Lancy Co., Ltd. Announces RMB 1.084 Billion Fundraising to Accelerate Medical Aesthetics Business Expansion

Aug 10, 2016 09:43 CST Updated 09:43

As a branch of the medical services sector, the medical aesthetics industry has benefited from national policies encouraging social capital to establish medical institutions. Over the past decade, medical aesthetics institutions founded by social capital have risen prominently, breaking the monopoly previously held by public hospitals in this field. This shift has enriched the resources available for medical aesthetics, with investment entities demonstrating a clear trend of “state retreat and private advance.”

There are currently nearly 4,000 plastic surgery institutions in China, including 500 plastic surgery departments in public hospitals, 500 chain medical aesthetic hospitals, and the remaining 3,000 small and medium-sized medical aesthetic clinics. Private institutions account for more than 85% of the market share in the medical aesthetics industry, making it the subsector with the highest rate of private participation in China’s healthcare services sector. The plastic surgery and medical aesthetics industry is a sunrise industry with substantial profit margins and significant market potential. The more market-oriented nature of private institutions will help them stand out in the competitive landscape.

Against this backdrop, on August 8, Lancy Co., Ltd. issued an announcement stating that it would raise RMB 1.084 billion to fund the construction of its medical aesthetic services network and the marketing network for the Acabon brand.

Plan for the Use of Proceeds from This Non-Public Offering

It is reported that the project plans a total investment of RMB 853.2181 million, including: RMB 396.1764 million for outlet renovation, RMB 234.6820 million for medical aesthetic equipment, RMB 26.6700 million for outlet leasing, RMB 148.5375 million for physician resources, RMB 40.3033 million for basic contingency reserves, and RMB 6.8490 million for initial working capital.

Amid the robust growth of the new business model driven by the “beauty economy,” Lancy Co., Ltd. focuses on meeting fashion-conscious women’s demands for aesthetic enhancement and deeply cultivates its medical aesthetics segment within the “pan-fashion industry interconnected ecosystem.” The company holds controlling interests in two major medical aesthetics brands, “Milan Baiyu” and “Jingfu Medical Aesthetics,” positioned respectively as a high-end comprehensive medical aesthetics brand and a chain brand specializing in “medical-grade rejuvenation.” Through careful evaluation of the medical aesthetics industry’s development prospects and in-depth research into companies operating within the sector, Lancy Co., Ltd. has pioneered a path toward synergistic integration and rapid expansion in the medical aesthetics industry.

Through this private placement, Langzi Shares intends to adopt a dual product positioning strategy centered on “high-quality comprehensive medical aesthetics solutions” and “medical-grade minimally invasive rejuvenation services.” Leveraging the operational experience of its six medical aesthetic institutions under the Milan Baiyu and Jingfu Medical Aesthetics brands, the company will pursue a business expansion strategy that combines “regional brand consolidation” with “nationwide chain operations,” establishing a medical aesthetics service network in key cities where its women’s apparel customer base is heavily concentrated.

Lancy Group’s Medical Aesthetics “Assembly Call”

According to VCBeat (WeChat Official Account: vcbeat), Lancy Co., Ltd., leveraging its historical ties and frequent interactions with South Korea’s fashion industry, began collaborating in 2015 with Dream Group, a renowned South Korean medical aesthetics enterprise founded by technical elites in the country’s medical aesthetics sector. In April 2016, Lancy made a strategic investment in Dream Group, thereby formally entering the medical aesthetics industry. This move established a robust resource-matching platform and cooperative foundation for Lancy’s subsequent mergers, acquisitions, and synergistic integration within China’s medical aesthetics sector.

In June 2016, Lancy Co., Ltd. acquired controlling stakes in two premium domestic medical aesthetics brands, “Milan Baiyu” and “Jingfu Medical Aesthetics,” along with their six affiliated medical aesthetic institutions, officially kicking off Lancy’s integration and expansion into China’s medical aesthetics industry.

Milan Boyu is positioned as a premium, comprehensive medical aesthetics brand. It manages and operates its medical institutions in accordance with JCI standards (the globally recognized highest standard for healthcare services), delivering high-quality medical aesthetic solutions and differentiated value experiences.

Jingfu Medical Aesthetics is positioned as a chain brand specializing in “medical-grade rejuvenation,” with a focus on laser-based and minimally invasive cosmetic procedures. It has successfully entered the markets of Chengdu, Xi’an, Changsha, and Chongqing, establishing a standardized system encompassing products, services, operations, and talent development, thereby securing a strong competitive advantage in the cutting-edge niche market of “medical-grade rejuvenation.”

By holding controlling stakes in six Chinese medical aesthetic institutions and making strategic investments in a benchmark South Korean medical aesthetics enterprise, Langzi Shares will facilitate multi-regional, multi-level linkage and synergy between the medical aesthetics industries of China and South Korea, thereby achieving the accumulation of core resources and competitiveness in advanced medical aesthetic technologies, premium medical aesthetic brands, and standardized operational capabilities.

Lancy Co., Ltd.'s Medical Aesthetics "Moat"

This investment represents a significant step by Langzi Shares to deepen its presence in the medical aesthetics sector, following its strategic investment in Dream Group, a benchmark South Korean medical aesthetics enterprise, and its controlling stakes in two high-quality domestic medical aesthetics brands, “Milan Baiyu” and “Jingfu Medical Aesthetics.” It is an objective requirement of Langzi Shares’ dual-wheel development model driven by both “external expansion” and “internal growth,” as well as a key step in building a multi-dimensional medical aesthetics service brand system that meets the multi-level needs of consumers across various regions.

Building on this foundation, Lancy Co., Ltd. intends to leverage this private placement to further integrate its medical aesthetics business with capital markets. The company aims to consolidate core resources and capabilities, including South Korea’s advanced plastic surgery and cosmetic technologies, premium domestic medical aesthetic brands, and standardized service systems. By strategically intertwining technical accumulation and upgrades, brand penetration into lower-tier markets, and standardized large-scale expansion, Lancy seeks to establish a first-mover advantage and build competitive barriers within the medical aesthetics industry.