The medical beauty industry is huge, China has become a global medical beauty country
According to 2017, China’s medical beauty market to achieve output value of more than 800 billion yuan, the industry’s annual growth rate of more than 15, %以上，而上游企业的销售增长迅猛，年增速超20%
In 2017, China’s total number of medical U.S. cases exceeded 10 million, with a compound growth rate of more than 40%, surpassing Brazil as the world’s second-largest medical beauty after the U.S.
In terms of physician numbers, there were more than 40,000 plastic surgeons worldwide in 2014, with China having 2,800, or 6.9% of the world’s total. China has become a global plastic surgery power, both in terms of the number of plastic surgery projects and the number of plastic surgeons.
Source: China Medical Beauty Industry Analysis and Future Investment Strategy Research Forecast Report 2016-2022 released by China Industry Information Network
Medical beauty industry at present, the only one with bargaining power is the medical and aesthetic terminal institutions
The industrial chain link of the medical and aesthetic industry is mainly concentrated in the upstream pharmaceutical, equipment manufacturers and downstream medical beauty institutions, the midstream is mainly the agents and distributors of drugs and equipment, coupled with entertainment culture, advertising media and medical and aesthetic intermediary O2O platform and other environmental factors closely related to the development of the industry, together constitute the ecological circle of the medical and aesthetic industry.
From the industry point of view, upstream manufacturers due to the relative regulation of the industry, industry is relatively concentrated, leading companies have higher profit margins, but in the medium and long term, downstream terminal integration to enhance the space is greater, the future may become the main battleground for all parties to compete;
China's medical beauty institutions show an explosive growth rate, according to the nature of public hospitals and private hospitals.
China’s mid-range medical institutions more than 10,000, and still at the rate of about 20 per year %左右的速度爆发式增长。主要分散于北上广等经济发达地区，西部市场也逐渐发展起来。从市场占比来看，民营机构占整个市场份额的接近80%dominated.
Although China’s medical beauty services are involved in many subjects, but most of the small scale, the industry is highly dispersed. Therefore, the integration of medical and American institutions to enhance the space is greater, the future may become the main battleground of all parties, medical and American hospital nature classification includes public hospitals and private hospitals. Medical beauty chain advantages outstanding, and even with the help of capital to achieve leapfrog development. Medical and aesthetic industry is in the making, large and medium-sized private chain institutions show high sales costs, low profit margin characteristics.
With the expansion of chain operation scale, its large-scale supply chain advantage, the advantage of the cost of customers under the brand effect and the advantages of talent resources under standardized management will be strengthened, with strong scale effect and brand effect of medical and aesthetic institutions, its passenger cost and cost proportion will continue to decline, profitability will gradually improve.
Medical beauty has both medical and consumer properties, large and medium-sized standardized plastic surgery hospital chain group can effectively share marketing costs to reduce unit cost, improve profitability, but has not yet appeared super-large chain medical beauty group, industry integration space is larger, medical and beauty chain institutions are expected to stand out in the next 3-5 years in the wave of industry integration, and even with the help of capital to achieve leapfrog development.
Medical beauty is transitioning from a "wild period" to a "standard period": high-quality enterprises will grow rapidly at a much higher rate than the industry level
Since the promulgation of the Measures for the Administration of Medical Beauty Services in 2002, the supervision of the medical and aesthetic industry by the relevant departments of the state has become more and more stringent, and the market supervision is expected to mature gradually. Standardized market favors with formal production batch of product manufacturers, distributors and formal medical beauty institutions, the future industry concentration is expected to greatly improve, high-quality enterprises will be much higher than the industry average growth rate of rapid growth.
Medical and aesthetic hospital classification: all levels of medical beauty institutions have strict department setting requirements, whether it is plastic surgery, or laser beauty equipment project, or micro-plastic injection, all interventional therapy belongs to the category of medical beauty, and medical beauty as a first-level discipline, for institutions must obtain a “medical institution license” to provide medical beauty treatment services. On this basis, according to the Basic Standards for Medical Beauty Institutions issued by the Health Planning Commission (formerly the Ministry of Health) in 2008, all types of medical beauty institutions, including beauty hospitals, medical beauty clinics, medical beauty clinics, etc., need to meet the basic standards of bed and dentist number, department setting, staffing, building area, etc.
Medical and aesthetic physicians must meet the requirements of registered medical practitioners, relevant clinical disciplines work experience and training, provincial health administrative departments four conditions
According to the Measures for the Administration of Medical Beauty Services of the Ministry of Health, physicians who carry out medical beauty activities must obtain the qualification of a medical practitioner in order to provide medical beauty services. To provide medical beauty services independently, a medical practitioner is also required to be qualified as a attending physician. The attending physician who implements the medical beauty project must meet the four conditions of registered medical practitioner, relevant clinical subject work experience and training, and provincial health administrative departments at the same time;
According to the Ministry of Health, “Beauty medical institutions, medical beauty department (room) basic standards (trial)”:
- Beauty hospital: at least 6 attending physicians with the qualification of relevant deputy director physician, at least 1 attending physician with the qualification of attending physician in each department;
- Medical beauty clinic: at least 5 practicing physicians, of whom at least 1 is qualified as the relevant deputy director of physicians or above the attending physician;
- Medical Beauty Clinic and Medical Beauty Hospital Section: There is at least 1 attending physician in each subject who is qualified as a attending physician in the relevant profession. Medical materials, pharmaceutical and equipment certification and regulatory agencies in product manufacturing and circulation, uric acid, botulinum toxin and other products, the proportion of aquatic goods, counterfeit goods is very high, with the formal production of batch products only accounted for 20-30% of the total market consumption. Due to the opacity of the product source, product pricing also varies greatly, and the phenomenon of mismatch between price and product quality occurs from time to time.
Medical materials, pharmaceuticals and equipment: are strictly regulated by the CFDA three categories of medical devices
In product manufacturing and circulation, uric acid, botulinum toxin and other products, the proportion of aquatic goods, counterfeit goods is very high, with the formal production of batch products only accounted for 20-30% of the total market consumption. Due to the opacity of the product source, product pricing also varies greatly, and the phenomenon of mismatch between price and product quality occurs from time to time.
China’s medical and aesthetic industry trends – scientific, standardized, large-scale.
Investment opportunities: investment norms of medical terminal institutions and upstream raw materials and products
The integration of medical beauty hospitals’ industry mergers and acquisitions: cut into the key link of the industry. At present, cosmetic plastic hospitals do not have an absolute leader, in the process of industry integration norms, the ability to make the beauty hospital leader bigger and stronger through mergers and acquisitions or other means is worth investing in the target.
Beauty hospital is the key link of the industry: from the perspective of profit distribution and business development in the medical beauty industry chain, cosmetic plastic hospital is the key link of the whole chain, and the industry itself has a larger integration space, the future is expected to form 3-5 large-scale brand chain beauty group, will be the preferred area to expand the layout.
Beauty hospital has strong capital attribute: although beauty hospital belongs to the specialized hospital, the demand for funds is lower than the general hospital (more emphasis on human resources), but still belongs to the area of heavy capital investment.
Upstream of the industry mainly includes drugs, equipment, large-scale equipment manufacturers. In beauty equipment, most prosthesis, injection fillers have the corresponding domestic manufacturers. Equipment supplies and pharmaceutical products, such as the focus on optoelectronics, ultrasonic knife and other equipment, prosthesis and puff import replacement.
From the overall dosage point of view, most of the standard terminal is still the use of imported products, with domestic manufacturers gradually strengthen branding and terminal promotion, the future is expected to further seize market share. Lasers, injectable skin-giving equipment, fillers, all have more investment opportunities.
The active mergers and acquisitions in the medical and U.S. industry fell back after the mergers and acquisitions boom in 2015, and the mergers and acquisitions boom re-emerged in 2017.
Between 2001 and 2017, there were 287 mergers and acquisitions in China’s medical and U.S. industry, with a total value of RMB69.68 billion, with an average acquisition amount of RMB243 million.
China’s private medical beauty services market competition pattern: the top five market participants accounted for 7.2% of the total market share
At present, the industry institutions are still highly dispersed, the quality of institutions is uneven, medical and American institutions integration and upgrading space is huge, mergers and acquisitions are an important means of rapid growth of the medical and american chain groups, the current industry’s top five medical and american service institutions are mostly through mergers and acquisitions to achieve rapid expansion, improve group revenue and net profit.
Borrowing and breaking the situation: medical beauty terminal “integration period” roared, capital has been involved in the medical and aesthetic industry
According to incomplete statistics, A-shares involved in the medical and aesthetic industry has 7 listed companies, including East China Pharmaceuticals, Shuangyi Pharmaceuticals, Coronation Bio, Xinhua Jin mainly involved in medical beauty upstream products or technology;
In April 2016, Lanzi acquired 30 shares of Korea Dream Group %股份，切入医美行业；2016年6月，朗姿以3.27亿元收购米兰柏羽和晶肤两个中国医美品牌，共6家机构；2018年1月，朗姿股份以2.67亿元收购西安高一生医疗美容医院100%
So far, Langzi in Chengdu, Xi’an, two western core cities initially formed a “1 plus N” medical and beauty institutions system (1 refers to a large plastic hospital, N refers to a number of small chain outpatient /clinic).
From July to November 2016, Suning Global has acquired Shanghai Immel Hong Kong Hua and other medical and aesthetic hospitals, has acquired Suning Global has acquired 12 medical and Aesthetic Hospitals, incorporated into Korea ID Health, strategic investment more beautiful APP; In August of 2018, Gao Tejia invested 200 million yuan in xiyi Plastics 1 and N chain model, in May 2018, Gaotejia invested 23.4 million yuan in Yixing Group, and in June 2018, Gottejia invested 100 million yuan in Huahan Plastics.
Medical upstream manufacturers frequently carry out mergers and acquisitions, "buy and buy" produced out of the industry giant map
The policy setting of “Healthy China 2030” has directly promoted the continuous expansion of the trillion-dollar market. And “some opinions to promote the development of health service industry” also pointed out the direction of the large health industry. Scientific life, health management, health consumption and a series of sub-tracks, constantly emerging innovators. Under the new air, how to seize the opportunity to bend overtaking? How do big health investments find good projects?
Source | Billion Euro health