The "beauty medical茅" Meipai (300896.SZ) has seen its myth of rapid growth shattered. On March 19, Meipai released its annual report for 2024. The company achieved operating revenue of 3.026 billion yuan, a year-on-year increase of 5.45%; and realized net profit attributable to the shareholders of the listed company (hereinafter referred to as "net profit attributable") of 1.958 billion yuan, a year-on-year increase of 5.33%.

In the fourth quarter, the company's revenue and net profit both declined, marking the first time since its A-share listing in 2020 that the company has experienced a decline in both metrics in a single quarter.

Aimer has been known for its rapid growth, with annual revenue and net profit attributable to shareholders growing at over 20% from 2016 to 2023, and a comprehensive gross profit margin exceeding 90%. Such growth rates and high gross margins are rare in the A-share market.

In 2024, the high-growth myth of Meipaike came to an end. Analysis suggests that the intensification of market competition, weak consumer demand, stricter regulatory oversight, and rising compliance costs, among other factors, led to a lack of momentum in Meipaike's performance growth.

Ameeke is actively seeking to break through and is embarking on an internationalization strategy. Recently, the company announced that it will acquire a Korean company for 1.386 billion yuan, with a premium of up to 13.44 times, to bolster its industrial layout. The high premium acquisition suggests that Ameeke's path towards internationalization still faces challenges.

Fourth quarter revenue and net profit both decline for the first time.

Rare! AIMKE's operating revenue and net profit have started to decline.

According to the annual report, in 2024, Meimei Beauty Achiever (Ai Mei Ke) achieved operating revenue of 3.026 billion yuan, a year-on-year increase of 5.45%; it achieved net profit attributable to shareholders of 1.958 billion yuan, a year-on-year increase of 5.33%; non-recurring gains and losses, i.e., "net profit after deduction of extraordinary items" was 1.872 billion yuan, a year-on-year increase of 2.20%. Among these, solution-based and gel-based products contributed 57.64% and 40.18% of total revenue respectively. Revenue from solution-based products was 1.744 billion yuan (an increase of 4.40%), while revenue from gel-based products was 1.216 billion yuan (an increase of 5.01%). The core product lines maintained stable growth.

The company's research pipeline covers the fields of biomaterials, chemical drugs, and medical devices, including Type A botulinum toxin, second-generation facial implant threads, and semaglutide injection. In 2024, the medical cross-linked sodium hyaluronate gel containing polyvinyl alcohol gel microspheres received approval for a Class III medical device registration certificate; recombinant hyaluronidase and deoxycholic acid injection have entered the clinical trial stage. In addition, the market application for injectable Type A botulinum toxin and minoxidil topical solution has entered the review stage.

In addition, Aimeike acquired an 85% stake in South Korea's REGENBiotech for $190 million, gaining its polylactic acid-based filler products AestheFill and PowerFill. AestheFill has been approved for sale in China in 2024, becoming the company's second major product after Hi-Body. The target company has two factories in South Korea, with the new factory in Wonju expected to begin production in 2025, further enhancing its supply capacity.

However, the year-on-year growth rates of revenue, net profit, and adjusted net profit are all single digits, which is extremely rare for Aimeike.

Data from Wind shows that from 2016 to 2023, the company's revenue and net profit continued to grow rapidly, with both increasing from 1.41 billion yuan and 530 million yuan in 2016 to 28.69 billion yuan and 18.58 billion yuan in 2023, cumulatively growing by 19.35 times and 34.06 times, respectively. The average compound annual growth rates for the two were 53.79% and 66.22%, respectively.

From 2020 to 2023, the company's operating revenues were 709 million yuan, 1.448 billion yuan, 1.939 billion yuan, and 2.869 billion yuan, with year-on-year growth of 27.18%, 104.13%, 33.91%, and 47.99% respectively; the net profit attributable to shareholders was 440 million yuan, 958 million yuan, 1.264 billion yuan, and 1.858 billion yuan, with year-on-year growth of 43.93%, 117.81%, 31.90%, and 47.08% respectively.

In recent years, although the company has been affected by factors such as the pandemic, its revenue and net profit have continued to grow rapidly. In 2023, despite a high base, the company's revenue and net profit growth rates still reached around 47% year-on-year.

The company has experienced continuous high-speed growth, with a comprehensive gross margin exceeding 90% from 2019 to 2023. In 2023, the comprehensive gross margin reached as high as 95.09%, surpassing that of Kweichow Moutai. As a result, Aimeike is referred to by the market as the "Moutai of medical aesthetics" and "Moutai for women."

In 2024, Amgen experienced an unexpected major downturn.

In the first to fourth quarters of 2024, Meihesp achieved operating revenues of RMB 808 million, RMB 849 million, RMB 719 million, and RMB 650 million, respectively, with year-on-year growth rates of 28.24%, 2.35%, 1.10%, and -7%; the net profit attributable to parent company shareholders was RMB 527 million, RMB 593 million, RMB 465 million, and RMB 372 million, respectively, with year-on-year growth rates of 27.38%, 8.03%, 2.13%, and -15.47%.

In the fourth quarter, both revenue and net profit declined. This marks the first time since Aimeike's listing in 2020 that both revenue and net profit have declined in a single quarter.

So, why did Aimeike's business performance suddenly decline?

In the annual report, AMEC did not provide specific explanations. At the earnings conference, an investor asked the executives present at the earnings conference, "What are the main reasons for the significant slowdown in performance and net profit growth? Are there any measures that can be taken to reverse and improve this situation?" However, no direct response was received.

Analysts have pointed out to the Yangtze River Business Daily that stricter regulations and rising compliance costs have led the industry from rapid growth to a phase of rational adjustment. Coupled with weak consumer recovery, this has put pressure on the demand side and intensified competition. These factors together have resulted in even industry leaders being unable to withstand market adjustment risks.

1.386 billion acquisition initiates internationalization

How will Meikepper deal with its rare performance deceleration?

According to the information disclosed in the annual report, there are two figures from AMEC that the market should pay attention to in 2024.

In 2024, the company's solution injection products, mainly "Hai Ti", generated revenue of 1.744 billion yuan, with a year-on-year growth of only 4.4%, a significant decline from the 29.22% growth in 2023. The revenue from gel-type products represented by "Ru Bai Tian Shi" was 1.216 billion yuan, with a year-on-year growth of 5.01%, a substantial drop from the 81.43% growth in the same period last year.

This data indicates that in 2024, Aimeike's flagship products have already shown signs of sluggish sales.

In 2024, the company's operating cash flow was 1.927 billion yuan, a slight decrease of 1.38% year-on-year, marking the company's first decline. In response, the company explained that the increase in taxes, a slight rise in inventory at the end of the period, and a higher proportion of cash in labor costs contributed to this decline.

It is worth mentioning that in 2024, Jiangsu Wuzhong, a listed company in A-shares, achieved a turnaround from loss to profit.

According to the performance forecast, Jiangsu Wuzhong expects a net profit attributable to shareholders of between 55 million yuan and 80 million yuan, compared to a loss of 71.9452 million yuan in the same period last year. The main reason is that starting from April 2024, the company's medical beauty biotechnology segment, AestheFill, a polylactic acid facial filler, will generate sales and profits.

This is AestheFill's first entry into the Chinese market. In 2024, Jiangsu Wuzhong obtained the exclusive agency rights for AestheFill within China, valid until August 28, 2032.

Market analysis suggests that the entry of AestheFill艾塑菲 into the Chinese market has intensified competition.

Under pressure in operations but with ample cash flow, Aimeike chose to pursue external mergers and acquisitions, and the target of the acquisition is REGEN Biotech, Inc. (referred to as the "target company" or "Korean REGEN Biotech, Inc."), the company behind AestheFill.

On the evening of March 10, Aimeike announced that its wholly-owned subsidiary Aimeike Hong Kong, together with Shou Rui Hong Kong, has established Aimeike International, which intends to acquire an 85% stake in REGEN Biotech, Inc. from South Korea. The transaction amount is approximately $190 million (about 1.386 billion yuan). The remaining equity will be flexibly acquired 18 months after the first closing. This means that Aimeike may fully control the target company.

According to the assessment report, the transaction price of 1.386 billion yuan has an appreciation rate of up to 13.44 times.

The announcement states that the target company is a leading South Korean medical aesthetics products company, established in Daejeon, South Korea in April 2000. It is the first such company in South Korea and the third globally to obtain a registration certificate for polylactic acid-based dermal filler products. The approved products of the target company mainly include AestheFill and PowerFill. Among them, AestheFill is primarily used on the face, while PowerFill is mainly used on the body. AestheFill has received registration approvals in 34 countries and regions, while PowerFill has obtained registrations in 24 countries and regions.

In 2023 and the first nine months of 2024, the company's revenue was 81.9854 million yuan and 72.2311 million yuan, respectively, with net profits of 50.1514 million yuan and 29.5003 million yuan, respectively.

Amicci Labs stated that this transaction is a key move in the company's internationalization strategy, which will help further solidify its leading position in the medical beauty injectable filler product market, injecting momentum into the company's continuous growth in future performance.

Is the premium acquisition of 13.44 times the price achievable for Meicai?