On October 15, 2025, Beauty Farm Medical Health Industry Ltd. (02373.HK), the "first beauty salon stock" listed in Hong Kong, announced the full acquisition of Shanghai Silianli Industrial Co., Ltd. for a consideration of 1.25 billion yuan. This transaction is not only the largest M&A deal in China's beauty industry in 2025 but also heralds a new era: the top three brands in the sector—Beauty Farm, Narui'er, and Silianli—are united under a single capital umbrella for the first time.
The deal was structured using a "cash + shares" payment method. Approximately 836 million yuan was paid in cash, and about 15.798 million consideration shares were issued to SYL Holding, the original controlling shareholder of Silianli, making it a shareholder holding approximately 6.28% of Beauty Farm.
Why Silianli? This acquisition is not an impulsive move but a meticulously calculated strategic step by Beauty Farm, based on clear industry insights and its own development strategy. At its core lies the company's firm bet on a future where the "winner takes all" in the high-end beauty market.
In China's highly fragmented beauty services market, even the top three players hold minimal market share. According to Zhyan Consulting data, in 2021, the market shares of Beauty Farm, Narui'er, and Silianli were only 0.2%, 0.2%, and 0.1%, respectively. This "large industry, small companies" landscape presents a prime historical window for rapid consolidation and scaling through mergers and acquisitions.
Silianli's value is first evident in its scarce "location assets." Founded in 1996, Silianli is an established enterprise with nearly three decades of experience in the high-end beauty service sector. Its operations are highly concentrated in China's most economically powerful cities, with over 90% of its revenue generated from tier-one and new tier-one cities.
Particularly in the four super first-tier cities—Beijing, Shanghai, Guangzhou, and Shenzhen—revenue from its stores accounts for a significant 61%. Post-acquisition, Beauty Farm's store coverage rate in high-potential commercial districts (such as premium shopping malls) will increase to 42%, nearly capturing half the market. This signifies a commanding control over the entry points for high-net-worth customer traffic.
Secondly, Silianli brings substantial "financial assets" and "member assets." In 2024, Silianli achieved revenue of 850 million yuan and a net profit of 81 million yuan, demonstrating solid profitability. The integration of its approximately 60,000 direct-operated active members will boost Beauty Farm's total membership base by over 44%.
These high-net-worth members represent the most valuable source of traffic for the "Double Beauty + Double Health" business model (encompassing lifestyle beauty, medical beauty, health services, and sub-health medical services), laying a strong foundation for subsequent conversions to high-value medical services.
From a valuation perspective, the deal can be termed "shrewd." An independent valuation by JZ Assessment valued Silianli at 1.395 billion yuan, making the 1.25 billion yuan acquisition price a significant discount, equivalent to 89.6% of its valuation.
This reflects the strong negotiating position Beauty Farm holds as a listed platform and the leading consolidator in an accelerating industry consolidation phase. Market analysts generally view this valuation as reasonable, even on the lower side, leaving room for future value appreciation.
The completion of the deal is merely the first step; the real test lies in integration. The market reacted with a dose of cold water: on the day of the acquisition announcement, Beauty Farm's stock price opened high but closed down 5.43%. This reflects deep-seated market skepticism about whether the anticipated synergies from this giant merger can materialize.
The foremost challenge is "brand synergy and internal competition." Beauty Farm's portfolio already includes multiple high-end brands like Beauty Farm, Bourgoin, and Narui'er. Adding Silianli inevitably raises concerns about brands cannibalizing each other and competing for the same customer base.
In response, Beauty Farm's management explains that while the target customer profiles of these brands are similar, the actual overlap is low. Furthermore, high-potential commercial districts can fully accommodate multiple brand outlets, creating a cluster effect rather than internal friction. However, clearly defining and executing differentiated positioning for each brand to avoid operational confusion will be a significant test of management acumen.
A deeper challenge lies in "operational integration and quality control." Beauty Farm advocates a "platform-based M&A" logic, focusing not on simple business addition but on empowering acquired brands through robust middle- and back-office capabilities (such as supply chain, IT systems, medical resources, and training systems) to achieve "revenue growth + efficiency improvement."
This methodology showed initial success in integrating Narui'er, whose adjusted net profit margin increased from 6.5% pre-acquisition to 10.4%. However, Silianli, being a larger and older brand, presents a far greater integration complexity.
More棘手的是 are the potential risk factors. Public information shows that Silianli and its brands have previously faced administrative penalties for issues like "using non-medical technical personnel" and "conducting unapproved medical activities." Consumer complaints regarding refund difficulties and service disputes are also found on platforms like the Hei Mao Complaints app.
These legacy issues represent "gray rhinos" that Beauty Farm must confront and thoroughly rectify. Any serious medical incident or brand reputation crisis could significantly undermine the strategic value of the acquisition.
Despite the formidable challenges, Beauty Farm's blueprint for the future is ambitious. The company projects that group revenue will exceed 4 billion yuan by 2026, with adjusted net profit surpassing 500 million yuan. This growth trajectory will strictly follow its dual-drive strategy of "organic growth + external acquisitions."
Organically, the company will deepen its "Double Beauty + Double Health" model, driving conversions from high-net-worth lifestyle beauty customers to the more profitable segments of medical beauty and sub-health medical services. Externally, with experience from over 30 acquisitions, Beauty Farm has explicitly stated it will continue seeking consolidation opportunities within the highly fragmented market. The acquisition of Silianli is likely just a mid-battle in its campaign to build a super platform in China's beauty industry, not the final chapter.
With the acquisition of Silianli, Beauty Farm's store network will leap to 734 outlets, drawing a clear boundary of influence on the map of China's high-end beauty market.
Market skepticism and stock price volatility, like brief anesthesia before major surgery, cannot obscure the milestone significance of this merger for the Chinese beauty industry's shift towards intensification, branding, and capitalization. As the industry moves from "wild growth" into the deep waters of "meticulous cultivation" and consolidation, the test is no longer just the boldness of capital, but the skill of operations and the patience of time.
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