][11]. - There are significant risks associated with cosmetic procedures, including potential psychological impacts and complications from unregulated practices, as illustrated by cases of patients suffering from adverse effects after seeking low-cost treatments [8][12]. Group 4: Recommendations for Parents and Youth - Experts recommend that parents guide their children in understanding the risks of cosmetic procedures and help them develop a healthy self-image [13]. - It is advised that both parents and students seek information from qualified medical institutions and be cautious of misleading advertisements that may encourage impulsive decisions regarding cosmetic enhancements [12][13].

Core Viewpoint - The article discusses the rising anxiety among young people regarding aging and the subsequent rush to medical beauty institutions, often leading to poor decisions and potential risks in treatments [3][4]. Group 1: Industry Trends - There is a growing trend of anxiety related to aging, amplified by social media, prompting individuals to seek medical beauty treatments urgently [3]. - Many consumers have become vulnerable to misleading practices in the medical beauty industry, often resulting in unnecessary treatments and high costs [4][6]. - The medical beauty industry is characterized by a mix of legitimate practices and unregulated operations, with illegal practitioners outnumbering compliant ones significantly [30][32]. Group 2: Consumer Trust and Verification - Platforms like Meituan's "放心美" (Safe Beauty) are implementing strict verification processes for medical beauty institutions, enhancing transparency and consumer trust [7][10]. - The "放心美" initiative connects directly with official data, allowing consumers to verify the legitimacy of treatments and products easily [10][41]. - The initiative has reportedly led to over 700 million verification instances, indicating a strong consumer response to the need for trust in medical beauty services [34]. Group 3: Doctor Selection and Accountability - Consumers now have access to verified information about doctors, including their qualifications and experience, which helps in making informed decisions [22][24]. - The verification process allows consumers to assess the credibility of medical professionals, reducing the reliance on institutional claims [22][23]. - The article emphasizes the importance of transparency in the selection of medical professionals, as consumers prefer to avoid risks associated with unqualified practitioners [24][42]. Group 4: Regulatory Environment - The article highlights the disparity between compliant medical beauty institutions and illegal operations, with the latter often engaging in aggressive pricing strategies due to lower operational costs [29][30]. - The medical beauty industry is undergoing a transformation towards greater compliance and transparency, driven by consumer demand for safety and quality [44][50]. - Meituan's initiatives, including the "北极星榜单" (North Star List) and "司南医生榜" (Compass Doctor List), aim to enhance the credibility of medical beauty services by providing objective assessments of institutions and practitioners [46][48].

Core Insights - A transformation regarding "appearance" is emerging among the youth, particularly after the college entrance examination [1] - The trend of cosmetic procedures is replacing traditional summer activities like driving school and travel, with significant increases in orders for procedures such as double eyelid surgery and teeth whitening [2][5] - The rise in cosmetic procedures among high school graduates is driven by social media and appearance anxiety, with over half of high school students reporting concerns about their looks [3][10] Group 1: Trends in Cosmetic Procedures - There has been a 108% increase in orders for vision correction surgeries in the week following the college entrance exam, alongside a 30% rise in teeth whitening and skin management procedures [8][10] - Medical institutions are experiencing a surge in student patients, with outpatient visits increasing by 10% to 30% and surgical volumes rising significantly during the summer months [7][8] - The trend is expected to peak between late July and August, as students prepare for university [8] Group 2: Psychological Factors - The phenomenon of "spotlight effect" contributes to heightened appearance anxiety among youth, leading to a distorted self-perception and increased worry about looks [10][11] - A survey indicates that 57.03% of high school students experience some level of appearance anxiety, with a higher prevalence among girls (61.85%) compared to boys (47.78%) [11][13] - The pressure from social media and peer comparisons exacerbates this anxiety, creating a cycle of self-doubt and concern about physical appearance [14] Group 3: Market Dynamics - The cosmetic surgery market is becoming increasingly accessible to younger demographics, with marketing strategies targeting students and offering summer discounts [20][21] - Data shows that individuals aged 18 to 24 engage most frequently with cosmetic content, with nearly half of those under 25 expressing interest in cosmetic procedures [21][22] - The trend is also evident in lower-tier cities, where 38.4% of individuals have tried cosmetic procedures, indicating a shift towards a broader consumer base [24][26] Group 4: Shift Towards Light Cosmetic Procedures - The market is seeing a preference for "light cosmetic" procedures that are less invasive and have quicker recovery times, appealing to younger consumers [28][29] - A report indicates that 61.9% of consumers plan to spend less than 10,000 yuan on cosmetic procedures in 2025, reflecting a trend towards budget-friendly options [30] - The focus is shifting from major surgeries to less invasive treatments, which are marketed as effective yet affordable solutions for beauty enhancement [29][32]

Core Insights - The healthcare market in Foshan is undergoing significant changes, with 13 top-tier hospitals leading the province's second-tier cities in quantity, establishing Foshan as a medical hub in the Pearl River West Bank [1][3] - The opening of the new campus of Foshan Second People's Hospital marks a pivotal moment in the city's healthcare landscape, aiming to alleviate space constraints and support the strategic expansion of medical resources [3][4] - The expansion of healthcare facilities is driven by both urbanization and the need for local hospitals to overcome market saturation and spatial limitations [6][9] Group 1: Expansion and Resource Optimization - Foshan's healthcare sector is rapidly evolving, with policies focusing on urban-rural coordination and the integration of traditional and modern medicine [2][4] - The new campus of Foshan Second People's Hospital is a key project, covering 120 acres with a total investment of 3.375 billion yuan, aimed at addressing the healthcare needs of the growing population in the western region [4][6] - The expansion trend is not isolated, as other hospitals are also increasing their capacities and services, leading to a more competitive healthcare environment [5][6] Group 2: Challenges in Healthcare Delivery - The phenomenon of patients preferring large hospitals for minor ailments indicates a systemic issue in the healthcare delivery model, where primary care facilities struggle to attract patients [8][9] - The dual challenge of resource allocation and patient retention is evident, as larger hospitals absorb patients from smaller facilities, creating a cycle of inefficiency [9][10] - The competition among hospitals has led to a homogenization of services, with many institutions offering similar specialties, which may dilute their unique strengths [10][11] Group 3: Talent Acquisition and Retention - The competition for medical talent is intensifying, with hospitals offering substantial incentives to attract skilled professionals, reflecting a broader trend in the healthcare sector [14][15] - Despite efforts to retain talent, there is a notable outflow of experienced professionals to larger cities, highlighting the challenges faced by local hospitals in maintaining a skilled workforce [15][16] - The emergence of private hospitals with capital backing is diversifying the employment landscape for healthcare professionals, further complicating the talent retention issue [16][17] Group 4: Strategic Integration and Differentiation - The establishment of integrated healthcare groups, such as the Dali Medical Group, represents a new model for enhancing service delivery and operational efficiency [18][19] - The push for differentiated services among hospitals is gaining traction, with specific institutions focusing on particular specialties to avoid internal competition and enhance patient care [19][20] - The ongoing evolution of Foshan's healthcare system will require a balance between expansion and specialization to achieve high-quality healthcare outcomes [20]

Group 1 - The UK beauty industry is experiencing significant growth, with a market size of £30.4 billion, growing at a rate four times faster than the overall economy [1] - Non-surgical treatments and beauty services are the fastest-growing segments, with a projected growth rate of 15% in 2024 [1] - The beauty industry's direct contribution to the UK GDP exceeds that of the sports and entertainment sectors, accounting for 1.1% of the total economy [1] Group 2 - The industry is expected to create 48,000 new jobs in 2024, primarily in salons and clinics, bringing total direct employment to 496,000, surpassing the public utilities and telecommunications sectors [1] - Social media and celebrity influence are driving trends, with 23% of men aged 18-34 having tried cosmetic procedures, slightly higher than women in the same age group [1] - The number of men receiving facial injections has increased by 70% over the past two years [1] Group 3 - However, the UK beauty products export value is projected to decline to £4.3 billion in 2024, significantly lower than the peak around 2010 [2] - The decline in exports is attributed to Brexit and increased global trade barriers, prompting calls for policymakers to alleviate export pressures [2] - Despite strong fundamentals, the growth rate of the UK medical aesthetics industry is expected to slow to around 3% in 2025 due to cautious consumer spending on beauty [2]

Investment Rating - The report indicates a strong growth potential for the non-surgical medical aesthetic industry in China, with an expected compound annual growth rate (CAGR) of over 20% in the coming years, positioning it as one of the fastest-growing markets globally [9][10]. Core Insights - The Chinese non-surgical medical aesthetic market has surpassed 150 billion RMB in 2023 and is projected to exceed 250 billion RMB by 2025, driven by rising disposable income, changing beauty standards, and technological advancements [9][10]. - The market is characterized by a significant shift towards non-surgical procedures, with injectables like hyaluronic acid and botulinum toxin leading the growth, supported by technological innovations in materials and devices [9][10]. - The industry is undergoing a transformation towards compliance and regulation, with increased scrutiny from government bodies aimed at eliminating illegal practices and ensuring consumer safety [9][10]. Summary by Sections Chapter 1: Overview of the Non-Surgical Medical Aesthetic Industry - The non-surgical medical aesthetic industry is defined as a blend of medical and cosmetic services that utilize non-invasive or minimally invasive techniques for skin care and rejuvenation [12]. - The industry has evolved through three phases: exploration (pre-2015), rapid growth (2015-2021), and regulation and integration (2022-present) [19][21]. - The macro environment analysis indicates a tightening regulatory framework, rising disposable income, and shifting societal beauty standards as key drivers of industry growth [25][27]. Chapter 2: Market Size and Consumer Insights - The market size has grown from approximately 65 billion RMB in 2018 to over 150 billion RMB in 2023, with a CAGR exceeding 20% [30][31]. - Non-surgical procedures are increasingly favored due to their lower risk and quicker recovery times, leading to a growing market share for these services [34][35]. - Consumer demographics show a significant trend towards younger consumers, with those born in the 1990s and 2000s becoming the primary market [39]. Chapter 3: Industry Chain Analysis - The industry chain consists of three segments: upstream (product and equipment manufacturers), midstream (medical aesthetic service providers), and downstream (marketing and referral platforms) [45]. - Upstream manufacturers face high technical barriers and are experiencing a shift towards domestic brands replacing international ones, driven by innovation and cost advantages [46][47]. - Midstream service providers are characterized by intense competition and high customer acquisition costs, prompting a trend towards brand consolidation and chain operations [49]. Chapter 4: Competitive Landscape and Key Players - The competitive landscape shows a high concentration of international brands in the high-end market, while domestic brands are rapidly gaining market share through innovation and localized strategies [46][47]. - The report highlights key players such as Ai Meike and Huaxi Biological, which are leveraging technological advancements to challenge established foreign brands [47]. Chapter 5: Regulatory Policies and Compliance - The regulatory environment is becoming increasingly stringent, with multiple government agencies implementing measures to ensure compliance and consumer safety [24][25]. - The report outlines the impact of these regulations on market dynamics, emphasizing the need for companies to adapt to a more compliant operational framework [24][25]. Chapter 6: Industry Challenges, Opportunities, and Future Trends - The industry faces challenges such as price wars and a shortage of qualified professionals, but also opportunities in market penetration and technological innovation [8][10]. - Future trends indicate a shift towards personalized and diversified consumer demands, with an emphasis on natural results and preventive care [44].

Industry Overview - The Chinese medical beauty market is projected to reach 312 billion yuan in 2024, representing a growth of 14.8% compared to 2023 [1] - The demand for medical beauty in China is still on the rise, with a notable increase in male participation in the sector [3][5] Market Trends - The global medical beauty industry shows that the United States leads in the number of procedures, followed by Brazil, Japan, China, and India [3] - Common procedures for women include liposuction, breast augmentation, eyelid surgery, abdominal contouring, and breast lift, while men primarily undergo eyelid surgery and gynecomastia correction [3] Consumer Behavior - Many individuals pursue medical beauty not solely for aesthetics but also for self-confidence enhancement [6] - There is a growing trend among younger generations to invest time in beauty routines, raising questions about the motivations behind such practices [6][12] Psychological Aspects - The aging process is a natural phenomenon, and while medical beauty can delay visible signs of aging, it cannot prevent them [7] - The perception of beauty and self-worth is increasingly influenced by societal standards and media portrayals, leading to a complex relationship between self-esteem and appearance [6][12] Aesthetic Diversity - There has been a shift from a homogenized beauty standard, often referred to as "internet celebrity face," to a more diverse representation of beauty in media and entertainment [9] - The industry is moving towards emphasizing individual features rather than conforming to a singular aesthetic [9] Private Aesthetic Procedures - Private aesthetic procedures, particularly in the genital area, are gaining attention, with a focus on addressing both medical and cosmetic needs [14][15] - There is a need for better education and destigmatization surrounding these procedures, as many women may have legitimate health concerns that require attention [15][16]

Core Viewpoint - The beauty and cosmetic surgery market is expanding due to the increasing demand for "self-care consumption," despite ongoing issues with pricing irregularities in the industry [1][2]. Group 1: Regulatory Developments - The National Healthcare Security Administration has issued a "Guideline for the Pricing of Cosmetic Surgery Medical Services (Trial)," establishing 101 cosmetic surgery projects to standardize pricing and regulate medical institutions' pricing behavior [1][3]. - The guideline does not change the market-adjusted pricing management method but aims to unify pricing items and promote a more transparent and orderly market environment [1]. Group 2: Project Classification and Pricing - The guideline provides detailed classifications for cosmetic surgery projects, such as subdividing lip enhancement into various categories like "red lip" and "lip pearl" [2]. - For well-known projects like hair transplantation, the guideline introduces a "taxi-style pricing scheme," where pricing is based on the number of units beyond a basic charge [2]. Group 3: Industry Impact and Future Directions - The measures are expected to help consumers understand the essence of the technology through project names and address the confusion of "same name, different price" and "same price, different quality" among medical institutions [2]. - The guideline allows qualified medical institutions to set additional and expanded items conditionally, which can facilitate the introduction of new technologies and materials into services [2].