The strictest regulation in history! The high-growth bubble in the medical beauty industry has burst.

Ask AI · What are the deep-rooted reasons behind AimeiKe’s performance decline?

Text | Hengxin

Source | Bowang Finance

Once regarded as a “perfect track for crossing cycles,” the medical beauty industry faced an unprecedented complex situation in 2026.

In the past few years, the “appearance economy” has ushered in a golden age for the medical aesthetics industry. With gross profit margins often exceeding 90%, continuous cash flow, and extremely high user stickiness, the medical beauty track has become a darling in the capital markets.

However, by 2026, with changes in the macroeconomic environment and the underlying restructuring of regulatory logic, the industry is experiencing intense pain as it transitions from “barbaric growth” to “high-quality development.”

Since the beginning of 2026, multiple departments—from the National Health Commission, State Taxation Administration, to the National Medical Products Administration—have shown systematic and refined efforts to regulate the medical aesthetics industry. Meanwhile, the declining performance of leading companies signals that the previous “heavy marketing, light medical care” expansion model has come to an end.

In this life-and-death reshuffle, compliance has become the baseline, while solid R&D capabilities and innovative supply chains have become the only remaining competitive moat for companies.

01

Policy reshapes business logic, compliance costs burst the “high growth”** bubble**

If the past medical aesthetics industry was running wildly in the gray area, 2026 is undoubtedly the year when regulatory swords are fully implemented, reshaping the industry’s game rules.

The policy shift is no longer just a simple “warning,” but directly impacts companies’ profit and loss statements and balance sheets, fundamentally changing the business logic of medical aesthetic institutions.

The first to be affected is the thorough crackdown on tax incentives.

For a long time, many profit-driven medical aesthetic institutions cleverly exploited the policy loophole of “medical institutions providing medical services exempt from VAT” for tax planning. However, with the full implementation of VAT and related regulations in 2026, this loophole was decisively closed.

The new regulations explicitly state that medical institutions enjoying VAT exemption for medical services do not include profit-oriented cosmetic medical institutions. This means that from 2026 onward, all profit-driven medical aesthetic institutions must honestly pay the corresponding VAT.

For small and medium-sized clinics already operating on thin margins, this sudden tightening of policies is like pulling the rug out from under them, directly erasing their already limited profit margins.

Meanwhile, exposure of tax evasion cases has further heightened industry alarm.

On April 29, 2026, the State Taxation Administration publicly disclosed six cases of tax evasion in the medical beauty industry. The involved companies mainly concealed sales income through private accounts and underreported revenue, with some abusing the aforementioned tax exemption policies to illegally declare taxable sales as tax-free items.

The concentrated disclosure of these cases sends a very strong signal: tax authorities’ “penetrative” supervision of the medical aesthetics industry has become routine. The sharp rise in compliance costs has caused many “underground workshops” relying on tax irregularities to lose their survival ground.

On the pharmaceutical and medical device circulation side, regulatory tightening continues.

Following the National Health Commission’s clear ban on illegal light medical aesthetic procedures in beauty salons, new regulations on live-stream e-commerce have also imposed restrictions on online marketing of medical aesthetic products. The new rules require medical aesthetic drugs and devices to be traceable via mandatory QR codes, and platforms are strictly prohibited from influencers selling related products. This directly cuts off many small brands’ low-cost growth paths relying on “internet celebrity live-stream sales.”

In 2026, the medical aesthetics industry faces three main themes: “strict regulation,” “high technology,” and “large-scale integration.” When the regulatory sword of Damocles hangs overhead, those companies attempting to profit from information asymmetry and illegal operations will see their so-called “high growth” bubbles ruthlessly burst.

02

Post-capital withdrawal performance ecosystem, “medical beauty kingpins” and cross-industry players’ predicaments

Under the dual pressures of policy crackdown and macro consumption downgrade, the once-capital-market-dominant giants in medical aesthetics are beginning to show signs of fatigue in their financial reports.

The performance data disclosed in the first quarter of 2026 completely shattered investors’ illusions of “eternal youth” in the medical aesthetics track.

In April, Aimeike released its Q1 2026 results, with revenue down nearly 4.5% year-over-year and net profit attributable to parent dropping over 32%. This leading company, once famous for its “Hi-Body” flagship product that created a market cap of over 170 billion yuan, saw its stock price decline as well.

AimeiKe’s difficulties are related to a single-product matrix and erosion of its moat.

Previously, AimeiKe relied heavily on solution-based and gel-based injection products (such as “Hi-Body” and “Ruwaitian Shi”), which contributed the majority of its revenue. However, as the market penetration of neck wrinkle repair saturated and competitors like Huaxi Bio and Polysilicon launched aggressive low-price strategies, the pricing power of “Hi-Body” began to weaken, even being diverted by cheaper alternatives.

To stabilize its core business, AimeiKe significantly increased sales expenses, further squeezing profit margins. Although it previously expanded overseas through acquisitions like Korea’s REGEN to develop a second growth curve, overseas contributions remain limited and unable to fill the shortfall from the declining main business in the short term.

It’s not only native medical aesthetic companies facing challenges; those attempting cross-industry mergers and acquisitions listed companies are also suffering in 2026.

A typical example is Shapuaisi, an established pharmaceutical company trying to achieve “dual-wheel drive” with medical assets. After high-premium acquisitions of hospitals like Taizhou Women and Children’s Hospital and Qingdao Shikang Eye Hospital, the company’s 2025 net loss attributable to parent was 239 million yuan due to declining performance and goodwill impairments. Yet, Shapuaisi did not stop expanding. In March 2026, it announced a high-profile M&A plan to acquire Shanghai Qinli Industrial Co., Ltd. for 528 million yuan.

However, facing regulatory inquiries and investor skepticism, coupled with a tight capital chain, Shapuaisi was ultimately forced to terminate the acquisition in early May 2026.

This ending not only marks a setback for Shapuaisi’s cross-industry medical beauty strategy but also profoundly reflects a fundamental shift in the valuation logic of medical aesthetics assets in the capital market—blindly paying high premiums for acquisitions has become completely ineffective in the current downward cycle.

03

From “marketing king” to “technology wins”, the breakthrough point in the stockpile battle

When the tide recedes, only those companies that abandon superficiality and return to the essence of medical care will remain at the table.

In 2026, although the traditional injectable segment faces brutal price wars, upstream raw material innovation and regenerative medical technology are experiencing a concentrated growth phase.

Recombinant collagen is accelerating to replace hyaluronic acid as the industry’s new core growth engine.

According to Qianzhan Industry Research Institute, the recombinant collagen market for aesthetic injections has led other categories in compound annual growth rate after years of dormancy, especially as recombinant collagen gradually becomes mainstream.

Leading platforms have already heavily invested in this track. In April 2026, the well-known domestic medical aesthetics platform Xinyong and Jinbo Biotech jointly held the “Youth Miracle” strategic launch, officially unveiling an exclusive recombinant collagen anti-aging solution for all scenarios. This not only marks the scaling realization of Xinyong’s five-year supply chain strategy but also reflects the industry trend of upstream core technology integration by downstream channel providers.

Today, whoever masters high-tech barrier “scarce raw materials” like recombinant collagen will hold absolute influence over terminal institutions.

Meanwhile, in the highly competitive botulinum toxin market, differentiated innovation is also key to breaking through.

For a long time, the domestic botulinum toxin market has been monopolized by a few imported and domestic products. But by 2026, this pattern is beginning to break. On March 25, Huadong Medicine announced that its exclusive distributor of injectable recombinant A-type botulinum toxin (brand: Ruituoxin) had received approval from the National Medical Products Administration.

As an innovative product with global intellectual property rights, the launch of this recombinant botulinum toxin not only enriches Huadong Medicine’s medical aesthetic pipeline but also provides a new weapon for domestic clinics to combat homogenization.

Additionally, innovations like “certified” radiofrequency beauty devices and AI-assisted diagnosis are also signaling a bottom-up technological-driven supply-side reform in the industry.

The future winners will not be those who only spend money on marketing and “famous doctors,” but those who continuously invest in R&D in regenerative materials, biotechnology, and smart hardware—long-term believers.

Conclusion

Looking back from the midpoint of 2026, it’s clear that China’s medical aesthetics industry has stepped down from the altar into a more rational and also more brutal “cooling-off period.”

The past “rough mode” of relying on information asymmetry, tax blind spots, high-premium M&As, and frantic marketing to drive growth has been completely bankrupt. Against the backdrop of comprehensive policy measures closing loopholes and increasingly rational consumer behavior, the era of industry super-profits has ended. What replaces it will be a “micro-profit era” focused on compliance, product R&D, and refined operations.

In the big waves, only the survivors remain. When the “appearance economy” bubble deflates, only those companies that truly respect medical fundamentals, hold core technologies, and possess strong compliance and risk control capabilities will be able to pass through this long cycle, continuing to shape the new pattern of China’s medical aesthetics industry in the next decade.

For the capital market, learning to evaluate medical aesthetic companies with a traditional industrial perspective may be the most valuable lesson brought by this industry upheaval in 2026.

Author’s note: Personal opinions only, for reference.