Beautiful dreamer fills a niche

Serena Kong

Chinese biomedical beauty specialist Imeik Technology Development has filed for a secondary listing in Hong Kong, almost a year after its first attempt to list on the bourse.

Founded in 2004, the Beijing-based company mainly produces biomedical soft tissue repair materials such as facial fillers and facial implant threads.

Imeik made its debut on the growth enterprise market of the Shenzhen Stock Exchange in September 2020 and its shares have risen more than 200 percent since its listing.

Imeik's products are mainly aimed at repairing wrinkles and enhancing skin elasticity, and are used for both plastic and cosmetic surgery.

It is best known for its hyaluronic acid dermal fillers which are used mainly to revitalize the skin, as well as HA solutions and gels.

The company was the largest provider of HA dermal fillers in China with a market share of 39.2 percent by sales volume in 2021 and the second largest by value with a market share of 21.3 percent, according to a Frost & Sullivan report.

Imeik filed for a listing in Hong Kong last year and was planning to raise between US$2 billion (HK$15.6 billion) and US$3 billion.

However, the company let the application lapse amid tight supervision of the medical and aesthetic industry and a sluggish market which led to the slumping of beauty-related stocks and affected the listing of new shares.

China's medical aesthetic market offers great potential.

In terms of service revenue, the market was worth 189.1 billion yuan (HK$218.39 billion) in 2021 and is expected to reach 399.8 billion yuan in 2026 at a compound annual growth rate of 16.1 percent from 2021 to 2026 and 638.2 billion yuan in 2030 at a CAGR of 12.4 percent from 2026 to 2030.

Imeik's profit and revenue have continued to grow over the past four years mainly due to the substantial increase in sales of dermal fillers.

Net profit surged to 957.3 million yuan in 2021 from 116.0 million yuan in 2018 while revenue rose to 1.45 billion yuan from 321.0 million yuan over the same period.

The company, however, does face some risks. Imeik has a limited number of products such as injectable solutions and 72.3 percent of its revenue came from their sales last year.

Meanwhile, China has tightened its regulations over the medical aesthetic industry and this could adversely impact its business.

Last year, the National Health Commission unveiled a "Special Rectification Work Plan for Combating Illegal Medical Beauty Services" to crack down on illegal medical aesthetic institutions and services and enhance supervision over adverts about medical aesthetic services.

Imeik also faces competition from domestic and international rivals in different areas such as functionality, quality, safety and prices of products, brand recognition, and research and development.

Also, Imeik says intense competition has made it hard to expand its market share, pointing out that competitors may discover or develop competing or similar products that may materially and adversely affect its business.

Imeik will use the IPO proceeds for investment, acquisition and licensing, developing and expanding product pipelines in China, global layout and marketing, and brand-building.

Goldman Sachs, CICC, and JP Morgan Chase are joint sponsors for the listing.