Recently, Lepu Medical Technology (Beijing) Co., Ltd. announced a partnership with Meituan to promote its aesthetic medicine brands "Yueyayan" and "Flora," officially intensifying its efforts in the "baby face needle" market. This move is viewed as a crucial transformation for Lepu Medical amid ongoing performance pressures. However, the company faces a challenging path as competition in the aesthetic medicine sector intensifies, cash flows tighten, and goodwill remains high.
Continuous Performance Decline Amidst Collective Procurement and Merger Aftereffects As a leading player in the cardiovascular field, Lepu Medical has experienced persistent underperformance in recent years. In 2024, the company's revenue fell by 23.52% year-on-year, with a staggering 80.37% drop in net profit attributable to shareholders, marking the poorest record since its listing 16 years ago. In the first half of 2025, there has been no sign of recovery, with both revenue and net profit continuing to decline.
The significant shift in performance can be attributed to price pressures from drug and device collective procurement policies and the accumulated risks of goodwill impairment from previous frequent acquisitions. In 2024, the company recognized goodwill and other asset impairment losses of 251 million yuan. As of the first half of 2025, Lepu Medical's goodwill remains at 3.62 billion yuan, accounting for 14.35% of total assets, indicating ongoing impairment pressures in the future.
Entering Aesthetic Medicine: Red Sea Competition and Price Wars Emerge Facing sluggish core business growth, Lepu Medical is placing its hopes on the aesthetic medicine sector. In June, the company's independently developed polylactic acid facial filler (baby face needle) was approved for market release, becoming the seventh product in this category domestically and the fifth among local brands. The company is also expanding into hyaluronic acid and botulinum toxin, creating a triad of aesthetic medicine products.
However, the aesthetic medicine market is no longer a blue ocean. During the National Day holiday, New Oxygen launched a budget "baby face needle" priced at 2999 yuan, disrupting the previous market average of over 10,000 yuan, and triggering an imminent price war. With established entities like Aimeike having mature distribution channels and intense competition for services, it remains uncertain whether Lepu Medical can establish a foothold as a newcomer in this market.
Diversified Layout Dilutes Resources, R&D Investments Strain In addition to aesthetic medicine, Lepu Medical is also investing in structural heart disease, GLP-1 innovative drugs, brain-computer interfaces, and artificial intelligence across various emerging fields. Recently, Tencent's stake in its subsidiary Minwei Bio illustrates the company's commitment to innovation in pharmaceuticals.
However, the development cycle for innovative drugs is lengthy and risky, while investments in aesthetic medicine are substantial with slow returns. Each of these sectors requires continuous massive funding support. In 2024, Lepu Medical's R&D expenses were 1.249 billion yuan, an upper-middle level in the industry, but the resource allocation across multiple fields has led to insufficient investment in each direction. Amid tightening cash flows, the company has begun to scale back its generic drug business and optimize its workforce, diverting resources toward aesthetic medicine. This strategy of "cutting off limbs to survive" could jeopardize both core and new emerging business lines if returns from aesthetic medicine fall short of expectations.
Capital Operation Concerns: High Goodwill, High Receivables, and Cash Flow Pressure Lepu Medical is often referred to as the "M&A King," having completed 54 investments and acquisitions between 2008 and 2021, thus establishing the "Lepu System" platform. However, frequent mergers have led to high goodwill levels and the risks of asset impairment. As of the first half of 2025, the company’s cash holdings decreased to 3.6 billion yuan, while accounts receivable rose to 2.05 billion yuan, significantly exceeding industry warning thresholds.
Conclusion Lepu Medical's transformation journey reflects the common challenges faced by traditional medical device companies under collective procurement pressures. While the company seeks second growth curves through new sectors like aesthetic medicine and innovative drugs, it faces fierce market competition, high levels of goodwill and receivables, and a dilution of R&D resources. Balancing the stability of its core business while achieving breakthroughs in new ventures will be crucial for Lepu Medical's future development.
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