Core Viewpoint - New Oxygen aims to become a disruptor in the medical beauty industry by launching its own light medical beauty brand, "New Oxygen Youth Clinic," to create a "high quality, low price" model in response to the changing consumer demographics and market dynamics [1][2][3] Company Strategy - New Oxygen has transitioned from being a medical beauty e-commerce platform to establishing its own light medical beauty clinics, targeting a broader consumer base beyond high-net-worth individuals [2][3] - The company plans to integrate and optimize its supply chain to lower costs and enhance service quality, addressing consumer pain points related to high prices and inconsistent treatment quality [3][8] Market Dynamics - The light medical beauty market in China reached a scale of 1,461 billion yuan in 2023, accounting for 80.8% of total medical beauty consumption, with a year-on-year growth of 5.8% [7] - The market is expected to grow to 4,157 billion yuan by 2030, nearly double that of surgical medical beauty [7] Financial Performance - New Oxygen's light medical beauty chain business reported a revenue increase of 551.4% year-on-year to 98.88 million yuan in Q1 2025, contributing 33.3% to total revenue [3] - The company anticipates its medical treatment service revenue to reach 120-140 million yuan in Q2 2024, representing a year-on-year growth of 337%-410% [3] Competitive Landscape - New Oxygen's pricing strategy has led to friction with upstream manufacturers over pricing authority, highlighting a shift in market dynamics where pricing should be determined by supply and demand rather than manufacturer control [5][6] - The company has made strategic acquisitions to strengthen its position in the upstream medical beauty market, including a significant investment in a medical device company [7][8] Industry Challenges - The medical beauty industry faces challenges such as declining profits and increasing scrutiny from regulators, necessitating a transformation in business models and practices [3][11] - New Oxygen aims to address safety and quality concerns in the industry by ensuring rigorous training for its medical staff and maintaining high operational standards [10][12] Future Outlook - The industry is expected to evolve towards a model where professional doctors operate clinics, ensuring safety and quality, alongside large chain institutions like New Oxygen Youth Clinic [11][13] - The company envisions a future where transparent pricing and service quality will become the norm, making light medical beauty accessible to a wider audience [12][13]

Investment Rating - Industry rating is "Outperform" [1] Core Insights - The report focuses on the transformation of the medical beauty industry, particularly the evolution of the company "Xinyang" as a pioneering medical beauty e-commerce platform aimed at bridging information gaps in the sector [2][5] - The company faced challenges due to weakened demand and increased competition from internet platforms, leading to a significant decline in GMV (Gross Merchandise Volume) by 55.4% to 1.43 billion yuan in 2022 [2][16] - However, the company is exploring new avenues through supply chain integration and the establishment of "Xinyang Youth Clinics," which have shown promising growth in revenue [2][35] Summary by Sections Xinyang - The First Medical Beauty E-commerce Platform - Xinyang was founded in 2013 to address information asymmetry in the medical beauty market, achieving a monthly active user base of 8.5 million by 2021 [2][5] - The platform has attracted significant investment from top venture capital firms, with the founders and major shareholders holding a combined 58.9% stake as of February 2025 [2][7] Pressure and Adversity: Weak Demand and E-commerce Diversion - The company experienced a decline in performance due to offline consumption fatigue and increased competition from platforms like Meituan and Dazhongdianping, leading to a projected revenue drop to 1.47 billion yuan in 2024 [2][19] - The first quarter of 2025 saw a revenue decrease of 6.6% to 300 million yuan, with a net loss of 33 million yuan [2][22] Reversal and Breakthrough: Supply Chain and Service Exploration - Xinyang is expanding into the upstream medical device sector and has launched the "Xinyang Youth Clinics" brand, with 32 locations established across nine cities by July 2025 [2][35][38] - The revenue from treatment services reached 98.83 million yuan in Q1 2025, marking a year-on-year increase of 551.4% [2][35] Financial Performance - The company reported total cash of 1.02 billion yuan as of Q1 2025, with goodwill impairment risks cleared [2][26] - The revenue and profit trends indicate a challenging environment, with a projected revenue of 1.47 billion yuan in 2024 and a net loss of 590 million yuan [2][19][22] Supply Chain Developments - Xinyang has made strategic acquisitions and partnerships to enhance its supply chain, including a 790 million yuan acquisition of a laser company and exclusive distribution agreements for high-end hyaluronic acid products [2][32][33] Clinic Expansion and Service Offerings - The "Xinyang Youth Clinics" focus on light medical beauty services, with a strong emphasis on standardized service delivery and efficient management [2][41][44] - The clinics have demonstrated strong profitability metrics, with a monthly average revenue of nearly 5 million yuan and a profit margin of 17% [2][44]