Aimec is the head company of domestic hyaluronic acid industry. In terms of gross profit rate, AMEC is not only higher than Huaxi biological, but also close to Guizhou Maotai (600519. SH). However, under the premise of gradual upgrading of supervision, the industry competition tends to be fierce. Aimec is facing challenges due to its single product structure.
Gross profit rate comparable to Maotai
According to the prospectus, AMECs IPO is expected to raise 1.935 billion yuan. In terms of investment projects, AMEC will invest in the second phase construction project of implantable medical device production line, the innovation and transformation research and development center of medical materials and medical devices and new product research and development project, the construction project of gene recombinant protein R & D and production base, and the R & D project of botulinum toxin type A for injection There are 8 construction and R & D projects in total, and another 600 million yuan is expected to be used to supplement working capital.
While enjoying the tax preference, AMEC still maintains the stability of the terminal product sales price. At the same time, the increase of output further dilutes the unit cost of the product, thus further increasing the gross profit rate.
Single product and sales structure
In the prospectus, AMEC pointed out that the company has a single product structure. As of December 2019, the companys largest two products, the injection of modified hyaluronic gel (Ai Fu Lai) and injection of sodium hyaluronate compound solution (HI body) revenue amounted to 210 million yuan and 240 million yuan, accounting for 39% of the total revenue and 43%, accounting for more than 80% of the total.
Among them, modified gelatin for injection (Ai Fu Lai) has always been a mainstay product for Ai Mei customers. In 2016, the product revenue amounted to 102 million yuan, accounting for 72.27%. Since 2017, the revenue share of the product has gradually dropped to less than 40%.
At present, almost all products of the company are sodium hyaluronate products. The company believes that at present, the hyaluronic acid market is getting better, and the average gross profit rate of the leading products is relatively high. Many enterprises are attracted to enter the domestic market through independent research and development or merger and acquisition. The industry competition will gradually intensify, and the gross profit rate level is at the risk of decline. At the same time, if the company can not properly cope with the competition of new market entrants, the companys operating performance may not be able to maintain the growth trend.
The sign of intensified competition has been reflected in haohaishengke, a competitor of aimike. The interest rate of Haoke is 77.23% in the same period, which is 77.1% lower than that in the same period of 2019. According to the Research Report of some securities companies, the decline of gross profit rate is mainly caused by the change of terminal market policy (the control of high-value consumables), the industry has entered the period of rectification and adjustment, and the competition pressure of the older generation of hyaluronic acid. It remains to be seen whether AMEC can be independent.
In terms of customers, the companys customers are mainly non-public medical institutions. By the end of 2019, AMECs income in public medical institutions was only 1.767 million yuan, while that in non-public medical institutions was 355 million yuan, accounting for 99.46%.
There is a big difference between medical beauty products and conventional drugs or medical devices. The sales of the latter are mainly affected by the superposition of national medical insurance policy, hospital decision-making process and the judgment of the doctor in charge. Medical beauty products are mainly affected by product compliance, safety, repair effect, brand, price and business cooperation with manufacturers.
In addition, the decision-making power of medical beauty institutions is larger than that of doctors. Therefore, medical beauty products are less directly sold to doctors, but mainly used to develop marketing programs with medical institutions. As the medical and aesthetic products are more sensitive to the needs of end consumers, it also puts forward higher requirements for the market-oriented competition of products.
In the sales end, aimex adopts the mode of direct selling as the main and distribution as the auxiliary. The company believes that such a model can be more involved in the product promotion and terminal sales of medical beauty agencies, so as to improve the satisfaction of customers and end consumers. At present, the companys revenue direct sales mode accounts for about 64%.
It is worth noting that haohaishengke and Huaxi biology also adopt the mode of combining direct selling and distribution. Among them, 70% of the direct sales from Xihua biology accounted for about 30% of the total. The former has a similar structure of end customers in the direct sales mode, that is, most of them are private hospitals / clinics / outpatient departments, while a small number of them are public hospitals. The latter is mainly sold to dealers through buyout.
Wild growth is a hidden worry
In recent years, the domestic medical beauty market has experienced a rapid growth stage. According to frost Sullivans analysis, from 2014 to 2018, the total scale of the domestic medical and American market increased from 3.62 billion yuan to 6.88 billion yuan, with a compound growth rate of 17.4%. Compared with the United States, Brazil, South Korea and other countries, the penetration rate of domestic beauty market is still low, which is expected to maintain a rapid growth trend.
Data sources: AMECs prospectus (declaration draft), frost Sullivan analysis
The other side of the coin is the barbaric development of the medical and aesthetic industry over the years. The cases of violation of laws and regulations in medical and American institutions are also emerging in an endless stream, among which the frequency of unqualified professional qualification is the highest. On November 11, 2019, the National Health Commission announced 10 typical cases of illegal medical cosmetology in 2019, including 3 cases practicing without license, 1 case lending license, and 1 case still engaging in diagnosis and treatment activities without license verification. Therefore, medical cosmetology is also included in the national supervision and random inspection in 2019 and the special rectification of medical disorder jointly carried out by 8 departments. Because most of the downstream customers of medical consumables suppliers such as aimike are non-public medical institutions, the phenomenon of non-compliance is more prominent. Under the background of stricter industry regulation, investors should pay attention to the impact of policy changes on company fundamentals. Source: interface news editor: Yang Bin_ NF4368
Therefore, medical cosmetology is also included in the national supervision and random inspection in 2019 and the special rectification of medical disorder jointly carried out by 8 departments. Because most of the downstream customers of medical consumables suppliers such as aimike are non-public medical institutions, the phenomenon of non-compliance is more prominent.
Under the background of stricter industry regulation, investors should pay attention to the impact of policy changes on company fundamentals.