China hair transplant business files for Hong Kong IPO

The company claims to be the largest hair transplant player in China with 51 clinics across 50 cities. More than half of these opened after CPE invested in 2017. The private equity firm also supported business expansion, such as the acquisitions of UK-based hair restoration specialist Svenson in 2017 and the Hong Kong operation of NuHart Hair earlier this year.

Yonghe has positioned itself as a one-stop hair-related healthcare services provider, offering hair transplants as well as laser treatment and light therapy, scalp cleaning and conditioning, wigs and haircare products, and nutrition and haircare advice. The company employs 229 registered physicians and 930 nurses, more than its next two largest competitors combined.

China’s hair-related healthcare service market was worth RMB18.4 billion ($2.9 billion) in 2020, with RMB13.4 billion coming from hair transplants and the rest from non-surgical treatments. Frost & Sullivan projects the market will hit RMB138.1 billion by 2030, with transplants and non-surgical treatments contributing RMB75.6 billion and RMB62.5 billion, respectively. Last year, approximately 250 million people in the country suffered from alopecia.

Yonghe generated RMB1.64 billion in revenue in 2020, up from RMB1.22 billion a year earlier. Transplants are the prime moneymaker but the medical haircare services share has risen to 13% from zero in 2018. The company’s net profit grew more than fourfold over the course of 2020 to reach RMB163.3 million, according to the prospectus.

The size and pricing of the IPO have yet to be set. CPE holds a 21.59% stake while Yu Zhang, who founded the company in 2005 and remains its CEO, has 42.66%. His brother owns 5.64%.

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• Topics
• Greater China
• Healthcare
• IPO
• China
• Citic Private Equity