Open Source Securities: Maintaining a "Buy" rating for BEAUTYFARM MED (02373) Reshaping the beauty industry value with internal and external expansion.

Open Source Securities released a research report stating that BEAUTYFARM MED (02373) is firmly committed to the "internal + external" dual-drive strategy. A clear strategic path is expected to reshape the new value space of the beauty industry. The firm has raised its profit forecast, expecting the company's net profit attributable to shareholders in 2025-2027 to be 342/436/491 million yuan (previously 310/406/472 million yuan), with corresponding EPS of 1.36/1.73/1.95 yuan. The current stock price corresponds to a PE ratio of 18.0/14.1/12.5 times, maintaining a "buy" rating. Key points from Open Source Securities: The company issued a positive profit forecast, expecting net profit in 2025 to increase by no less than 34% year-on-year. The company issued performance forecasts: In 2025, it is expected to achieve revenue of no less than 3 billion yuan (up by 16% or more year-on-year), adjusted net profit of no less than 380 million yuan (up by 40% or more year-on-year); net profit of no less than 340 million yuan (up by 34% or more year-on-year). Strong performance growth demonstrates strong resilience and development potential through economic cycles. Opening up the development path of the "internal + external" dual-drive, high integration capacity drives scale expansion. (1) Accelerated external expansion: The company has acquired high-quality brands such as Bellicies and Nairier and successfully integrated them, gradually improving the "double beauty + double healthcare" business map. Among them, in the first half of 2025, Nairier's adjusted net profit margin surged from 6.5% before the acquisition to 10.4%, fully confirming the company's resource integration and operational empowerment capabilities. In addition, on October 15, 2025, Beautiful Garden strategically acquired Siyanli, consolidating its leading position with "three strong alliances", and the number of stores exceeded 734, covering 456 high-end businesses in first-tier and new first-tier cities. (2) Strong internal growth momentum: The company grasps the demand for "pleasure consumption" among women in top-tier cities, unleashing internal growth potential and driving same-store revenue growth. In addition, the company continuously upgrades its high-margin medical business capabilities, improves operational levels, and steadily increases overall net profit margins. The "super brand, super chain, super digital" strategy has been released, reshaping a new space for the beauty industry. (1) Super Brand: The company has completed the "three strong aggregation" pattern construction, differentiating competition through brand building, enhancing brand awareness and bargaining power, while creating the ultimate experience for consumers. (2) Super Chain: Overcoming the highly fragmented industry landscape through chains, the company will build a "1 billion revenue Club" from "1 to N" in 20 core cities in China, and strengthen independent control over the supply chain. (3) Super Digitalization: Beautiful Garden's precise push activities leverage less than 2% customer acquisition costs to achieve a retention rate of up to 80% for new members in the second year. The company will continue to promote the integration of smart technology and AI capabilities into product innovation. Risk Warning: Store integration effect is below expectations, store expansion is below expectations, medical accident risks.