CISI FIN released a research report maintaining its financial forecasts for BEAUTYFARM MED (02373), projecting revenues of RMB3.05 billion/RMB3.41 billion/RMB3.76 billion for 2025-2027 respectively, with net profit attributable to shareholders of RMB320 million/RMB380 million/RMB440 million respectively. Referencing the valuation levels of terminal medical consumer stocks Yonghe Medical (02279) and Gu Shengtang (02273), the firm assigns the company a 30x PE multiple for 2025, corresponding to a target price of HK$45 (previous target: HK$19.6), maintaining a "Buy" rating.
Key highlights from CISI FIN include:
Event: The company's H1 2025 adjusted net profit reached a historical high with abundant cash flow and strong cash generation capabilities.
Adjusted net profit hits record high with robust cash flow In H1 2025, the company achieved revenues, net profit, and adjusted net profit of RMB1.46 billion (RMB, unless otherwise stated), RMB170 million, and RMB190 million respectively, representing year-on-year growth of 28%, 36%, and 38%. Operating cash flow reached RMB410 million, up 84% year-on-year; cash and cash equivalents totaled RMB2.0 billion, increasing 28% year-on-year.
By business segment, beauty and wellness services generated revenues of RMB810 million, up 30% year-on-year; medical aesthetics services achieved revenues of RMB500 million, up 13% year-on-year; sub-health medical services realized revenues of RMB150 million, surging 108% year-on-year. The number of sub-health medical clinics expanded to 11 in H1 2025. Women's specialized care centers, as the most important segment within sub-health medical services, saw revenues grow 173% year-on-year in H1 2025. The business continues to establish production-research-education partnerships with medical partners, establishing "Gynecology Designated Clinical Training Exchange Centers" and "Gynecology Research Training Model Bases" to advance professional development in women's gynecological anti-aging fields.
Increased stake in Naryie to 90%, improved profitability post-acquisition In May, the company announced an increase in its Naryie stake by 20%, raising its shareholding to 90%. Post-acquisition, Naryie's profitability further improved, achieving revenues of RMB280 million in H1 2025 with adjusted net margin rising from 6.5% pre-acquisition to 10.4%, demonstrating significant integration benefits. As an intelligent beauty brand based on Traditional Chinese Medicine theory, Naryie received the "China's No.1 Intelligent Beauty Brand" certification from Frost & Sullivan during its 18th anniversary celebration. Simultaneously, the group's first AI digital transformation flagship project, the "Intelligent Beauty 2.0 System," will be implemented at Naryie.
Emphasizing shareholder returns with RMB300 million cumulative dividends over three years In March, the company officially announced its "Capital Market Value Enhancement Plan" featuring three core initiatives aimed at strengthening shareholder return capabilities, optimizing capital structure, and driving long-term sustainable development. Over the past three years, the company has cumulatively declared RMB300 million in dividends. The first dividend under the "Shareholder Return Plan" will be distributed before September 26, 2025, with a dividend of HK$0.52 per share.
Risk factors: Policy risks; store expansion falling short of expectations; sales underperformance; intensified industry competition, among others.