Three business platforms to create a differentiated product portfolio. In 20 13, the company took Ewan hyaluronic acid as the agent to cut into the field of medical beauty, and built Ewan into the best-selling hyaluronic acid brand in China with excellent sales capacity (sales14-18cgr = 44.3%). 20 18, the company acquired Sinclair, a British medical beauty company, and obtained its full range of medical beauty products. 20 19-2020 further invest in R2 company of the United States (the world's leading developer of frozen skin system) and Kylane company of Switzerland (the global interest of Maili hyaluronic acid). It has the right to obtain the intellectual property rights of its two key research and development products in the field of facial and body fillers and its global rights at an agreed price. Since then, it has established a rich and differentiated product portfolio to provide consumers with an integrated solution for whole-body medical beauty. In the next five years, several products of the company are expected to be listed one after another, among which there are many heavy products such as Ellanse, Silhouette, Maili and Botox. Has a rich product line (filling+shaping+lifting+wrinkle removal+whitening; Head+neck)+strong promotion ability, 20-25E company's medical pipeline sales are expected to achieve a compound growth of more than 20%.

Global operation layout, domestic and international double circulation. The company has built two sets of international and domestic sales networks: 1) International: Sinclair has a global production capacity and sales network, and has set up self-operated teams in 9 countries including Brazil, South Korea and Russia, covering more than 60 countries and regions. Sinclair's global layout is helpful to integrate foreign advanced technologies & products are quickly introduced into China, and the volume is realized with the help of domestic medical beauty wave; 2) Domestic: Establish two sales systems: East China Ningbo (agent products) and self-operated group team (high-end self-operated products) to promote product sales and feed back R&D and M&A. ..

The rise of medical beauty is expected to reshape the valuation. Under SOTP valuation method, the reasonable market value of the company is 74.237 billion yuan. At present, the company has three main businesses: pharmaceutical business, pharmaceutical industry and medical beauty, of which commercial contribution income (19 67%), industrial contribution profit (19 72%) and medical beauty business account for a relatively small proportion (19 6%), but they are rising rapidly and gradually become another important source of profits.

1) Commercial business: Referring to the unanimous expectation of 2 1 comparable company Wind on PE 10x, considering that the net profit CAGR of the company's commercial sector 20-22E is lower than that of the comparable company, 2 1 9x PE is given, corresponding to a market value of 61560,000 yuan;

2) Industrial business: Referring to the unanimous expectation of 2 1 comparable company Wind for PE24x, considering that the company's industrial net profit CAGR is lower than that of comparable companies, 2 1 gives 20x PE, corresponding to a market value of 49.667 billion yuan;

3) Medical beauty business: I) Due to the influence of YQ, it is estimated that the sales volume of 10,000 agency products will drop slightly in 20 years, and it is expected to increase again in 2 1 year, achieving nearly 750 million sales. With reference to the net interest rate level of East China Ningbo (2019:1.5%), the company holds 5% shares. Ii) Self-operated business: The company expects that Ailanshi is expected to be listed on 1H2 1, and its sales in the first year of listing is expected to exceed 1 billion yuan. The reference industry can compare the company's net interest rate level (20 19, Aimeike 53.4%; Huaxi Bio 3 1.0%), we estimate that the net interest rate of 2 1 company's self-operated products is about 40%; 3) Overseas business: Overseas business is expected to decrease by 0.40% due to the influence of YQ in 2020, and the pent-up demand of 202 1 is expected to be released, with an expected increase of 0.50%. With reference to the net interest rate of overseas business in 20 19 (23.5%) and the net interest rate of overseas medical and beauty companies (~20%), it is estimated that the net interest rate of overseas business in 200210 will be about 22%. The company's medical beauty business is expected to achieve a net profit of 202 million yuan from 20.21,and 219/x PE will be given (compared with the company's unanimous expectation of 9 1x), corresponding to a market value of184140,000 yuan.

Hyaluronic acid filling is more popular in China.

Hyaluronic acid injection is one of the most popular items in non-surgical medical beauty, and it is also favored by Chinese people. Non-surgical items are favored by consumers because of their high safety, small trauma, quick recovery and good effect, among which botulinum toxin and hyaluronic acid are the most sought after. According to the statistics of the Global Society of Aesthetic Plastic Surgery (ISAPS), the number of global hyaluronic acid injection projects increased 13. 1% in 20 18 years, accounting for 29.5% of the total number of non-surgical medical cosmetic projects, second only to botulinum toxin. Hyaluronic acid injection is the most popular item in China, accounting for 56% of the non-surgical items in 20 18, far higher than the global level. Hyaluronic acid injection has become a basic project of medical beauty in China (the market scale of 20 19 is 4.76 billion yuan), with high frequency of use (1-2 times/year), and frost &; Sullivan predicted that the China market is expected to maintain nearly 20% growth in 2020-2024.

Domestic competition is fierce, and imports occupy the high-end market

The 4+3 pattern of China market is emerging, and domestic enterprises still need to upgrade their brand power and technology. Since restylane, the first hyaluronic acid filler in China, went on the market in 2008, the hyaluronic acid industry has developed rapidly (2015-2019 cagr = 31.5%). By the end of 19, there were 17 enterprises with more than 40 kinds of sodium hyaluronate filling products listed in China, forming a pattern of 4 import giants (accounting for 70% of the market)+3 domestic leaders (accounting for more than 20% of the market)+several other enterprises. Hyaluronic acid filler has a strong consumer property, and consumers are more willing to pay for imported brands. At present, China has the characteristics that imports occupy the middle and high-end market, domestic products compete for the low-end market, homogeneous varieties compete fiercely, and prices continue to fall. It is believed that the competition of low-priced products will become more and more fierce in the future, and domestic enterprises need to seek breakthroughs in technology and brand.

Yiwan consolidates the mid-market and Maili attacks the high-end market.

"One Bowl+Maili" combination boxing covers the mid-to high-end market in all directions. With excellent product quality, rich SKUs (including hemp products, including C, CPlus, V and VPlus) and the company's strong promotion ability, Yiwan has achieved rapid growth in sales since 13 entered China (18 ~100000 USD), occupying the throne of the best-selling products in the market (10000 USD). Yiwan is moderately priced and positioned at the middle end, bearing the brunt of domestic competition, and its growth rate is expected to slow down gradually in the future. In 2020, the company introduced the high-end hyaluronic acid mail (I three-dimensional structure, richer and more flexible than Qiao Ya Deng Yanfeng) from Kylane, Switzerland. Maili hyaluronic acid is currently in the pre-registration preparation stage. We expect to be listed in China in 24 years, and it will grow into a product of 65.438+0.5-2 billion with its excellent product quality (see Figure 39 for the forecast process).

Ellanse= hyaluronic acid+Tong Yan Zhen

Ellanse: Stimulates collagen regeneration and has the function of filling and repairing subcutaneous collagen fibers. Different from the modification and filling of hyaluronic acid, Ellanse (commonly known as Beauty Needle) mainly relies on the establishment of new scaffolds to stimulate collagen regeneration and support subcutaneous wrinkles. Its advantages mainly include: 1)vs Tong Yan Zhen takes effect quickly: it contains 70%CMC (gel carrier) and achieves instant filling effect; 2) Long duration: after 2-3 months, CMC is gradually metabolized, and 30% PCL (microsphere polycaprolactone) continuously stimulates fibroblasts to produce collagen, which lasts for 1-4 years (there are four SKUs3 s, m, l and e) and naturally rejuvenates: the subcutaneous collagen regeneration is restarted, and the youthful scaffold is rebuilt (the elastic modulus G' is close to/kloc-). 4) It is not easy to shift, and the filling effect is better (the viscosity is about 1000cP, which is about 5 times that of hyaluronic acid).

Ten years of application experience, safe and effective filling products.

Ellanse is both effective and safe, and has a high reputation in the market. Ellanse was listed in Europe in 2009, and has been used for more than 65,438+00 years, showing excellent curative effect and safety: 65,438+0) Effectiveness: both real-time filling and long-term effect of Ellanse are better than hyaluronic acid (6-month satisfaction: Ellanse achieved an obvious improvement ratio of 85%vs hyaluronic acid 64%; 12-month satisfaction: compared with hyaluronic acid 10%, Ellanse achieved a 53% improvement ratio); 2) Safety: Ellanse showed good safety after listing. During 20/7/2009, the incidence of swelling and nodules was 2.0%-2.3%, and the incidence of other adverse reactions was less than 0.5%(vs Joyaden swelling rate was 10.3%).

Product models are rich, providing consumers with diverse choices.

Ellanse is the most durable non-permanent filler in history, and it is expected to become a heavyweight of 2 billion. In order to avoid the inconvenience caused by frequent injection and reduce the economic cost, long-term effect has become an important direction of filling product optimization (such as cross-linking technology in hyaluronic acid, microsphere technology of microcrystalline porcelain and children's needle). Tannase can control the action time by controlling the molecular chain length of PCL. The products include four models, S/M/L/E, and the validity period varies from 1-4 years. It is the only multi-model long-lasting filling machine in the world, providing consumers with more choices. Ellanse is currently in the stage of listing review, and the company is expected to be approved for listing 1H2 1. In the future, with product advantages, industry reputation and sales promotion, Ellanse is expected to grow into a 2 billion-level product.

Face Embedding: Carving Time

Minimally invasive lifting to prevent sagging. Face embedding is also called "line carving" and "V-face lifting". Its principle of action is to implant absorbable protein line in dermis or subcutaneous layer, stimulate fascia layer and collagen regeneration, rearrange stiff and drooping muscles or tissues, support superficial fat, and achieve the effect of improving nasolabial fold wrinkles and contours. Compared with minimally invasive skin lifting surgery, it has the advantages of low cost, short time and quick recovery, and is loved by beauty seekers, which replaces the market demand of skin lifting surgery to a certain extent (face relaxation and serious aging still need surgery).

The market is still in the incubation period, and compliant products are scarce.

Implantation line has high requirements for doctors' operation methods, and compliance products are scarce, so it is optimistic about the long-term development of the market. At present, the domestic buried wire market is still small, mainly because: 1) buried wire mainly solves the problems of aging face and sag. The consumer of medical beauty in China is the post-90s generation, and the demand for facial lift is still relatively small. In the next 90 years, it will gradually enter middle age, and the market demand is expected to be improved; 2) Catgut embedding needs to be embedded in subcutaneous fascia. If the catgut embedding is too shallow, the face will be uneven, and if the catgut embedding is too deep, the facial nerve will be easily damaged, and there is a risk of infection, which requires high skills and operation of doctors. 3) At present, there are few compliant products on the market (most of them are used for surgical suture, and Aimeike is the first facial implant line in China). In the future, with the increase of anti-aging demand, the listing of more compliant products and the education of doctors, the embedded line market is expected to usher in rapid growth.

Silhouette: Provide face+neck integrated solution.

The only 3D tapered hanging suture product in the world. Silhouette is the only facial implant line approved by FDA in the world. Compared with other products, it has the following advantages: 1) face and neck reconstruction, providing an integrated solution; 2)3D cone technology, which can fix subcutaneous tissue instantly (3D hollow cone, which can provide 360 annular lifting vs other products with barbed design, and provide point/surface lifting); 3) Compared with the mainstream PPDO material, Silhouette uses PLLA/PLGA silk, which can effectively stimulate the body to produce type I collagen, achieve lifting effect and improve skin quality. Silhouette is currently in the clinical stage, and we expect it to be approved for marketing in 2023. After listing, with its clinical advantages and good industry reputation, it is expected to grow into a 500 million-level product (silhouette use survey shows that 82% of consumers are willing to recommend it to family and friends, and 79% of consumers are satisfied with the use effect).

Global: the most popular non-surgical medical beauty project

Botox injection is the most popular project in the world's light medical beauty, and Botox occupies the first place. According to ISAPS statistics, in 20 18 years, the global injection volume of botulinum toxin was 665,438+million times, which was 1.6 times that of hyaluronic acid injection, accounting for 48% of the total non-surgical medical beauty projects, ranking first with the year-on-year growth rate of 21. In 20 18, the global market size of botulinum toxin terminals was USD 5.5 billion (+2 1.4%yoy), of which the market share of Botox of Allergan was 65%, Dysport of Ipsen was 7%, and other products (mainly from German Merz and Korean companies) accounted for 28%.

China: There is a strong demand for terminals and a lack of product supply.

Products are out of stock, parallel imports are prevalent, and new products are in urgent need of approval. According to Frost & Sullivan's data, in 20 19 years, the sales of China botulinum toxin compliance market was 3.6 billion yuan (2016-2019 cagr = 31.6%), 2016-20. On the other hand, since 20 12, only two domestic products (botulinum toxin (Allergan) and Hengli (made in Lanzhou)) have been approved for marketing. Botox covers high-end people, and constantly covers low-end people. There is a gap between high-end products and high-end products, and product supply is scarce. Botulinum toxin is a neurotoxic drug, and the evaluation of CDE is cautious. In 2020, two products, Ipsen and Hugel, were approved for listing, releasing positive evaluation signals. With more products entering the market in the future, the compliance market is expected to maintain rapid growth (2020-2024E CAGR= 17.3%).

Join hands with Jetma to enter the China market.

The exclusive agent of Jetema Botox products has increased the weight of medical pipelines. Jetema, a well-known pharmaceutical and medical device research and development company in South Korea, has the original species that meet the global standards (it is the only company in the world that has three botulinum toxins A, B and E at the same time). In August 2020, the company signed a strategic cooperation agreement with it, and obtained the exclusive agency right of its botulinum toxin A products in China. The company expects that the product will start clinical registration in 4Q20, and it is expected that it will be approved for listing in 2024E, further enriching the company's medical and beauty pipeline. At present, China's botulinum toxin market is growing rapidly and the product supply is scarce. We expect that the company's botulinum toxin products are expected to become a heavyweight of 2 billion.

Optoelectronic medical beauty: medical beauty during lunch break, catering to the anti-aging needs of the public

Fast food can solve skin problems in an all-round way in beauty beauty. Optoelectronic medical beauty has rich functions (freckle removal and skin rejuvenation are the main needs, accounting for more than 50% in total; Medical insight (20 16) data), wide price range (as low as 100 yuan, as high as 10,000 yuan), convenient and fast (treatment needs 10 minutes-1.5 hours), and it is expected to gradually develop into mass consumption. We believe that the penetration rate of photoelectric medical beauty industry, which focuses on skin rejuvenation and anti-aging, will continue to increase from 90 to 30 years old (the proportion of non-surgical facial rejuvenation projects in the total course of treatment in 20 18 years: China 4.99% vs the United States 10.4 1% vs Japan 13.53%). In 20 19, the market size of photoelectric medical beauty equipment in China is about16.9 billion yuan. It is predicted that the prosperity of photoelectric medical beauty equipment industry will be improved based on the rise of anti-aging trend (2015-2021ecagr =19.7%). 2) The industry supervision has become stricter, and the parallel/fake market has gradually turned into a compliant market (new oxygen white paper: 20 19, Chinese medicine beauty equipment in legal medical and beauty institutions 10% is fake, and10% is parallel; 90% of illegal institutions are fakes, and 10% are parallel imports).

R2: the global leader of skin freezing system.

Led by industry leaders, build a world-famous brand. American R2 Company was founded on 20 14, led by experts in the industry, focusing on the research and development of medical beauty equipment. Glacial, a new product of skin freezing system, was successfully transferred to Allergan at a high price. 20 19. In April, the company signed a strategic cooperation with R2, and planned to invest USD 30 million in its equity to become its shareholder (by June 2020, it had invested USD 20 million, accounting for 26.60%), and obtained the distribution rights of its medical devices F 1 F2 and its future improvements in 34 Asia-Pacific countries, such as Chinese mainland, Japan and South Korea.

The company is the leading platform leader in China, forming three business layouts: pharmaceutical commerce, pharmaceutical industry and medical beauty. We predict that the revenue growth rate of the company will be 65,438+0.8%/65,438+03.3%/65,438+03.9% in 20-22 years, and the net profit growth rate of the company will be 4.65,438+0%/65,438+03.9%.

1) Operating income. Commercial business: in 19, the company's commercial income was 25.098 billion yuan (+9.8% year-on-year). Under the influence of YQ in 20 years, it is estimated that the income of commercial sector will be the same as that in 19 years, and will return to 5- 10% growth in 2 1-22 years. Industrial business: 19 years, the company's industrial income1086.5 billion yuan (+26.7% year-on-year). In the past 20 years, due to the double influence of YQ and acarbose, it is estimated that the industry will achieve double-digit income growth (1H20+6.4%yoy) for the whole year, starting from 2 1. Products such as caspofungin and liraglutide are expected to be approved for listing one after another. We predict that the industrial sector of the company is expected to achieve 14%/2 1% growth in 22 years. Medical beauty business: In 19, the overseas business of medical beauty achieved revenue of 509 million yuan (revenue in 18 was not disclosed, and there was no growth rate). In the past 20 years, overseas YQ has been severe, and it is estimated that overseas medical and beauty business will decline by nearly 40%. 202 1 pent-up demand is expected to be released, with a growth of 0-50%, which will benefit in 2022. Due to the competition of domestic products, Yiwan's domestic medical and beauty business is expected to see a single-digit decline in sales in 19, and it is expected to be affected by YQ in 20 years, and 2 1/22 will stabilize and rebound to a small increase. Ellanse is expected to land in China on 20021,contributing to the growth of performance.

2) Gross profit margin. Commercial business: in 19, the gross profit margin of the company's commercial business was 7.7%. Considering the company's increasing commercial service capability and specialized cold chain logistics distribution (high-margin business), it is estimated that the gross profit margin will be 7.8%/7.9%/7.9% in 20-22 years; Industrial business: The gross profit margin of the company's industrial business was 83.4% in 19. Considering the price reduction of acarbose in the past 20 years and the upcoming listing of high-margin products such as liraglutide, it is estimated that the gross profit margin will be 83.0%/84.0%/84.0% in 20-22 years. Medical beauty business: the gross profit margin of the company's medical beauty business in 19 was 72.4%. Considering that new products with high gross profit have been launched since February1,it is estimated that the gross profit margin will be 72.4%/78.7%/8 1.5% in 20-22 years.

3) Sales expense ratio. In the past 20 years, due to the influence of YQ, academic promotion activities have decreased, but the personnel cost is relatively rigid, and due to the slowdown in income growth, it is expected that the sales expense rate will increase. In the future, under the background of centralized procurement, the sales expense ratio is expected to decrease. However, since 2 1, the company has launched several new medical and industrial products, and its promotional activities have increased. On the whole, it is estimated that the company's sales expense ratio will be basically stable in 2 1 year and will increase in 22 years (it is estimated that the sales expense ratio will be17.8%17 in 20-22 years).

4) Management rate. Due to the influence of YQ, the progress of clinical research and development in recent 20 years has been slightly delayed. Considering that the income growth slows down at the same time, the management fee is expected to be relatively stable, and several new products are expected to start clinical practice in 2 1 year. At the same time, considering the efficiency improvement under the refined management of the company, it is estimated that the company management fee rate will be 3. 1%/3. 1%/3.2% in 20-22 years.

Furthermore, we forecast the sales of the company's five main products, Ivan hyaluronic acid, Maili hyaluronic acid, Ellanse, Botox and Silhouette, and analyze the long-term development prospect of the company's medical and beauty business. We expect that the sales of medical and beauty sector will achieve a compound growth of more than 20%. The core assumptions are as follows:

According to SOTP valuation method, the overall reasonable market value of the company is 74.237 billion yuan;

1) Commercial business: Referring to the unanimous expectation of 2 1 comparable company Wind on PE 10x, considering that the net profit CAGR of the company's commercial sector 20-22E is lower than that of the comparable company, 2 1 9x PE is given, corresponding to a market value of 61560,000 yuan;

2) Industrial business: Referring to the unanimous expectation of 2 1 comparable company Wind for PE24x, considering that the company's industrial net profit CAGR is lower than that of comparable companies, 2 1 gives 20x PE, corresponding to a market value of 49.667 billion yuan;

3) medical beauty business: 202 1, and the company's medical beauty business consists of three parts: 1) agency business: Ewan hyaluronic acid is an agent product of East China Ningbo (the company holds 5 1%), according to East China Ningbo19 (1.5%). Ii) Self-operated business: Ellanse expects 1H2 1 to go public, referring to the net interest rate level of comparable companies in the industry (20 19, 53.4% for Aimeike; Huaxi Bio 3 1.0%), we estimate that the net interest rate of the company's self-operated product 202 1 is around 40%; 3) Overseas business: With reference to the net interest rate level of overseas business in 20 19 (23.5%) and the net interest rate level of overseas medical and beauty companies (~20%), it is estimated that the net interest rate of overseas business in 20021year will be about 22%. The company's medical beauty business is expected to achieve a net profit of 202 million yuan from 20.21,and 219/x PE will be given (compared with the company's unanimous expectation of 9 1x), corresponding to a market value of184140,000 yuan.