After years of strategic adjustments, YONGHE MEDICAL, the &#34;first hair transplant stock&#34; in China, has ushered in a turnaround in its financial performance.
According to the latest earnings announcement, the group recorded a total revenue of RMB 1.808 billion in 2025, a slight year-on-year increase of 0.2%. The profit side saw a significant rebound, turning from a loss in the same period last year to a profit of RMB 74 million.
The turnaround in profitability was mainly due to a shift in operational logic.
YONGHE MEDICAL's development focus has shifted from simply pursuing the number of clinics and network coverage to deeply cultivating single-store profitability. By concentrating resources on more profitable mature stores, the group's gross profit margin increased from 60.1% in the previous year to 66.0%.
On the cost side, YONGHE MEDICAL no longer blindly believes in spending money to gain volume. Marketing has shifted from being primarily search-driven to more precisely acquiring customers with clear needs, resulting in a 10.7% year-on-year decrease in sales and marketing expenses.
The efficiency of clinic patient reception is also undergoing a qualitative change. By establishing user profiles and standardizing the reception process, the company has reduced its reliance on sales personnel's individual experience of &#34;reading expressions and observing behavior&#34; to close deals.
During the reporting period, YONGHE reduced the cost of attracting a single customer to the clinic by 12.2% and improved the return on investment by 22.6%.
In 2025, the number of hair transplant surgeries performed by YONGHE MEDICAL consumers increased by 19.7% year-on-year to 71,380, a record high.
However, the company is no longer satisfied with telling just a &#34;hair planting&#34; story.
In the past, the typical consumer profile for hair transplantation was male financiers analyzing the market in Lujiazui or programmers coding late into the night in Xierqi; now, concerns about hair volume are rapidly breaking out of their niche and appearing among all sorts of ordinary people.
For those experiencing hair loss today, surgery is no longer the only option, but one of many solutions. Following this trend, YONGHE's business has naturally extended to broader hair management: integrating hair transplantation, medical-grade scalp maintenance and fixation, daily care, and related services to form a brand matrix covering the entire cycle.
Zhang Yu, founder and CEO of YONGHE MEDICAL, told Wallstreetcn · All-Weather Technology that in the next three to five years, the proportion of surgical revenue will decrease, but the absolute amount will still grow. &#34;I believe in about five years, YONGHE's revenue will be 50% surgery and 50% non-surgery, which is an inevitable trend.&#34;
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In Zhang Yu's view, the evolution of customer base and business ultimately returns to the fundamental capabilities of medical services. He believes that hair management is a complex interplay between medical treatment and service, with technology, service, and efficiency as the core output.
In recent years, YONGHE has undergone a series of institutional reforms, from &#34;de-selling,&#34; doctor grading to business module reshaping. After improving the operational efficiency of its domestic business, the standardized management system also leaves considerable room for imagination for international expansion.
All-Weather Technology recently had a conversation with Zhang Yu, founder and CEO of YONGHE MEDICAL. The following is a (condensed) transcript of the dialogue:
All-Weather Technology: Looking at this period's financial report, the sales expense ratio has significantly decreased. What are the adjustment measures behind this?
Zhang Yu: The decrease in expenses appears to be a financial data point on the surface, but behind it are market changes and strategic adjustments by the company. In the past, the hair transplant industry had low awareness and relied on high marketing investment. Now, two major changes have occurred: first, consumer awareness has improved, with hair loss treatment showing a trend towards younger demographics and earlier intervention; second, YONGHE has improved efficiency through systematic reforms and informatization adjustments.
As treatment becomes more proactive, the treatment methods are also becoming more diverse and precise. In the past, people would &#34;only consider treatment when they've lost all their hair&#34;; now, hair loss patients become anxious as soon as they start losing hair and opt for various methods like medication, maintenance, and laser therapy. Once the market shifts in this way, the sales expense ratio will inevitably decline; this is simply a cyclical issue.
All-Weather Technology: What measures has YONGHE taken to cater to these increasingly diverse demands?
Zhang Yu: We have made two major adjustments.
First, the strategy has shifted from &#34;hair transplantation&#34; to &#34;hair management.&#34; Hair transplantation is only one method of treating hair loss; less than half of people with hair loss choose surgery due to high prices and concerns. Hair management covers a broader scope, including oily scalp, dandruff, folliculitis, and even turning gray hair black. Therefore, YONGHE has moved from a &#34;point&#34; to a &#34;surface.&#34;
Second, the biggest problem in the industry in the past was &#34;knowing how to treat but not how to diagnose,&#34; lacking a diagnostic and treatment system – those selling hair transplants say it's the best, those selling medication say it's the best, and those using lasers say it's the best, leading to chaos. We are promoting &#34;de-selling&#34;; doctors provide front-line diagnosis and treatment. Hair loss is categorized by different causes and stages (active shedding phase, stable phase), and doctors must provide targeted solutions.
We are also doing &#34;de-packaging&#34;: the technical threshold for hair transplantation lies not in fancy names but in the doctor's clinical experience. We differentiate between general, expert, and special appointments like public hospitals do. We have been undergoing self-transformation for several years.
All-Weather Technology: What stage is this transformation currently in?
Zhang Yu: If we score out of 100, I think we have just passed the passing grade. Because transformation is very painful for enterprises, especially leading ones. In the market, everyone is doing packaging; if you don't, consumers can't easily distinguish between true and false for a while – this requires market education and time. But we are building long-term trust in the brand.
The framework for doctor grading has been established; the next step is to refine it. Resources are abundant in Beijing, Shanghai, Guangzhou, and Shenzhen, but insufficient in third- and fourth-tier cities. Therefore, we propose &#34;good doctors are nearby,&#34; utilizing the policy of multi-site practice to allow Beijing experts to serve other cities. At the same time, we are delving into segmented needs; for example, demand for hairline correction for women has grown rapidly in the past two years, so we have begun to specifically train doctors who focus on female patients, making them more specialized in aesthetics and professionalism.
Regarding diagnosis and treatment: whether hair loss should be treated and how it should be treated, diagnosis and treatment are core. In the past, it was basically based on the doctor's intuition and clinical experience. Now, YONGHE is establishing a verifiable diagnostic and treatment system: collaborating with Sun Yat-sen University for hair gene testing, co-building a standardized diagnostic and treatment model with Peking University People's Hospital, and using AI for auxiliary treatment. These are all in the early stages of deployment, and there is still much work to be done.
All-Weather Technology: What are your recent observations of overseas markets, and what are the commonalities or differences in hair markets in various countries?
Zhang Yu: I recently visited South Korea and Japan, and the United States a few days ago. Many friends ask me about the international market, its characteristics, and commonalities. To be honest, there are really not many commonalities.
Japanese men live very refined lives, but hair transplantation is not popular; instead, wigs are very common, with most people owning one or two, which is likely related to their national conditions.
I used to see &#34;Turkey tourist hair transplants&#34; popular online. Last year, I spent 8 days there specifically and was very surprised. The capital of Turkey has six to seven hundred hair transplant institutions, and 95% of the surgeries are performed on foreigners from around the world, with patients from the United States, the United Kingdom, and France flying specifically to have hair transplants.
Why do people go to Turkey? First, the government is very supportive, promoting medical tourism as an industry; second, convenient transportation hub; third, extreme cost-effectiveness. The charges are similar to China, around $3,000, about 20,000 RMB. But it has a characteristic: although there are many institutions, few are large-scale. Unlike China's chain brands, most are single-store operations in Turkey, mainly private clinics.
South Korea does things very meticulously: some institutions only accept female hair transplant patients, while others specialize in eyebrows. There are very few hair transplant institutions in the United States because the average cost is $10,000-$20,000, which is too high.
The hair transplant markets in countries like the United States and Japan are not well-developed. The fundamental reason is the high labor costs. Hair transplantation relies on manual labor, and surgery is learned through practice, but with high labor costs, it is difficult for doctors to calmly spend 6 hours on a surgery, and most are not full-time; full-time doctors are rare. Therefore, in the final analysis, the main factors determining whether a country's hair market can develop are two: labor costs and population base.
All-Weather Technology: What insights have you gained from these observations?
Zhang Yu: China's hair transplant technology leads by a wide margin globally because we have such a large volume of surgeries and sufficient experience accumulation. China's chain systems and standardization capabilities are very competitive internationally. Look at Turkey; there are few chains, mostly single-brand operations, rarely opening a second one; in China, companies like ours with sixty or seventy or thirty to forty clinics are everywhere.
YONGHE's internationalization will proceed in two steps. The first step is &#34;bringing in,&#34; attracting overseas patients to China. Last year, over 3% of our revenue came from overseas, and this proportion will increase this year. YONGHE's advertisements have already gone out, visible on Facebook and YouTube.
The second step is &#34;going out,&#34; packaging and exporting our diagnostic and treatment systems, standardized processes, and even future hair transplant robots, which is the key. Recently, we have also been discussing cooperation in Turkey, Bangkok, and South Korea to see how we can empower local brands with our systems.
All-Weather Technology: How did the relative advantage of hair transplant technology in China come about?
Zhang Yu: The Chinese market is highly competitive and very &#34;intense.&#34; Each company continuously optimizes itself through competition, moving from pursuing function to emphasizing aesthetics, and now to emotional value and service details. In contrast, doctors in Turkey or other countries often hold traditional views: I am the doctor, you are the patient, just listen to me, as long as it's cured.
China's technological advantage stems primarily from the huge volume of surgeries; we have too much experience. Taking YONGHE as an example, we have over 200 surgical doctors performing more than 70,000 surgeries a year, averaging at least 350 surgeries per person annually. Five years of this means over a thousand surgeries.
Foreign doctors, on the other hand? They absolutely do not work on Saturdays and may only schedule one surgery a day, requiring appointments six months in advance – the experience accumulation is simply not on the same level. Therefore, China's technology is second to none in terms of operational skill, aesthetic ability, surgical speed, and completion quality.
All-Weather Technology: If you want to accelerate globalization, would YONGHE consider mergers and acquisitions?
Zhang Yu: We have been trying, but we mainly face legal and regulatory issues. After visiting Turkey last year, we consulted local law firms and received a report of over 100 pages last week. The results were astonishing: about 50% of the hair transplant institutions there do not have licenses.
In China, one doctor is allocated one operating room. However, in Turkey, one doctor can be allocated five operating rooms, operated by assistants, with the doctor only supervising. This greatly increases the doctor's &#34;production capacity.&#34;
YONGHE's &#34;going out&#34; leans more towards a light-asset model, not renting and renovating spaces locally and marketing, which is costly and risky. We prefer to cooperate with existing local institutions, exporting training, management, and diagnostic and treatment systems.
Of course, we would consider acquiring good targets. Last year at the Dubai Expo, the Dubai government invited us, stating they had existing hospitals and doctors and only lacked our system, saying &#34;we don't want our local patients to go abroad, we want them to stay local.&#34; We are looking for such opportunities.
All-Weather Technology: Don't people in the Middle East wear headscarves? Do they need hair transplants too?
Zhang Yu: I thought so too, but upon visiting, I discovered that people there have a &#34;faith&#34; in their hair. I took photos at the airport in Turkey; the streets were full of people who had just had hair transplants and were still bald. So, this perception needs to be shattered.
All-Weather Technology: What proportion of the company's total revenue do you hope will come from overseas in the future?
Zhang Yu: Last year, overseas revenue accounted for about 3%–4%; this year, we expect it to exceed 5%–6%. This is growth from &#34;bringing in.&#34;
Looking ten years ahead, YONGHE's main base will still be China. The Chinese market is too large, with a population of 1.3 billion. The core driver of demand for hair transplantation is the population base. In the next 5 to 10 years, 60%–70% of revenue from hair transplantation will still come from China.
However, YONGHE is now transitioning from &#34;hair transplantation&#34; to &#34;hair management,&#34; a significant strategic shift. We have proposed a &#34;One Core, Two Wings&#34; layout around this direction: the core is primarily YONGHE Hair Transplant, focusing on diagnosis, treatment, and fallback treatments.
Of the two wings, the left wing is Svenson, which we previously positioned as a maintenance brand, but now it has been upgraded to a biotechnology company, focusing on To B and To C products. The right wing is the product end. Svenson itself is a British brand with a 70-year history, with presence in the UK, mainland China, Hong Kong, Taiwan, Singapore, and other regions.
Concurrently, we are promoting the &#34;1+N&#34; model offline: one surgical center, complemented by N small comprehensive clinics. Small clinics do not perform surgery but only diagnosis and non-surgical treatments. Product-wise, this includes Svenson's functional hair care products, etc.
Therefore, in the future, YONGHE's international revenue will not be primarily from overseas surgical services, but the product segment is more likely to go global.
All-Weather Technology: What experience can YONGHE's overseas exploration accumulate for Chinese medical service companies going global?
Zhang Yu: In the past, international perceptions of mainland Chinese medical technology indeed had biases, but this is rapidly changing.
For example: five years ago, when we acquired a Hong Kong institution, Hong Kong doctors felt that mainland technology was inferior to theirs and were only willing to act as consultants. Later, after they came to the mainland and saw our surgical volume and results, coupled with a large number of Hong Kong patients going to Shenzhen for surgery, they now wish for us to acquire them instead.
Regarding international hair societies, the annual meetings were primarily held in the US in the past, and Chinese companies were not given much attention. Now, China is applying to host the 2030 annual meeting. The president of the Asian Hair Society is Thai; they used to question Chinese technology, thinking our 3,000-unit procedures were too aggressive and unreliable. Now they come specifically to learn, asking if we are putting on a show – in reality, it's common everywhere in China, no need for a show.
Hair transplantation going abroad has a natural advantage: it is easy to standardize. The surgery is relatively straightforward, not as complex as other diseases. Before going global, we thought it would be difficult, but after doing it, we found it simpler than expected.
Therefore, I believe that with the diligence and wisdom of the Chinese people, it is not that difficult for medical service companies to go global.

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- After years of strategic adjustments, China's first publicly listed hair transplant company, YONGHE Medical, has achieved a turnaround in financial performance.  
- In 2025, the group reported total revenue of 1.808 billion RMB, a slight increase of 0.2% year-on-year, with profit rebounding to 74 million RMB from a previous loss.  
- The company's focus has shifted from expanding store numbers to enhancing profitability at established outlets, resulting in a significant rise in gross margin and a reduction in marketing costs.

Wallstreetcn

YONGHE MEDICAL

Interview with YONGHE MEDICAL Founder Zhang Yu: China's Hair Transplant Technology Leads by a Wide Margin, but YONGHE's Next Growth Point is Not on the Operating Table