Group 1 - The core viewpoint of the report is that Meili Tianyuan Medical Health (02373) is expected to maintain strong financial performance, with projected revenues of 3.05 billion, 3.41 billion, and 3.76 billion RMB for 2025-2027, and net profits of 320 million, 380 million, and 440 million RMB respectively [1] - The company achieved record high adjusted net profit in H1 2025, with revenues, net profit, and adjusted net profit reaching 1.46 billion, 170 million, and 190 million RMB respectively, representing year-on-year growth of 28%, 36%, and 38% [1] - The operating cash flow for H1 2025 was 410 million RMB, an increase of 84% year-on-year, with cash and cash equivalents amounting to 2 billion RMB, up 28% [1] Group 2 - The beauty and health services segment generated 810 million RMB in revenue, a year-on-year increase of 30%, while the medical beauty services segment achieved 500 million RMB, growing by 13% [1] - The sub-health medical services segment saw a remarkable revenue increase of 108%, reaching 150 million RMB, with the number of outpatient clinics expanding to 11 [1] - The Women's Health Center, a key part of the sub-health medical business, reported a revenue growth of 173% in H1 2025 [1] Group 3 - The company increased its stake in Nairu to 90%, enhancing profitability, with Nairu's revenue reaching 280 million RMB in H1 2025 and adjusted net profit margin rising from 6.5% to 10.4% [2] - Nairu, recognized as the "First Brand of Intelligent Beauty and Health" by Frost & Sullivan, is implementing an AI-driven transformation project called "Intelligent Beauty and Health 2.0 System" [2] Group 4 - The company has announced a "Capital Market Value Enhancement Plan" aimed at increasing shareholder returns, optimizing capital structure, and promoting sustainable development, with a total of 300 million RMB in dividends declared over the past three years [3] - The first dividend payment from the shareholder return plan is scheduled to be distributed by September 26, 2025, at a rate of 0.52 HKD per share [3]

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 - Meili Tianyuan Medical Health Industry Co., Ltd. reported a strong performance for the first half of 2025, with revenue of 1.46 billion yuan, a year-on-year increase of 28.2%, and a net profit of 170 million yuan, up 35.5% [1] Financial Performance - Revenue for the first half of 2025 reached 1.46 billion yuan, reflecting a 28.2% year-on-year growth - Net profit was 170 million yuan, representing a 35.5% increase compared to the previous year - Gross margin improved to 49.3%, up 2.3 percentage points year-on-year - Cash and cash-equivalent assets amounted to 2 billion yuan, a 27.5% increase year-on-year - Operating cash flow for the first half was 410 million yuan, showing an 84.4% year-on-year growth [1] Business Segments - The company operates in three main business segments: Beauty and Health Services, Medical Beauty Services, and Sub-health Medical Services - Beauty and Health Services generated 810 million yuan in revenue, a 29.6% increase, with a gross margin of 42.1% [2] - Medical Beauty Services saw revenue rise to 500 million yuan, a 13.0% increase, with a gross margin of 56.9% [2] - Sub-health Medical Services experienced explosive growth, with revenue of 150 million yuan, up 107.8%, and a gross margin of 63.1% [2] Market Trends - Consumer demand is shifting towards emotional connections and spiritual resonance, with emotional value significantly influencing the younger generation's purchasing decisions - The emotional economy market in China is expected to reach 2.3 trillion yuan by 2025, indicating a potential for explosive growth [1] Store Network and Expansion - As of June 30, the company had a total of 522 stores, including 273 direct-operated and 279 franchised or managed stores - The company has a strong presence in first-tier cities, with 157 direct-operated stores in Beijing, Shanghai, Guangzhou, and Shenzhen, contributing over 60% of total revenue [3] Shareholder Return Plan - The company announced a shareholder return plan, committing to distribute at least 50% of annual net profit as dividends over the next three fiscal years, barring special circumstances - The first dividend payment of 0.52 HKD per share is scheduled for distribution by September 26 [3] Acquisition Strategy - The company has pursued rapid expansion through acquisitions, including a 70% stake in the second-largest beauty brand, Nairui'er, for 350 million yuan - Nairui'er generated revenue of 277 million yuan in the first half of 2025, with an adjusted net profit margin increasing from 6.5% to 10.4% post-acquisition [4][5] - The company aims to replicate the successful integration of Nairui'er to explore further industry consolidation opportunities [5]