Based on the research on the dynamic competition pattern of the medical and American market in the United States, South Korea and the United States, we believe that the change of botulinum toxin and hyaluronic acid pattern in the upper reaches of the medical and American market is more referential than that in the United States; However, it is expected that the degree of botulinum toxin involution in China is weaker than that in South Korea, and the path of hyaluronic acid lies in the synergy of domestic consumption + and botulinum toxin; The low concentration in the middle reaches has not been greatly improved with the maturity of the market; The leading path of global medical beauty lies in M & A + R & D to create large single products, and strong b-end + C-end systematic operation ability.
Key investment points:
Industrial chain: entry barriers and replicability jointly affect the interest distribution and competition pattern of different links of the industrial chain. The United States and South Korea are dominated by upstream centralized / midstream decentralized / downstream Internet platforms, and the commonness is greater than individuality. 1) Upstream: the U.S., South Korea and the U.S. medical industry chains are characterized by superior upstream competition pattern and profit margin. The slight difference is that the competition pattern of the United States is more concentrated than that of South Korea; FDA is more strict than MFDs. In addition, South Korea supports the vigorous development of the medical and American market. Although the scale of the upstream market in South Korea is small, the number of manufacturers is much larger than that in the United States. Whether it is botulinum toxin or hyaluronic acid, the stability and concentration of its competition pattern are lower than that in the United States. 2) Midstream: the medical system in the United States and South Korea is dominated by private enterprises. There are a large number of compliant medical and beauty institutions, with obvious characteristics of doctors’ self-management, and CR1 is less than 1%; In terms of business format, American institutions coexist in chains / single institutions, and the chain rate is about 13%, while Korean policies restrict chain and the expansion of single institutions is mainly driven by scale. 3) Downstream: search engine advertising in the United States is strictly regulated, and South Korea focuses on word-of-mouth communication through social media channels.
Botulinum toxin: from the perspective of supply side, South Korea is more referential to China, but the degree of involution in China may be weaker than that in South Korea. The US medical and American market started early, and the number of botulinum toxin products is only 3 before 2019. It is difficult to say that the level of supply side products is rich. The South Korean market experience fully reflects that the supply will catalyze the demand. In the early stage, the market volume is small under the guidance of foreign brands. After the approval of local brands powder poison and white poison, they use cost-effective products to catalyze the market demand, improve the penetration of botulinum toxin and drive the development and growth of botulinum toxin market. Local brands also enjoy the growth dividend of the industry during the mismatch period of supply and demand. In the past, the development of botulinum toxin market in China was weaker than that of hyaluronic acid, and there were demand side factors, but the quantity and product level of supply side products were also constraints. The increase in the number and rich level of approved products are expected to catalyze the demand for botulinum toxin from the supply side. Based on this, we believe that South Korea’s reference to China is higher than that of the United States. Compared with South Korea, China faces a larger market volume and higher access barriers. It is expected that the degree of market involution in China will be weaker than that in South Korea.
Prospects for China’s botulinum toxin market pattern: 1) under the support of Yimei (market expansion + compliance substitution + age structure upgrading) and medical demand, the medium and high-speed growth of botulinum toxin market scale is clear, the gap of superimposed price band has not been fully filled, and the competition situation will be relatively relaxed in the next 3-5 years; 2) The number of homogeneous competitors increases in the medium term (from the approval progress, it is expected that there will be about 9 market competitors in succession from 2025 to 2030), the growth center of the superimposed botulinum toxin market will move downward, the incremental competition will gradually transition to the stock game, and the downward price is a high probability event; 3) The barriers to competition among botulinum toxin brands lie in the license leading cycle (providing a time window for accumulating word-of-mouth / seizing share. The longer the leading cycle, the more stable the barrier) and product cost performance (in the case of no first mover advantage or unstable first mover advantage, products with higher cost performance are also expected to stand out).
Hyaluronic acid: South Korea is more referential, and domestic consumption + is synergistic or trend with botulinum toxin. Consistent with the logic of botulinum toxin, we believe that from the perspective of supply side, South Korea is also more referential to China. 1) For domestic hyaluronic acid brands, differentiation and sinking market volume may be a breakthrough path. Korean local brands also focus on high quality, low price and volume logic in the face of foreign brands such as Ruilan and Qiao Yadeng. 2) Manufacturers with botulinum toxin and hyaluronic acid have greater competitive advantage. As the world’s largest single product, botulinum toxin has a wide range of application (medicine + medical beauty) and strong versatile attribute. There is no need to repeat its importance, and its entry barrier is higher than hyaluronic acid, which also leads Chinese manufacturers to choose agents rather than self-developed to layout the botulinum toxin market. “Hyaluronic acid injection without botulinum toxin will not be sold in the next five years”, which is exaggerated, but both theoretical discussion and mature market experience show that the importance of botulinum toxin can not be ignored.
Leading path: M & A + R & D to create large single products, with strong systematic operation ability at end B + end C. 1) Looking back on the development history of aierjian, its medical and American business layout is mostly cut through mergers and acquisitions. Acquisitions can spend money to buy time, but they are far from once and for all. Focusing on R & D investment and high R & D efficiency can prolong the product life cycle. 2) The channel is not only for distribution, but also for systematic operation, enabling doctors and institutions to strengthen the added value to the b-end. Yimei has both tob and TOC attributes, which is fully recognized by both upstream enterprises and investors. However, when to start implementation (first mover advantage) and whether the implementation is in place are another factor to open the gap between enterprises in addition to product power. 3) Eljian’s C-end marketing is not limited to advertising, covering a package of activities such as market education / cost saving / payment assistance / consumer loyalty plan; At the same time, aierjian’s understanding of beauty is not only external, but also pays more attention to women’s internal strength and endows the brand with cultural connotation. 4) Eljian’s performance in the first ten years of acquisition in 2015 was about 15% CAGR, with a market value of more than 450 billion yuan / PE valuation center 30x.
Investment suggestion: focus on comprehensive medical and beauty leaders with first mover advantage. At present, the medical beauty industry is in a high business cycle driven by penetration improvement. It continues to be optimistic about the growth potential of the medical beauty industry and gives a “recommended” rating. It is suggested to pay attention to the comprehensive medical beauty leaders Imeik Technology Development Co.Ltd(300896) , Bloomage Biotechnology Corporation Limited(688363) , Sihuan medicine, Shanghai Haohai Biological Technology Co.Ltd(688366) , Huadong Medicine Co.Ltd(000963) with first mover advantage and perfect product layout.
Risk warning: regulatory policy changes beyond expectations; The epidemic situation further worsened and impacted the terminal consumption; Medical risk accident; International experience is not completely reproducible, and relevant data and materials are only for reference; Medical resources, medical technology, consumption habits and other uncertainties; Focus on the risk that the company’s performance is lower than expected; The valuations of companies outside China are not comparable, and the relevant data are for reference only.
