CITIC Securities released a research report stating that BEAUTYFARM MED's (02373) acquisition of Si Yan Li will solidify its position in the mid-to-high-end beauty and wellness services sector. The brokerage expects further optimization of the company's business model through organic growth and expansion strategies. Excluding Si Yan Li's consolidation for now, CITIC sees room for efficiency improvements in the current integration process. It has updated its 2025-2027 net profit forecasts to RMB 372 million, RMB 409 million, and RMB 486 million, respectively, with corresponding P/E ratios of 18x, 17x, and 14x. The firm maintains an "Overweight" rating.

On October 15, BEAUTYFARM MED announced it would acquire 100% of Si Yan Li, China's third-largest beauty service brand, for RMB 1.25 billion. Additionally, on November 4, the company pledged to distribute annual dividends of no less than 50% of attributable net profit or continue share buybacks over the next three fiscal years under normal circumstances.

With 2024 revenue of RMB 849 million, Si Yan Li operates 163 beauty salons (including 118 directly owned and 45 franchised stores) across 48 cities in China, along with 19 medical aesthetic clinics as of H1 2025. It boasts approximately 60,000 active members. Post-acquisition, BEAUTYFARM MED will consolidate China's top three beauty service brands and secure 42% of high-end commercial properties in Tier 1 and Tier 2 cities, enhancing overall competitiveness and synergies.

In 2024, Si Yan Li reported a net profit of RMB 81 million. Following BEAUTYFARM MED's acquisition of Nareal, its profit margin improved from 6.5% in 2023 to 10.4% in H1 2025 under a dual-business model. Si Yan Li is expected to achieve similar margin enhancements post-integration. The deal values Si Yan Li at RMB 1.25 billion, representing a TTM P/E of about 17x—below the listed company's valuation—and will be settled via cash and share issuance.

The report highlights BEAUTYFARM MED's commitment to long-term shareholder returns. The company has actively repurchased shares to support its secondary market price, buying back 605,500 shares (with authorization for up to 23.58 million shares). Its three-year dividend payout ratio of at least 50% aims to boost long-term investment appeal.