Core Viewpoint - The company, Langzi Co., Ltd. (002612), is accelerating its expansion in the fashion industry and medical beauty sector through both organic growth and acquisitions, with a recent announcement to acquire a controlling stake in Chongqing Milan Baiyu Cosmetic Surgery Hospital for nearly 100 million yuan [2][3]. Group 1: Acquisition Details - Langzi's subsidiary, Beijing Langzi Medical Management Co., plans to acquire 67.5% of Chongqing Milan Baiyu for 92.475 million yuan, based on an assessed value of 137 million yuan for the entire hospital [3][4]. - Chongqing Milan Baiyu is a specialized medical beauty hospital with a total operating area of 5,600 square meters, located in a prime area of Chongqing [3][4]. - The hospital has a comprehensive treatment capability and has obtained the necessary medical licenses to operate in the medical beauty sector [4]. Group 2: Financial Projections - The hospital's projected revenues for 2024 and Q1 2025 are 148 million yuan and 38 million yuan, with net profits of approximately 5.15 million yuan and 4.02 million yuan, respectively [4][5]. - Future revenue forecasts from 2025 to 2027 predict revenues of 111 million yuan, 157 million yuan, and 168 million yuan, with net profits of 5.09 million yuan, 9.73 million yuan, and 11.66 million yuan, respectively [5]. Group 3: Market Potential - The medical beauty industry in China is experiencing rapid growth, with a projected annual compound growth rate of 10%-15% from 2024 to 2027 [6]. - The current market penetration rate in China is only 4-5%, indicating a potential for 2-5 times growth compared to markets like the U.S. and South Korea [6]. - Langzi has established a diversified business ecosystem in the fashion industry, including 42 medical beauty institutions, and aims to expand its national footprint [6][7]. Group 4: Strategic Approach - Langzi employs a "cultivation and acquisition" model, initially investing in medical beauty funds to identify and nurture potential acquisition targets before making direct purchases [8][10]. - The company has participated in the establishment of multiple medical beauty funds to facilitate this strategy, ensuring that acquired institutions are well-managed and profitable before integration [8][10]. - Langzi has developed a comprehensive management system for medical beauty institutions, enhancing its ability to replicate successful operational models across its acquisitions [10].

Financial Performance - In Q1 2025, the company achieved total revenue of approximately 1.399 billion yuan, a year-on-year decrease of 7.77% [2] - Gross profit margin was 59.72%, an increase of 0.38 percentage points compared to the same period last year [2] - Net profit attributable to shareholders was approximately 61 million yuan, a year-on-year increase of 5.12% [2] - Net profit after deducting non-recurring items was approximately 73 million yuan, a year-on-year decrease of 6.89% [2] - Net cash flow from operating activities was approximately 174 million yuan, a year-on-year decrease of 23.43% [2] - Basic earnings per share were 0.2153 yuan, an increase of 5.13% year-on-year [2] - Return on equity was 3.36% [2] - As of March 31, 2025, total assets were approximately 8.004 billion yuan, a growth of 0.41% from the end of the previous year [3] - Net assets attributable to shareholders were approximately 2.883 billion yuan, an increase of 3.42% from the end of the previous year [3] Business Segment Performance - Medical beauty segment revenue was approximately 670 million yuan, a year-on-year decrease of 9.22% [3] - Medical beauty segment gross profit was approximately 369 million yuan, a decrease of 8.58% year-on-year, with a gross profit margin of 55.05% [3] - Women's clothing segment revenue was approximately 504 million yuan, a year-on-year decrease of 5.74% [3] - Women's clothing segment gross profit was approximately 325 million yuan, with a gross profit margin of 64.51%, an increase of 0.15 percentage points year-on-year [3] - Infant and child segment revenue was approximately 221 million yuan, a year-on-year decrease of 8.52% [3] - Infant and child segment gross profit was approximately 137 million yuan, with a gross profit margin of 62.28%, an increase of 1.78 percentage points year-on-year [3] Brand Performance - Milan Baiyu achieved revenue of approximately 302.62 million yuan, a year-on-year decrease of 8.74% [4] - Jingfu Medical achieved revenue of approximately 125.20 million yuan, a year-on-year increase of 1.13% [4] - Hanchen Medical achieved revenue of approximately 97.93 million yuan, a year-on-year decrease of 1.43% [4] - Wuhan Wuzhou achieved revenue of approximately 47.55 million yuan, a year-on-year decrease of 15.11% [4] - Changsha Yamei achieved revenue of approximately 40.70 million yuan, a year-on-year decrease of 28.61% [4] - Zhengzhou Jimei achieved revenue of approximately 25.68 million yuan, a year-on-year decrease of 16.26% [4] Inventory and Operations - As of Q1 2025, total inventory for women's clothing was approximately 646 million yuan, a decrease of 4.75% from the end of the previous year [5] - The net amount of inventory goods was approximately 512 million yuan, a decrease of 7.45% from the end of the previous year [5] - The structure of inventory improved in Q1 2025 [5]