There is always news from different channels: "A number of dental hospitals under a dental medical group are suspected to be publicly auctioned", what happened to the "BMW track" that was once sought after by capital? As a dialysis practitioner who has studied in the dental industry for two years, it is estimated that the whole country will not be able to make up a few, how do you view the difference between the dental industry and the dialysis industry? What can you learn from the dental industry?
Source: Qiang said to run a doctor
Author: Yu An
Editor: Lingxing
Cover source: pixabay
Look at the head: it seems that the oral life is not good
01|The former "tooth grass" fell into a "second pot head"
There are not many companies and products that can be linked to "Mao", Tongce Medical is the No. 1, known as "Yamao", and even released a message to become "real Mao". From the highest 420 pieces to the current more than 42 pieces, the cut is 90%.
Take a look at the 23 year financial report:
2.8 billion in revenue (slightly more than 4%), and nearly 500 million in profit (8% less than in '22). The performance looks good, why did it fall like this?
02|"20-year-old daughter red" became "RIO"
Arrail is a "hero" and "veteran" in the traditional dental industry, and has a history of nearly 20 years before going public. If you don't have good luck, don't take a bite of "old and old-fashioned" and go to the market, but it clicks all the way, from broken hair to sparse!
The highest 16 yuan, currently 3.9 yuan, from the rank of the immortal class to the "fairy stock", take a look at the 2023 financial report:
The revenue was 1.746 billion, the net profit was 13.42 million, and the gross profit margin was 22.5%, speechless! An annual report on "positive profits" of the company, what more bicycles!
03|What's going on in the dental industry?
From the capital darling 3 years ago to the stock market outcast 3 years later, what happened to the dental industry?
(1) What is the trouble caused by oral collection?
The price of the whole set of planting has reached the level of 3,000 yuan, and the price has been cut in half by two-thirds. Is that all?
Arrail planting accounted for 20.5%, and Tongce planting accounted for 17.4%, and the data showed that planting and centralized procurement did not have such a big impact on the two companies.
(2) What is the impact of the general situation?
This strong brother can't say that in principle, all the "bad" in recent years can be counted on the unlucky child of the "big situation". The universally applicable reason is an "excuse", which is not convincing;
(3) Only "seeking for oneself" remains
Reverse the three levels:
The first level: stomatology, epidemiological characteristics, treatment pathways, medical personnel, resources;
The second level: the dental industry, is it consumer or medical? Can the boasted be cashed in?
The third level: the enterprise itself, first look at the cognitive ability, practical ability, learning ability, and management ability of the top decision-maker (chairman, actual controller).
Let's not talk about opinions or "conclusions" first, let's move on.
Outmoded? Disassemble the data of the oral cavity
01|Gross profit margin: real "huge profits" or real "small profits"?
This is the gross profit margin and net profit margin reported by Tongce: 39% and 20.32%, which forms a "strange combination", that is, "low gross profit + high net profit", 39% is very general to be honest, and 20.32% is very "eye-catching", how to do it? This technical "know-how" is the key to cracking.
Riel is more "slippery", and he has to help him calculate:
OMG, at this level of gross profit (net profit not to mention), wash and sleep!
02|Cost Structure
In view of Arrail's "excellent performance", the following is only a general analysis:
"It's not scientific"! Where does the high net profit come from?
(1) From the perspective of cost composition
"Material-dependent": 23.58%, which is at a high level in "medical services";
"Manpower dependence": 55.75%, "the stomatology department that drives BMW" is true, dentists make money!
(2) From the perspective of the "three major fees".
Sales expenses are "comparable to public hospitals": sales expenses have been maintained at about 2% for a long time, which is basically the level of public hospitals. This is contrary to "common sense and normalcy in the industry";
Management expenses "lost in the line": from 18.49% to 10.85%, how to look like "sales expenses" is normal.
At this point, the "low gross profit-high net profit case" can be regarded as "broken":
Tongce Medical, low gross profit - the reason for high net profit is "ultra-low sales expenses";
Brother Qiang's point of view:
First, "ultra-low sales expenses" do not conform to common sense, or "really awesome", or core competitiveness. Either it's "problematic";
Second, assuming that the "ultra-low sales expenses" are true, then the business model and revenue source of Tongce Medical will become "shackles", and the company is likely to "not do much" (such as more than 10 billion) and "not go far" (such as the national layout);
The preliminary "conclusions" are thrown out first, and the reasons are analyzed later.
03|Doctor
Dentistry is a "profession that doctors rely heavily on".
(1) Arrail's "pride"
Because of "strong dependence on doctors", Arrail focuses on the focus and writes a big book.
Let's look at Brother Qiang's interpretation first:
(2) The "secret" of Tongce
The revenue of the two Hangzhou dental hospitals is nearly 1 billion, accounting for nearly 35.7% of the entire Tongce revenue;
The reason for "low gross profit + high net profit" of Tongce is further clarified: one of the main reasons for the concentrated scale effect of output and low sales expenses. At the same time, it once again confirms Brother Qiang's view that "it can't be big and can't go far",
04|Customer
(1) Customer volume (flow)
Let's take a look at the general strategy first:
Look at Riel again:
Fault, but also to convert him:
(2) Customer acquisition cost (person-time/yuan)
Without detailed data, let's assume that selling expenses = customer acquisition costs:
If it is true, Tongce is indeed good, no wonder Arrail can't, the most important customer acquisition ability and cost are not good, and the stock price is low.
05|Scale
(1) Look at the general policy first
Judging from the data, Tongce is more like a "Zhejiang head dental chain", with a total of only 100, and Zhejiang Province accounts for more than 70%. From this point of view: first, it is impossible to become a "real Mao"; Second, the ability to go out is worth skepticism. The conclusion is likely to be that when the capital market is good, there is speculation, and Tongce really believes it, and then the capital market fails, and Tongce is fooled and lame.
(2) Perspective
First, from the perspective of the proportion of quantity, whether it is Arrail, Tongce, or the chain head institutions, it is a bit "far-fetched", and the market share is too small;
Second, from the perspective of institutional thresholds, dental clinics are recorded, and dental hospitals are approved systems, which do not constitute obstacles to expansion or high costs; To put it bluntly, "the threshold is very low", but the scale of the head institution cannot go up, and the reason is pondering;
Third, from the perspective of the model, Tongce "penetrates a province", Arrail "blossoms in the whole country", and at present, the Tongce model is better than Arrail, but the future space Riel is better than Tongce;
06|Development Strategy: Acquisition seems to be the only way out
(1) General policy
"Acquisition" and "expansion" are the established strategies of Tongce, which is to be a "dental hospital platform", build its own capabilities, and "rapid expansion of mergers and acquisitions", that is to say, "Tongce did not have enough experience in mergers and acquisitions and franchises before";
The view of "more than 200,000" is questionable, at least from the data disclosed by dental practitioners, the number is stagnating and shrinking slightly; "Templated", "point-and-shoot camera", this ideal is very plump, the reality is very skinny, medical itself is a "very low standardization" industry, "the dental industry is a highly operable industry", and the standardization of oral medical care is "more difficult";
"How to fulfill the expectations of the acquisition target or franchisee for Tongce"? Brand? Don't talk nonsense, Brother Qiang has always believed that "there is no brand and brand empowerment in China's private medical care", so what else? It seems that there is nothing else to think of except the supply chain.
This is not the "fault" of Tongce, there is a curve in chain management:
The stronger the product (refers to the product as the main output of the chain), the stronger the linkage (refers to the tightness, feasibility, replicability, etc.). However, it is difficult to chain service chains, and medical services are "even more difficult".
(2) Arrail
Arrail is in a similar situation, limited by profitability. But Arrail's biggest challenge in the future is to expand and replicate on a large scale in 10 provinces, which is the "lifeline".
The first comparison of dental services with dialysis services
According to the business analysis logic of the oral cavity, fill in the dialysis data (note: I found a central data of medical insurance, competition, and profits in the middle of the stream for reference) to see what will happen?
01|Data comparison
(1) Reception volume
The number of consultations is the core operation indicator of the oral cavity, and the "outpatient volume" is the basis of "income".
1.1 Average annual number of consultations: The annual number of dental consultations does not exceed that of dialysis centers by much, and even exceeds the average number of Arrail;
1.2 The annual volume of dental chairs: it must be high in the oral cavity, because the hemodialysis unit (1 dialysis machine + 1 bed/chair, single treatment time ≥4 hours) has an upper capacity limit: 4-6 people;
(2) Doctor's consultation
2.1 The production tools of the oral cavity are "doctors' hands": revenue plans are "hand-rubbed"! There is also an "upper limit" on the "productivity" of doctors, such as rest, operation proficiency, difficulty of different patients, etc.;
2.2 Dialysis does not "rely on the hands of doctors", doctors mainly diagnose, prescribe, and dispose of it, and a lot of treatment work is done by nurses and dialysis machines;
Summary: The number of doctors in dental institutions> the number of dialysis centers, the number of dialysis centers> the number of dental institutions, the number of single-tooth chairs in dental institutions> the number of dialysis seats;
(3) Outputs
Premise: The low price of each dental center is different, and independent pricing is the mainstay; The pricing of dialysis institutions is subject to the provincial and municipal medical insurance pricing, and the medical insurance pricing, total medical insurance payment, and proportion of each province and city are very different; Therefore, only samples can be taken for comparison for reference:
3.1 The output of the oral single-tooth chair is "undoubtedly" higher than that of the single dialysis position of the dialysis institution, mainly because: first, the dialysis machine has an upper limit on the production capacity, and second, the pricing principle is different;
3.2 Total output per unit: the oral cavity is about 2-3 times that of the dialysis institution, because under normal circumstances, the annual oral volume is greater than that of the dialysis institution;
3.2 Unit profit output: oral cavity is about 2 times that of dialysis institutions;
3.3 Unit price per passenger:
Tradition holds that "mouth" = "high", and that is where money is spent. "Dialysis" is a "life-saving", and it is more "high" and not touching. But in fact: the "unit price per customer" of the oral cavity is not much higher than the "single cost" of dialysis!
According to the above intercepted data, the "unit price per customer" of oral cavity is higher than the "single cost" of dialysis: about 127 yuan, close to 18% of the premium. Wasn't it unexpected?
02|Cost structure
(1) Direct treatment costs
Dialysis < the oral cavity because dialysis requires the use of a standard "four-piece suite" for each treatment: an artificial kidney (various types of dialyzers), a needle, a tubing, and a dialysate. In addition to implants and orthodontics, other pediatric teeth and general diseases require very few "medical consumables";
(2) Labor costs
The reason why the oral cavity is much higher than dialysis is that the total number of dentists is greater than that of dialysis, and secondly, the number of dentists ≈ "dialysis machines", and the high salary reflects the "labor value";
(3) Other expenses: all are about the same or no data, and the impact is not great;
(4) Doubtful: sales expenses
In principle: the oral cavity is definitely greater than dialysis;
Numerically: Tongce < Dialysis < Riel, it's a bit strange, is Tongce really so "NB"!? There's no way to dig deep into this!
03|Operations
(1) Follow-up rate: the money for the oral cavity is "hard to earn"
In the annual report, Arrail specifically listed the re-visit rate (that is, a patient visited ≥ twice in the year) of 47.9%, which means that this data is very good in the dental industry, and Tongce did not disclose it;
Dialysis is a natural "follow-up business", and patients need to return to the dialysis center 2-3 times a week for treatment, which cannot be interrupted, and it seems that there is nothing wrong with the 100% follow-up rate;
(2) Customer acquisition and churn
2.1 Customer Acquisition:
This is the "life and death event" of the oral cavity, and only if there is enough "customer flow" to enter the outpatient clinic, there will be a later income; And it is a reciprocating cycle, every day, month, and every year to consider customer acquisition, and now the cost of customer acquisition is getting higher and higher, even outrageously high, so oral customer acquisition is "advanced algebra". Dialysis has an upper limit of patients served, generally around 200, and independent dialysis centers with more than 300 are rare. Therefore, dialysis acquisition is "addition and subtraction", and when the patient is "full", he can "lie flat".
2.2 Churn:
The dental industry is most afraid of "loss", and the "most difficult to block" is also loss, market competition, service experience, medical quality, price factors, location and other factors will be affected. If the 47.9% follow-up diagnosis is reversed, the attrition rate is close to 52% (i.e., the patient comes once and never comes back); The loss of dialysis institutions is mainly deaths and others (such as market reasons, hospital transfers, etc.), which will not exceed 10% under normal circumstances;
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Source of this article: Qiang said to run a doctor
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