On March 31, Hong Kong-listed hair transplant leader YONGHE MEDICAL (02279.HK) released its 2025 performance, successfully turning a profit for the year, with significant improvements in gross margin, cash flow, and other indicators, and declared a dividend.

Specifically, during the reporting period, YONGHE MEDICAL achieved operating revenue of 1.808 billion yuan (RMB, the same below), a slight increase of 0.2% year-on-year; gross profit was 1.194 billion yuan, a year-on-year increase of 10.1%, with the gross margin rising to 66.0%, an increase of 5.9 percentage points compared to the previous year.

The most remarkable aspect is the profit reversal: in 2024, the company recorded a net loss of 227 million yuan, while in 2025, it achieved a net profit of 73.56 million yuan; in 2025, EBITDA surged by 157.9% year-on-year to 364 million yuan, with a net operating cash flow of 496 million yuan, significantly enhancing financial resilience.

The core of the performance reversal comes from refined operations and intelligent cost reduction. During the reporting period, YONGHE MEDICAL reduced inefficient stores and increased the proportion of mature clinics, with precise marketing investments leading to a 12.2% decrease in patient acquisition costs and a significant improvement in the input-output ratio of 22.6%. Meanwhile, the company's hair transplant business grew steadily, with the number of people served increasing by 19.7% year-on-year to 71,400; additionally, female aesthetic hair transplant has become a new growth curve, with the company establishing dedicated departments in multiple cities during the reporting period, and the proportion of female clientele continued to rise.

It is worth noting that YONGHE MEDICAL still faces growth concerns: the revenue growth rate for the entire year of 2025 is relatively low, with revenue from medical maintenance services declining by 8.2% year-on-year, and the per capita consumption amount slightly decreasing. As of the end of last year, the total number of company stores was reduced to 70, indicating that the scale expansion is currently in an adjustment period. Intensified industry competition and high customer acquisition costs remain long-term challenges.

In addition to the performance announcement, the company's board of directors proposed a final dividend of 0.076 yuan per share, totaling approximately 40 million yuan, and the positive dividend policy signals sustainable profitability, boosting market sentiment.

Driven by related positive factors, as of April 1, YONGHE MEDICAL's stock price surged by 14.77% to 2.02 HKD per share, with a market capitalization of 1.061 billion HKD. The company's stock price had previously been sluggish for a long time and may now be entering a valuation recovery window.

Some institutions believe that YONGHE MEDICAL has completed the transition from "loss recovery" to "profit realization," and future growth will depend on the expansion of the female business, recovery of maintenance services, and the progress of AI digital implementation