Under the state's policy of encouraging the birth of three children, capital began to increase the layout of the confinement center industry

Under the state's policy of encouraging the birth of three children, capital began to increase the layout
of the confinement center industry.

A few days ago, the Yuezi Center Aidi Palace (00286.
HK) announced that it has entered into a subscription agreement with the subscriber, Zhuhai Deyou Bohui Enterprise Management Consulting Center (Limited Partnership), to issue convertible preferred shares with a total size of approximately 225 million, equivalent to the subscription price of HK$0.
5 per Class A convertible preferred share and HK$0.
7 per Class B convertible preferred stock
.

It is worth noting that Zhuhai Deyou Bohui Enterprise Management Consulting Center (Limited Partnership), the general partner of Zhuhai Hillhouse Deyou Investment Management Co.
, Ltd.
, and its legal representative is the chief operating officer
of Hillhouse Group.

In the past two years, capital has increased its investment in
the confinement center industry.
Last year, Beacon International received 200 million yuan of financing led by Tencent and co-invested by Gaorong Capital, refreshing the single financing record
of the domestic maternal and child care industry.

As an experience + functional consumption, the confinement center has a high degree of acceptance among the new generation of mothers
.
Even though the price is high, the high-end environment, the concept of "scientific confinement" and the so-called professional nursing services make many families pay
for it.
However, due to the low threshold and difficult management, the market is still in a barbaric growth period, and many confinement centers have continued to have negative evaluations, and in addition, the loss of confinement centers has become the norm in the
industry.
So, is the confinement center really a good business?

Dismantle the confinement center jianghu

With the improvement of the economic level, the gradual change of the concept of gestation, and the demand of the new generation of production forces for postpartum recovery, the Yuezi Center began to develop in China
.
Confinement Center provides services
such as life care, postpartum body contouring, health knowledge training and other maternal and child health care for women and babies who have just given birth.

"My mom and friends around me have chosen the Confinement Center
.
" Mao Lin (pseudonym), a pregnant mother from Shenzhen, told the 21st Century Business Herald reporter that everyone is giving birth to a child for the first time, and many things are not known
.
In the confinement center, not only the children can be professionally cared for, but the mother herself can also be carefully taken care of
.

Search for "confinement center" on various social platforms, and well-equipped rooms, a variety of meals, proper postpartum care and a wealth of entertainment activities have become almost standard in
confinement centers.

Behind such a rich and exquisite service, it is supported
by sky-high prices.
According to Ai Media Consulting data, among the 11 popular cities in China, the highest per capita consumption of Yuezi Center is Shanghai, with an average price of more than 120,000 yuan; Beijing, Shenzhen and Hangzhou followed; The Yuezi Center, with the lowest average price per capita consumption, is located in Xi'an, at 33673.
0 yuan
.

The 21st Century Business Herald reporter sorted out the quotations on the official website of the popular confinement center in Beijing and found that with the 28-day cycle as the standard, the median price of the confinement center package is more than
100,000 or 200,000.

The high unit price of customers has also brought a huge market to the
industry.
Data show that in 2020, the market size of China's Yuezi Center industry is 12.
62 billion yuan
.
However, in terms of the number of consumers, the penetration rate of the industry is only about 2.
2%, and it is mainly concentrated in large cities
such as Beijing, Shanghai, Guangzhou, and Shenzhen.
Specifically, new first-tier cities accounted for 23.
9%, first-tier cities accounted for 22.
8%, and second-tier cities accounted for 24.
4%.

Guoyuan Securities predicts that with the further improvement of the domestic economic level, the market space of the Yuezi Center industry is still huge, with 11 times and 8 times the growth space
in the national and first-tier markets respectively.

At present, the concentration of the domestic confinement center industry is relatively scattered, and the company is fiercely competitive
.
According to the revenue calculation in 2018, Aidi Palace, Weige, Baosheng, Xinyuehui and San Bella ranked in the top five, with an overall market share of only 11.
3%.

The market share of Aidi Palace, which ranks first, is only 4.
3%.

The industry has a huge imagination space, and many capitals have begun to card slots in advance to seize market opportunities
.

Just last month, ByteDance spent 10 billion yuan to achieve a wholly-owned stake in one of China's largest private hospital companies, the United States, China Yihe, which is understood to have five confinement centers "Xiyue Pavilion", covering the three major regions
of Beijing-Tianjin-Hebei, Yangtze River Delta and Pearl River Delta.

In March this year, the mother and child care center brand San Bella completed the C+ round of financing, which was exclusively invested
by Chinese Life.

Is it a good business?

The data shows that from 2014 to 2018, China's confinement centers expanded rapidly, and the number of confinement centers exceeded 4,000 in 2018, which was 7 times
higher than in 2013.
In terms of financing amount, from 2016 to May 2020, there were 125 investment and financing events in domestic confinement centers, with a total amount of 4.
592 billion yuan
.

With the constant addition of new players, the Confinement Center seems to be an excellent deal
.
However, it is not as glamorous as it seems
.

At the 2020 "China Mother and Baby Frontier Conference", Tu Junyin, the founder of the Yiyuezi Center, said bluntly that 95% of the domestic confinement centers are in a state
of loss.

It is understood that more than 50% of the confinement centers fail every year, and less than 40%
of the enterprises that have been operating for more than 3 years are closed.
Damei Shares, Xijia and Fuza Mother and Baby, which were listed on the New Third Board, have all been delisted, and the net profit margin in 2016-2019 is basically negative
.
The only surviving Xixi mother and baby, 2019-2021 operating income fell sharply, net profit for three consecutive years, especially in 2019 net profit fell by about 6.
5% year-on-year, and now it is also in ST state
.

As the only listed company on the main board in the industry, from the recent performance, the pressure on Aidi Palace is also more obvious
.
In the first half of this year, dragged down by the epidemic and newly opened stores, the company achieved revenue of HK$329 million, an increase of 1.
5% year-on-year; Gross profit was HK$0.
55 billion, compared to HK$128 million in the same period last year, down 57%
year-on-year.

The high cost of investment compresses the profit margin
.
At present, the Aidigong confinement package ranges from 60,000 yuan to 380,000 yuan
.
According to Shengang Securities estimates, the single bed cost of Aidi Palace exceeds 500,000 yuan, and it also faces problems such as
long preparation period for opening and long investment recovery period.

In addition, due to the special customer group of the confinement center, the fault tolerance rate in this field is low
.
"If there is a customer lawsuit to settle the claim, this order may still lose money
.
" An industry insider sighed, "The confinement industry is an industry that needs word of mouth very much, and for each confinement center, three years is a hurdle
.
" ”

In addition to the above difficulties, the confinement center is also constantly falling into a crisis of
trust.

A Bao Mom posted on social platforms that the confinement meals she stayed in were not so scientific, and some of them were even fast foods, and the property and health projects were mostly for the purpose of luring cards
.
Previously, some popular science bloggers have pointed out that the confinement center is "pseudo-demand", and most of the services and consumption derived from confinement are untenable
.

At the same time, due to the low market threshold, chaos in the Yuezi center industry is not uncommon
.
In 2020, during the process of feeding the baby to the baby in the process of feeding the baby, the baby suddenly choked and stopped breathing, and went to many hospitals to rescue her
.
In February 2021, 14 newborns from a confinement center in Shenyang were diagnosed with pneumonia and sent to the ICU for treatment
.
Parents said that they did not get the first notice of the confinement center, so they missed the best treatment time
.

What is the way forward?

In the future, with the improvement of residents' living standards and the improvement of health needs, some families have sufficient consumption power
in the confinement-related consumption areas.
According to Frost & Sullivan, in 2025, the domestic confinement center market size is expected to be close to 30 billion yuan
.

But the industry also faces headwinds
from declining births and low-frequency consumption.
In this regard, Yuezi Center is constantly expanding its business scope to meet the needs of
consumers.

"The older generation will tell or even force you to do what you should do according to
their traditional habits.
" Mao Lin explained to the 21st Century Business Herald reporter that in the confinement center, parents can not only eat and sleep well, but also do not need to go around the baby all the time, and postpartum rehabilitation is the most attractive to
her.

In order to do a good job in postpartum rehabilitation, Weige Confinement Center provides personalized nursing services
for postpartum mothers based on TCM physical fitness identification.

The factor of "market sinking" is also included in
the consideration of enterprises.
It is understood that Beacon also created another extended brand of San Bella, Baby BELLA, with the ultimate cost-effective integration of the mid-range service market
with a unit price of more than 50,000 yuan.

Its peer Aidi Palace chose to focus on asset-light operations and store expansion to seize market opportunities
.

Zhu Yufei, CEO of Aidi Palace, mentioned in the exchange meeting in July last year that it will continue to expand the number of stores that have entered the city, expand the market share, and expand the "battlefield"
in the new first-tier cities.
Zhu Yufei introduced that the goal of Aidi Palace is to reach 3,500 rooms in the institution by 2025
.

Previously, the "independent decoration mode" was the main model
adopted by the Yuezi Center opened by the Aidi Palace.
Under this model, the scale of capital investment is large and the expansion cycle is long
.
Peer San Bella has always chosen to cooperate with high-end hotels to achieve relatively rapid expansion, since its establishment in 2017, Santa Bella has opened 9 stores in China
.
In contrast, before 2021, Aidi Palace has only landed 5 new stores
in the past decade or so.

From April 2021, Aidi Palace has adopted an asset-light expansion model, that is, the opening of a confinement center
through renovated properties such as leased five-star hotels and serviced apartments.
Under this expansion strategy, Aidi Palace not only shortened the preparation period of the Crescent Center from 6 months to 2 months, but also reduced the investment cost by about 67%.

Zhang Weiquan, executive director of Aidi Palace, said that the advantages of independent store opening under the asset-light model are obvious, including: store opening speed, overhead, future management, etc
.
However, Aidi Palace does not reject excellent M&A opportunities, and is also looking for high-quality M&A targets in the
same period.

Taking the first asset-light confinement center of Aidi Palace as an example, the opening time of the center is 41 days, which is about four months
shorter than before.
The investment amount is only 15 million yuan, which is more than 70%
lower than the same scale.
In addition, in the sixth month of opening, Qiao Cheng Yuan has completed the monthly profit target, and as of July this year, it has achieved continuous profitability
for eleven consecutive months.
According to statistics, in less than a year and a half, the company quickly opened 4 branches (asset-light confinement center
).

It is worth noting that in recent years, the profit level of the industry has been declining
.
According to the statistics of Debon Research Institute, from 2015 to 2018, the total profit of domestic confinement centers increased from 1.
6 billion yuan to 3.
9 billion yuan; From 2015 to 2018, the market size of the industry rose from 3.
4 billion yuan to 14.
2 billion yuan.

This also means that the industry's profit level in 2015 was as high as 47%, but in 2018, this value has slipped to about 27%.

From the current point of view, this "fertile land" has begun to stage a "hand-to-hand battle": a large number of inter-pedestrians have poured in, the market has been expanding, and the industry's profits have been declining
.
The challenges are the same, and the future still needs to be tested
by the market.