Meiliyuan Medical Health Industry Co., Ltd. (Stock Code: 2373.HK) successfully listed on the main board of the Hong Kong capital market on January 16, 2023. The company is a leading enterprise in the field of beauty and health management services in China, the largest traditional beauty service provider and the fourth largest non-surgical medical beauty service provider. It includes four chain brands: Meiliyuan, Belyss, Yanyuan, and Xiukier. Its diversified services cover traditional beauty services, medical beauty services, as well as sub-health assessment and intervention services. It has established a wide network of stores and a large loyal customer base. Frost & Sullivan (hereinafter referred to as 'Frost & Sullivan') provides exclusive industry advisory services for Meiliyuan Medical Health Industry Co., Ltd.'s listing. We hereby extend our warmest congratulations on its successful listing.
Meiliyuan Medical Health Industry Co., Ltd. (hereinafter referred to as 'Meiliyuan') successfully listed on January 16, 2023. The company plans to issue 4,053.65 million H shares, of which 70% will be international offerings and 30% public offerings. The issue price per share is HK$19.32, raising a net amount of approximately HK$38.7 million.
During the process of listing in Hong Kong, Frost & Sullivan mainly undertook the following tasks: helping the issuer accurately and objectively understand its positioning in the target market, using objective market data to discover, support, and highlight the issuer's competitive advantages, assisting the issuer, investment banks, and other intermediaries in completing the writing of relevant parts of the prospectus (such as overview, competitive advantages and strategy, industry overview, business, and other important sections), helping the issuer communicate with the Hong Kong Stock Exchange and investors, assisting investors in quickly understanding the market ecosystem and competitive landscape, and providing feedback on various industry-related issues to the Hong Kong Stock Exchange.
Investment highlights
The company is a leading enterprise in the field of beauty and health management services in China;
The company's diversified brand portfolio provides comprehensive beauty and health management services across the entire customer lifecycle;
The company's extensive store network has accumulated a large loyal customer base;
The company provides high-quality standardized services for the construction of industry-leading digital systems;
The company has achieved rapid and sustainable business growth through internal growth and strategic acquisitions;
The company has a management team with rich industry experience and foresight.
According to the Frost & Sullivan report, as of 2021, the company:
Ranked first among traditional Chinese beauty service providers;
Ranked fourth among non-surgical medical beauty service providers in China;
We have established the most extensive store network in China in terms of direct-operated stores covering traditional beauty service markets.
Overview of Beauty and Wellness Service Management
The concept of beauty and health management services refers to a range of extensive services that assist consumers in maintaining and improving their appearance and physical health, including traditional beauty services, medical beauty services, health management services, and others. Medical beauty services can be further classified into non-surgical medical beauty services and surgical medical beauty services. Health management services refer to one-stop physical examinations, consultations, and interventions provided for healthy and sub-healthy individuals, which can be subdivided into: (i) traditional health management services using clinical medicine; and (ii) emerging sub-health assessment and intervention services using functional medicine.
Source: Frost & Sullivan report
Overview of the Beauty and Wellness Management Service Segments
Traditional beauty services include body care and facial services. Body care services mainly consist of slimming and wellness services. Facial services mainly include cleansing and moisturizing, skin whitening, and skin rejuvenation services. According to a Frost & Sullivan report, the total revenue of the traditional Chinese beauty service market increased from RMB 345.1 billion in 2017 to RMB 403.2 billion in 2021, with an annual compound growth rate of 4.0%. With consumption upgrading, the traditional beauty service market will continue to grow, and it is expected that the market size will reach RMB 640.2 billion by 2030, with an annual compound growth rate of 5.3% from 2021 to 2030.
Non-surgical medical beauty services include two categories: energy instrument projects and injection projects. Energy instrument projects use equipment that harnesses various energies such as lasers, radiofrequency, intense pulsed light, and ultrasound, mainly for skin care and body shaping, such as acne and pigment treatment, skin rejuvenation, and tightening. Injection projects mainly involve minimally invasive cosmetic methods on body tissues, such as facial or body botulinum toxin injections, collagen and hyaluronic acid skin fillers. According to a Frost & Sullivan report, the total revenue of China's non-surgical medical beauty service market has grown from RMB 401 billion in 2017 to RMB 977 billion in 2021, with an annual compound growth rate of 24.9%. It is predicted that the total revenue will reach RMB 4157 billion by 2030, with an annual compound growth rate of 17.5% from 2021 to 2030.
According to a Frost & Sullivan report, the total revenue of China's sub-health assessment and intervention service market increased from RMB 3 billion in 2017 to RMB 7 billion in 2021, with a compound annual growth rate of 23.9%. It is expected to reach RMB 29 billion by 2030, with a compound annual growth rate of 17.1% from 2021 to 2030.
Source: Frost & Sullivan report
Market competition landscape of beauty and health management service segments
Market participants in the traditional Chinese beauty service market mainly include domestic and international providers of traditional beauty services, which have independent and chain stores in China. According to a Frost & Sullivan report, Meiliyuan ranked first among Chinese competitors in terms of revenue from direct-operated beauty services in 2021.
Market participants in the non-surgical medical beauty service market in China mainly include public and private hospitals providing non-surgical medical beauty services, as well as chain and independent medical beauty institutions. According to a Frost & Sullivan report, based on the revenue from non-surgical medical beauty services in 2021, Meiliyuan ranked fourth among market participants in China.
China's Beauty and Health Management Service Market
Key market drivers
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Disposable income is increasing day by day, and the middle class is expanding
The per capita disposable income of urban residents in China increased from RMB 36,396 in 2017 to RMB 47,412 in 2021, with an annual compound growth rate of 6.8%. In addition, the number of middle-class families with annual family income above RMB 300,000 in first-tier cities has increased from about 2.82 million in 2017 to about 4.64 million in 2021. Nowadays, beauty and health management services are closely related to consumerism, showing a potential upward trend in demand.
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The awareness of beauty and health is gradually increasing
Due to rapid economic development and the upgrading of service-oriented consumption patterns in recent years, urban residents are able and more willing to spend more on maintaining and improving their health as well as attractive appearance. In addition, with the growth of the sub-healthy population and a surge in related physical and mental problems, a large number of urban residents are experiencing various sub-health symptoms, which has increased their attention to improving health and preventing diseases, such as cardiovascular disease and gastrointestinal disease.
In the beauty services and medical aesthetics sectors, Frost & Sullivan has served medical aesthetics companies such as Aimeik, Huaxi Biotechnology, as well as beauty service providers like Yixing Plastic Surgery and Rui Li Medical Aesthetics.
Data source: Frost & Sullivan
Frost & Sullivan, integrating 62 years of global consulting experience, has dedicated 25 years to serving the booming Chinese market. With a global perspective, we help clients accelerate their business growth and achieve benchmark positions in industry growth, innovation, and leadership. The healthcare industry is one of Frost & Sullivan's core areas of focus. Over the past 20-plus years, the Frost & Sullivan team has provided financing and financial advisory services, IPO industry advice, strategic consulting, and management consulting to hundreds of outstanding domestic and international biopharmaceutical, medical device, healthcare services, and internet healthcare companies. Successful listings include: Kangfeng Biotech (6922.HK), Bo'an Biotech (6955.HK), Sida (1244.HK), Meihao Medical (1947.HK), Gao Shi Medical (2407.HK), Lepu Xin Tai (2291.HK), Jian Shi Technology (9877.HK), Health Yuan (JCARE.SW), Lepu Medical (LEPU.SW), Ding Dang Health (9886.HK), BAIOSATU (2315.HK), Zhiyun Health (9955.HK), MeinGene (6667.HK), Prenetics (PRE.NASDAQ), Yunkang Group (2325.HK), Ruike Biotech (2179.HK), Lepu Biotech (2157.HK), Clear Medical (1406.HK), Baxin An (2185.HK), Yonghe Medical (2279.HK), Kailai Ying (6821.HK), Beihai Kangcheng (1228.HK), Gusheng Tang (2273.HK), Yingtong Technology (2251.HK), Clover Biotech (2197.HK), Minimally Invasive Robotics (2252.HK), Harmony Kamman (2256.HK), Kunbo Medical (2216.HK), Xianruida (6669.HK), Kangsheng Global (9960.HK), Yimai Tong (2192.HK), Tengsheng Biao Yao (2137.HK), CanSino (2162.HK), Chaoyu Ophthalmology (2219.HK), Guichuang Tongqiao (2190.HK), Hua Huang Medicine (0013.HK), Koi Pharmaceutical (2171.HK), Zhaoke Ophthalmology (6622.HK), Nature Medicine (UPC.NASDAQ), Saiseng Pharmaceutical (6600.HK), Zhaoyan New Drugs (6127.HK), Novogene Health (6606.HK), Tianyan Pharmaceutical (ADAG.NASDAQ), Beikang Medicine (2170.HK), Jianbimiao Miao Miao (2161.HK), Minimally Invasive Xin Tong (2160.HK), Rui Li Medical Beauty (2135.HK), Jiake Pharmaceutical (1167.HK), Hepcon Pharma (2142.HK), JD Health (6618.HK), Deqi Pharmaceutical (6996.HK), Rongchang Biotech (9995.HK), WuXi AppTec (2126.HK), XianSheng Pharmaceutical (2096.HK), Yunding New Energy (1952.HK), Jiahe Biotech (6998.HK), Zai Ding Pharmaceutical (9688.HK), Ocon Vist (1477.HK), Yongtai Biotech (6978.HK), Haipu Pharmaceutical (9989.HK), Kuaibo Pharmaceutical (9939.HK), Peijia Medical (9996.HK), Kangfang Biotech (9926.HK), Nuo Cheng Jian Hua (9969.HK), Tianjing Biotech (IMAB.NASDAQ), Kanglong Chemical (3759.HK), China Antibody (3681.HK), Dongyao Pharmaceutical (1875.HK), Yasheng Medicine (6855.HK), Fuhong Hanlin (2696.HK), Hansoh Pharmaceutical (3692.HK), Mabotech (2181.HK), Fangda Holdings (1521.HK), Via Biotech (1873.HK), Cornerstone Pharmaceuticals (2616.HK), Junshi Biosciences (1877.HK), WuXi AppTec (2359.HK), Innovent Biologics (1801.HK), Hua Ling Medicine (2552.HK), BeiGene (6160.HK), Gilead Sciences (1672.HK), WuXi AppTec (2269.HK), China Resources Medicine (3320.HK), Yajie Scientific Research Pharmaceutical (2633.HK), Hua Huang China Medicine (HCM.NASDAQ), Biotechnology (1548.HK), BBI Life Sciences (1035.HK), etc. In terms of the number of filings, the Frost & Sullivan healthcare team maintains an absolute leading position in Hong Kong's healthcare IPO market, consistently ranking first in market share from 2018 to 2022.
Since the listing of the first batch of companies on the Sci-tech Innovation Board in July 2019, Frost & Sullivan reports have been widely cited in the prospectuses of leading Sci-tech Innovation Board listed companies in the industry, including: Kangwe Century (688426.SH), Jinkang Protein (688137.SH), Nuo Cheng Jianhua (688428.SH), Aopu Mai Biotech (688293.SH), MicroPort Electrophysiology (688351.SH), Mengke Pharmaceutical (688373.SH), Yifang Biotech (688382.SH), Jicui Yaokang (688046.SH), Haichuang Pharmaceutical (688302.SH), Rongchang Biotech (688331.SH), Rendu Biotech (688193.SH), Shouyao Holdings (688197.SH), Heyuan Biotech (688238.SH), Yaxin Security (688225.SH), Xidi Micro (688173.SH), Mawei Biotech (688062.SH), Yahong Medicine (688176.SH), BeiGene (688235.SH), Jiahe Meikang (688246.SH), Dizhe Medicine (688192.SH), Novogene (688105.SH), Chengda Biotech (688739.SH), Geke Micro (688728.SH), Huaxi Biotech (688363.SH), Junshi Biotech (688180.SH), Zhejiang Oncology (688266.SH), BeiGene (688177.SH), Shenzhou Cells (688520.SH), and others. They are considered one of the most powerful, professional, and influential industry research institutions in the sector. We hope to work with enterprises to understand industry trends, seize development opportunities, jointly promote innovation and upgrading of China's healthcare industry, and build a healthy future.
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