On March 10th, Aimec (300896. SZ) announced the acquisition of 85% of the shares of South Korea's REGENBiotech for US$190 million (about 1.386 billion yuan), setting a record for the largest single acquisition in the history of domestic medical aesthetics. However, this transaction, which caused the stock price to soar by 14.92% the next day, in the eyes of industry insiders, is actually a risky move by medical aesthetic giants in the red sea of the market to compete for "technical time difference".

When Hi Body Skin Booster fell from 3,000 yuan to more than 200 yuan, low-priced hyaluronic acid became a "100-yuan drainage product", and the upstream of the medical beauty industry was mired in a price war. In order to escape the dilemma of price wars, companies have turned their attention to technology, trying to gain a competitive advantage through technological leadership. However, no one knows for sure how long the technical lead will last, which also makes this technical chase fraught with risks.

As a leading enterprise in the domestic medical aesthetic industry, Aimeike's revenue growth rate in the first three quarters of 2024 hit a new low again. REGEN's polylactic acid microsphere technology has become the key to breaking the game: its AestheFill, a youthful face injection, not only fills the gap of Aimeike's recycled materials, but also helps it "borrow a boat to go to sea" with the registration certificate of 34 countries. At that time, Bloomage Biotech (688363. SH) is betting on type III recombinant humanized collagen, Huadong Medicine (000963. SZ) to "girl needle" to attack the high-end, Jiangsu Wuzhong (600200.SH) to break through the complete human collagen structure, the industry, the head enterprises collectively turn to the "technology + product matrix" dual drive.

It is worth noting that, as the agent of REGEN China, Jiangsu Wuzhong made it clear that "the agency power will not be affected", but it has simultaneously made efforts on the compliance gap of salmon needles and self-developed collagen, transforming from a "channel porter" to a "technology player". This transformation also confirms the industry consensus that the life cycle of a single product is less than 5 years, and only by mastering the speed of technology iteration and the depth of combination can we escape the price grinder.

"Now it's a matter of whose technology can create new demand." Industry analysts pointed out that after all, in the era of "skin boosters are cheaper than facial masks", the upstream of medical cosmetology has bid farewell to the era of traffic, and hard-core technology is reconstructing pricing power.

1.3 billion is not a product, is it a "technical time difference"?

According to public information, REGENBiotech was established in Daejeon, South Korea in 2000, and the company focuses on the research and development, production and sales of medical materials, medical devices and pharmaceuticals and other related products, and gradually emerges in the highly competitive medical aesthetic market.

A South Korean medical aesthetic company established more than 20 years ago has set the largest medical aesthetic acquisition in the history of domestic A-shares, and the acquisition of 1.3 billion yuan is interpreted as a "technical time difference" accumulated by REGEN over the past 25 years.

The screenshot is from the Aimeike announcement

The purchase price of $190 million corresponds to a 47x price-to-earnings ratio (based on REGENBiotech's net profit for the first three quarters of 2024). In the general market environment, especially for the medical aesthetic industry, such a P/E multiple is at a high level. Typically, a high price-to-earnings ratio means that the acquirer is paying a large premium to the acquired company's current profitability and is taking on a higher investment risk.

The market believes that although REGENBiotech has advanced technology, judging from the financial data of 2024, its revenue growth in the first three quarters has slowed down, and its net profit is also under certain pressure. In this case, the acquisition at such a high price shows that the acquirer has extremely high expectations for the future performance growth of the target company, and also reflects that the transaction price is at a large premium to the current actual operating conditions of the target company.

In this regard, the relevant person in charge of Aimeike responded to the observer: "From the perspective of the global market, regenerative injection products are growing faster, and there are fewer competing products, and we believe that this category will maintain high double-digit growth." ”

It is reported that REGEN's core asset is its patent for "biodegradable polymer particle preparation technology". Its PDLLA microspheres have a sponge-like porous structure, which is 30% larger than traditional materials in volume and 40% more efficient in collagen regeneration than traditional materials at the same mass. This technological breakthrough made AestheFill the third approved polylactic acid filler in the world and the first in Korea (launched in 2007) and registered in 34 countries.

In 2023, REGEN's financial statements have won it the title of "money printing machine in the medical aesthetic industry", and in 2023, REGEN's operating income will be about 81.9854 million yuan, and the corresponding net profit will be about 50.1514 million yuan, with a net profit margin of up to 61%.

At present, the annual growth rate of global regenerative injection products exceeds 25%, and there are less than 5 players with similar technology. REGEN's 34-country registration qualification can save at least 3 years of overseas certification time for Aimeike - in the industry rules of "certification is a barrier" for medical aesthetic materials, it means that the admission ticket to emerging markets such as the European Union and Southeast Asia has been locked in advance.

As for the production capacity issue, Aimeike also revealed to the observer network that the target company will build a new second factory in Wonju City in 2024, and the new factory has now obtained South Korea (GMP) certification. With the commissioning of the new plant, the problem of insufficient production capacity will be effectively solved. It is expected that the operating income and net profit of the target company will maintain rapid growth in the next few years.

Jiangsu Wuzhong responded: The power of agency is not affected

It is worth mentioning that Jiangsu Wuzhong (600200.SH) previously had the exclusive sales agency right of AestheFill in Chinese mainland, and the agency agreement was valid until August 28, 2032, and the market has different opinions on the impact of the acquisition on Jiangsu Wuzhong.

In response to the possible impact of Aimeike's acquisition of a Korean medical aesthetic company on the agency business of Jiangsu Wuzhong, the relevant person in charge of Jiangsu Wuzhong responded in an interview with Observer.com: "After the evaluation of the professional team and external lawyers, the legal protection of the original national agency agreement is quite perfect. The agreement clearly states that there is no risk of cancellation or termination during the validity period, and there are basically no potential legal obstacles. ”

Regarding the long-term cooperative relationship with Aimeike, the above-mentioned person in charge said that Jiangsu Wuzhong has always adhered to an open attitude, but pays more attention to the long-term strategy of building a product matrix. Regarding the impact of Aimeike's domestic expansion plan, he analyzed: "The production capacity of the new factory in South Korea has been increased several times, which can effectively alleviate the current situation of short supply. ”

However, when Aimeike and Jiangsu Wuzhong emphasize production capacity at the same time, under the current market environment and supply and demand logic, there is still a question mark over how long the "technical time difference" of a single technology product can be maintained.

When "100 yuan hyaluronic acid" kills the traffic myth, the head enterprises have quietly changed gears

"Now it is cheaper to apply a water glow than a high-end mask, and institutions can only rely on new projects to make up profits." The sales staff of a medical cosmetology institution in Shanghai showed the price list to the observer network: the Hi Body Water Light Injection, which used to be priced at 3,800 yuan, is now only 252 yuan, and some medical cosmetology institutions have launched multiple card packages, which are only more than 200 yuan per time; Imported botulinum toxin falls below 1,000 yuan every festival, and many affordable hyaluronic acid has become a "100-yuan drainage product".

This scene reflects the cruel reality of the medical aesthetic industry - when the price war is rolled upstream, the former "certificate dividend" is being crushed by the speed of technological iteration.

Taking Aimeike as an example, in the first three quarters of 2024, it will achieve revenue of 2.376 billion yuan, a year-on-year increase of 9.46%; net profit was 1.586 billion yuan, a year-on-year increase of 11.79%. Among them, the single-quarter revenue in the third quarter was 719 million yuan, a year-on-year increase of only 1.1%; The net profit was 465 million yuan, a year-on-year increase of 2.13%, and behind the paradox of volume increase and price decline was the rapid loss of channel discourse.

Aimeike's operating income and revenue growth data come from Aimeike's financial report

In this "technological arms race", leading companies have quietly shifted gears and bet on more leading technologies and diversified solutions. "Through this transaction, Aimeike has strengthened its layout in the field of recycled products, and with many of Aimeike's products, it can provide more diversified and better solutions for beauty seekers, and meet the needs of beauty seekers for treatment of more parts of the face, body, etc." Aimeike told the observer.com.

In addition to Aimeike's acquisition of South Korea's REGEN, Bloomage Biotech bet on type III recombinant humanized collagen in an attempt to replicate the myth of the hyaluronic acid empire; With the "Girl Needle" Ellansé®, Huadong Medicine faced off head-to-head with Haohai Biotech's "Sea Charm" in the recycled material track; Sihuan Pharmaceutical's "Letibao" botulinum toxin expanded against the trend by taking advantage of consumption downgrade, and its market share climbed to 18%; Jiangsu Wuzhong chose to "break through the hard core", and its recombinant human collagen implant broke through the bottleneck of fragmentation technology and developed type I human collagen with a complete structure.

Since the approval of Aisufei in the domestic market in 2024, Jiangsu Wuzhong has previously achieved significant performance growth through the agency of Tongyan Needle. Jiangsu Wuzhong is also doing a diversified layout, which introduced to the observer.com, "The salmon needle Lizhulan in the Korean market is very hot, and there is a huge gap in China due to the lack of compliance documents, and we are expected to seize the opportunity", and plans to promote the sea with the exclusive right to the world. ”

In the first three quarters of 2024, the revenue of Jiangsu Wuzhong's medical aesthetic segment reached 199 million yuan, an increase of 4175.12% over the same period of the previous year, and the gross profit was 163 million yuan, a year-on-year increase of 6465.52%, contributing nearly 100 million yuan of gross profit to the company in the third quarter alone. It is reported that in 2025, Aisufei will usher in a complete sales year (only 7 months last year), and the market demand will increase month-on-month, and the growth rate is expected to be significant.

Regarding the synergy between the approval of Aisufei in 34 countries and the company's overseas plan, Jiangsu Wuzhong said that Aisufei is not in the overseas plan as an agent product, and the company's real international layout relies on its own products, including the upcoming PDRN product (salmon needle) and recombinant human collagen implants.

In addition, most of the recombinant collagen on the market is fragmented, and Jiangsu Wuzhong's products have a "complete human collagen structure", and its support is comparable to that of animal collagen. At present, the clinical samples of the product have started human trials, and it is planned to officially start clinical trials within the year.

Some practitioners in the medical cosmetology industry believe that the life cycle of any single product is no more than 5 years, and companies that can survive must master both "technology iteration speed" and "product portfolio depth". When the "100 yuan hyaluronic acid" shreds the traffic myth, the survival rule of the medical beauty industry has shifted from low price to technology, in this competition, we must roll up the technology and the product at the same time, and constantly tear the moat of materials, processes and indications with each other, so as to avoid becoming the next victim in the price grinder.