Orient Securities: Leading medical and beauty institutions benefit from supply expansion and compliance
The Zhitong Finance App learned that Orient Securities released a research report saying that approval of three types of medical and aesthetic injectable products has been accelerated, and the supply of compliant materials is already significantly richer than in 2020. Supervision, traffic platform reviews, and tax regulations work together to reduce the space for “small, scattered, and chaotic” institutions to obtain customers at low prices. With licenses, doctors, brands, centralized procurement and information technology systems, leading agencies are expected to take on the resources of the cleared institutions and promote an increase in market share. As the supply of upstream materials in the medical and aesthetic industry continues to increase, the voice of medical and aesthetic institutions is increasing; at the same time, as regulatory policies continue to advance, the concentration of market share on leading companies is accelerated, favoring leading compliant medical and aesthetic institution enterprises.
Orient Securities's main views are as follows:
Accelerating the expansion of upstream medical and aesthetic compliance materials, increasing the number of categories available to medical and aesthetic institutions, and improving the voice of the industry chain
From 2020 to 2026, approval of three types of medical and aesthetic injectable products was accelerated, and the supply of compliant materials was significantly richer than in 2020. By the end of 2020, there were a total of about 50 hyaluronic acid, botulinum toxin, and collagen injection products approved in China in 2020, including about 40 hyaluronic acid, 6 botulinum toxin type A (3 types), and about 5 collagen. Regenerative injection materials have not yet formed large-scale approved supply; according to Guanjianxia statistics, as of March 2026, the number of approved products had increased to 121, including 82 types of hyaluronic acid, 7 types of botulinum toxin, 16 types of collagen, and 16 types of recycled materials. Among them, from May 2025 to March 2026, the number of approved products increased from 94 to 121, an increase of 29%. The increase mainly came from domestically produced hyaluronic acid, recombinant collagen, and recycled materials. The rapid expansion of compliant products has, on the one hand, reduced institutions' dependence on a small number of traditional hyaluronic acid products, and enriched anti-aging, contouring, and skin rejuvenation programs; on the other hand, it has also enhanced bargaining and product selection space for medical and aesthetic institutions. Chain leaders with doctor training, centralized procurement, and multi-product combined treatment capabilities are more likely to turn “new supply” into revenue.
As policy supervision continues to advance, disorderly competition among medical and aesthetic institutions has eased, and leading compliance agencies are expected to benefit
On the policy side, supervision moved from special rectification to normalization and cross-departmental supervision: in 2020, eight departments required strict institutional approval, diagnosis and treatment subjects and project filing; in 2021, eight departments carried out special actions to combat illegal medical treatment and beauty; from September 2022 to February 2023, eleven departments including the General Administration of Market Supervision concentrated on controlling false publicity, illegal practice of medicine, counterfeit drugs and price fraud; the “Guiding Opinions” issued in 2023 further establish a long-term mechanism for comprehensive cross-departmental supervision. The new value-added tax regulations, which will be implemented in 2026, clearly exclude for-profit aesthetic medical institutions from the scope of tax exemption for medical services, increasing tax and operational compliance costs. According to agency data, according to iResearch's statistics, in 2019, there were about 13,000 qualified medical and aesthetic institutions in China, but more than 80,000 stores operated illegally; by January 2024, according to statistics from the National Health and Health Commission, the number of compliance specialist aesthetic institutions increased to 18,600; according to Langzi's 2025 annual report, more than 18,000 black institutions were shut down and more than 320 illegal doctors had their licenses revoked. The bank believes that supervision, traffic platform reviews, and tax regulations will jointly reduce the space for “small, scattered, and chaotic” institutions to acquire customers at low prices. With licenses, doctors, brands, centralized procurement, and information technology systems, leading institutions can expect to take on the resources of the cleared institutions and promote an increase in market share.
Medical and aesthetic institutions have shown an improving trend in financial performance
1) Langzi shares: In 2025, medical and aesthetic revenue of 3,026 billion yuan, gross margin increased by 1.3pct to 55.8%; of which non-surgical revenue was 2,668 billion yuan, the same increase was 6.84%; according to the 2026H1 performance forecast, the company expects to achieve net profit withheld from mother of 130 million to 170 million yuan, a year-on-year change of -4.51% to +24.87%. If factors such as profit and loss of investment in Ruoyu shares and payment of supplementary income tax and late fees are excluded, the company's daily operating net profit is expected to increase 30%-60%, reflecting the same increase of 30%-60% as well as medical and aesthetic Women's clothing main business Operational improvements brought about by growth, supply chain, and cost control. 2) Beautiful Garden: Revenue in 2025 was 3.01 billion yuan, up 16.7%; adjusted net profit was 381 million yuan, up 41.0%; 2026H1 shows that the company expects to achieve revenue of no less than 1.88 billion yuan, a same increase of not less than 28%, adjusted net profit of not less than 260 million yuan, and no less than 36%.
Risk warning: Industry competition intensifies, consumption falls short of expectations, and certification of upstream materials falls short of expectations.