Song Qinghui, a well-known economist, said in an interview with Overseas Network, "This move has not saved the company's stock price, or it means that market investors have insufficient confidence in the company." In the short term, share buybacks can indeed boost the stock prices of listed companies to a certain extent. However, if it does not have a sustained effect, it means that investors have certain doubts about the future development of listed companies, which leads to increased market uncertainty. ”
Hi Finance丨Yonghe hair transplant, "hair loss" in the stock market?
After two years on the market, the market value fell by more than ninety percent - the first share of hair transplantation became more and more defeated, and it was weak to turn over.
Recently, Yonghe Medical (02279. HK) announced its 2023 financial results. According to the financial report, Yonghe Medical's annual revenue was 1.777 billion yuan (RMB, the same below), a year-on-year increase of 25.8% over 2022. However, unlike the revenue growth, Yonghe Medical's net loss widened by about 635%, from 86 million yuan in 2022 to 546 million yuan in 2023.
It is worth noting that the capital market may have lost confidence in Yonghe Medical. In December 2021, when Yonghe Medical went public in Hong Kong, the issue price was HK$15.80 per share, and the total market value reached HK$8.63 billion at the close of the day. However, as of April 8, Yonghe Medical's share price was HK$1.17 per share, with a market value of only HK$617 million, which has fallen more than ninety percent from its high.
Regarding the changes in the share price and market value of Yonghe Medical, Guosheng Securities Mai Zeyuan said in an interview with overseas networks, "Yonghe Medical was listed at a time when the domestic medical aesthetic industry was in the wind and hot spots, so Yonghe Medical at that time was relatively high in terms of valuation level and amount raised. At present, the market value has fallen by more than 90%, and the high issue price of the year is the original sin. At the same time, although Yonghe Medical's revenue will increase in 2023 compared with the same period in 2022, its losses continue to expand, and the uncontrollable costs and expenses are important reasons why it is abandoned by shareholders. ”
In March this year, the Shenzhen Stock Exchange issued the "Announcement on the Adjustment of the List of Underlying Securities of the Hong Kong Stock Connect under the Shenzhen-Hong Kong Stock Connect", which transferred Yonghe Medical out of the list of the underlying securities of the Hong Kong Stock Connect under the Shenzhen-Hong Kong Stock Connect, which is equivalent to the closure of the company's stock price in the southbound capital trading channel, and the Hang Seng Index removed it from the comprehensive constituent stocks on February 16, resulting in the outflow of passive allocation funds, which are all factors that have an impact on the stock price. Mai Zeyuan added.
The tuyere has passed, and Yonghe Medical has also made efforts to continuously "lose" the market value, but it seems to be a little futile. On October 26, 2023, Yonghe Medical announced that it intends to repurchase up to 52.708 million shares under the share repurchase authorization, accounting for 10% of the total number of shares on the Stock Exchange of Hong Kong Limited on the day of the 2023 annual general meeting. Since the beginning of 2024, Yonghe Medical has been making intensive repurchases, but because of its small scale, it has not played a big role.
Famous economist Song Qinghui
Bedside economics ¥59.8 to buy
In this regard, Song Qinghui, a well-known economist, said in an interview with overseas networks, "This move has not saved the company's stock price, or it means that market investors have insufficient confidence in the company." In the short term, share buybacks can indeed boost the stock prices of listed companies to a certain extent. However, if it does not have a sustained effect, it means that investors have certain doubts about the future development of listed companies, which leads to increased market uncertainty. ”
In this way, if Yonghe Medical wants to get rid of the predicament, it must start from boosting its own business. It is reported that Yonghe Medical is a medical group specializing in hair medical services, covering hair transplantation, medical maintenance, routine maintenance and other supporting services. Yonghe Medical owns the hair transplant brand "Yonghe Medical", the medical care brand "Swenxun", the female aesthetic hair transplant brand "Yonghe Fa Chuchu" and the medical wig brand "Ha Fa Fa". According to the business, Yonghe Medical's revenue mainly comes from hair transplant business, medical care business and others. Among them, the hair transplant business is the revenue pillar of Yonghe Medical, accounting for more than 70% of the total revenue in 2023.
In order to gain a larger market share, Yonghe Medical has adopted the strategy of "exchanging price for volume". In February 2023, Yonghe Medical launched a "fixed price" price system, that is, the hair transplant business will be divided into 2,500 hair follicles and formulate a unified charging standard. If the number of implanted follicle units is less than 1,000, the surgery can be performed only with the doctor's opening fee.
Admittedly, the change in the price system did bring about an increase in the scale of users. According to the financial report, in 2023, the number of people who underwent hair transplant surgery will be 61,071, an increase of 55.6% over the same period of the previous year, and the revenue of hair transplant business will increase by 31.4% from the previous year to 1.354 billion yuan. However, the unit price of the hair transplant business declined, down 15% from last year to 22,174 yuan.
In addition, the revenue of the medical care business increased by 7.1% year-on-year to MOP388 million, while the number of people receiving medical care services increased by 24.4% year-on-year to 78,687, but there was still a gap between the number of people who 105275 at the peak in 2021. The unit price of medical care services decreased from RMB5,731 in 2022 to RMB4,934 in 2023.
Not only that, in 2023, Yonghe Medical's gross profit margin will drop from 61.8% in 2022 to 56.1% in 2023, which is also the lowest level of Yonghe Medical in recent years. Combined with the prospectus and past financial report data, from 2018 to 2021, Yonghe Medical's gross profit margin exceeded 70%, which were 75.2%, 72.6%, 74.6% and 72.9% respectively.
Obviously, the consumer market did not really buy it because of Yonghe Medical's price cut. On the consumer side, as of April 3, Yonghe Medical had a total of 74 complaints on the Black Cat complaint platform, including "not in accordance with the contract, the survival rate is extremely poor", "hair transplant failure, unreasonable treatment plan" and so on. The reason for this is that some clues can be found from Yonghe Medical's financial report - the high marketing expenses are in stark contrast to the not too high R&D expenses.
In 2023, Yonghe Medical's R&D expenditure will be 29.279 million yuan, and in the past few years, Yonghe Medical's R&D expenditure has never exceeded 20 million yuan. According to the prospectus and financial report data, from 2018 to 2022, Yonghe Medical's R&D expenditure was 7.807 million yuan, 8.869 million yuan, 11.815 million yuan, 14.163 million yuan and 18.495 million yuan respectively. In 2023, Yonghe Medical's sales and marketing expenses will increase to 1.044 billion yuan, compared with 767 million yuan in 2022. From 2018 to 2021, the expenses of Yonghe Medical were 464 million yuan, 650 million yuan, 780 million yuan, and 1.073 billion yuan respectively.
The expenses based on sales and marketing expenses have indeed eroded Yonghe Medical's profit margins. Regarding the performance, Yonghe Medical once said in the performance forecast that in order to adapt to the changes in the industry, Yonghe Medical optimized the organizational structure and increased labor costs accordingly. In addition, in order to improve channel efficiency, Yonghe Medical's sales expenses increased by approximately 36.0% to 37.0% compared with 2022. At the same time, Yonghe Medical said that in order to adjust the market layout, 21 Yonghe hair transplant institutions and 7 Swenson health centers were newly opened, and the corresponding expenditure costs have increased. In addition, Yonghe Medical also shrank stores in some local cities, recording a one-time loss of about 53.6 million yuan.
At present, it seems that facing the capital market, the problem of Yonghe Medical's increase in revenue and not profit still needs to be solved, and the way of marketing to burn money and exchange price for volume is not a long-term solution. It may not be easy for Yonghe Medical to tell the story of "the first hair transplant". Original title: Hi Finance丨Yonghe hair transplant, stock market "hair loss"?
Editors: Wang Ran, Dong Yue