Focusing on Langzi Holdings' medical aesthetics business: where is the "beauty trap"?

Every year on March 15th, International Consumer Rights Day, the medical beauty industry, like the food industry, also attracts public attention.

Looking at past issues exposed, the medical beauty industry indeed has problems like counterfeit products and unscrupulous clinics, but there’s also concern over “medical beauty installment payments,” essentially “medical beauty loans.” Suspected AI-generated content.

“Medical beauty installment payments,” as a financial service tool, do provide some convenience for consumers, but due to issues like “lack of transparency,” they have long sparked controversy among consumers. Some consumers even say that beauty salons and platforms are just carefully packaged “credit intermediaries.”

Among these, Langzi Co., as a representative company of the medical beauty concept in the A-share market, is currently under industry scrutiny regarding its operational status.

PART 01

Is the “Medical Beauty + Finance” service model feasible?

At brands like Milan Borui and Jingfu Medical Beauty under Langzi Co., consumers can access various payment options recommended by beauty institutions. Since the average spending per customer in medical beauty is relatively high, some clinics cooperate with financial institutions to offer installment payment services, which is not surprising. The purpose of this** is to ease the financial burden of large one-time payments for beauty seekers.

However, many industry surveys show that disputes involving “induced consumption” and “credit issues” in medical beauty are quite high and have been increasing over time.

Therefore, negative feedback from consumers may not just be “trouble,” but reflect a concerning “conversion rate” issue. Simply put, if a customer “has no money,” some clinics will “help” them find funds for beauty procedures. This “sales-oriented” approach can easily lead some stores to induce customers to take out loans to meet performance targets.

This model not only risks damaging brand reputation but also risks crossing regulatory boundaries. If Langzi Co. attempts to align its business more closely with the “Medical Beauty + Finance” model, these potential risks cannot be ignored.

Starting in 2026, regulators require financial institutions to clearly display comprehensive financing cost tables, itemizing each fee, interest rate, and the method, standard, and entity of charges. This means that practices like obscuring fees or hiding interest rates to mislead and induce consumers, which some beauty stores previously used to boost performance, will no longer be permissible and could lead to regulatory penalties.

PART 02

Risks Behind Rapid Expansion

What are the sensitive points for Langzi Co.? The public’s concern centers on its increasingly complex financial performance in recent years.

On one hand, by the end of Q2 2025, the company’s medical beauty institutions numbered 42, including brands like Milan Borui, Jingfu Medical Beauty, and Gao Yisheng. The company continues to promote nationwide expansion of its medical beauty business, incorporating entities like Beijing Lidu and Hunan Yamei into its consolidated financial statements.** The revenue share from its medical beauty segment rose from 6.25% in 2016 to 44.4% in the first half of 2024, making it the company’s largest business segment.**

(Source: Langzi Co. 2025 Annual Performance Forecast)

On the other hand, Langzi Co. is also facing operational pressures. In January 2026, the company released its 2025 annual performance forecast, estimating net profit attributable to shareholders of 900 million to 1.05 billion yuan, a significant increase of 245.3% to 302.8% year-over-year. However, this profit growth mainly stems from investment gains from the sale of shares in Ruyuchen, totaling 725 million yuan.** Excluding this non-recurring income, the company’s core net profit (after deducting non-recurring gains/losses) would only be between 220 million and 290 million yuan.**

To support nationwide expansion, the company has also acquired high-value goodwill, totaling 1.92 billion yuan, accounting for 22.3% of total assets, with a long-term asset-liability ratio exceeding 50% and short-term borrowings over 1 billion yuan.

These financial figures highlight that while the company is rapidly expanding, it also faces structural risks associated with its scale growth.

PART 03

Terminal store management still needs improvement

Recently, Langzi Co.’s management has undergone personnel adjustments, which are part of normal organizational optimization. The core management team remains stable, with founders like the chairman and general manager still leading operations.

In governance, Langzi Co. has established a three-tier management model: “Langzi Medical Management - Medical Beauty Business Unit - Medical Beauty Institutions,” and uses digital platforms to strengthen control over its branches. While this structure is standard, the key question is whether the execution team can effectively implement headquarters’ management requirements at the store level.

Recent feedback on the Black Cat Complaint platform about Langzi’s beauty clinics, such as “induced recharge,” “post-treatment adverse reactions,” and “inability to provide formal contracts,” has raised doubts about the company’s responsibility and professionalism at various levels.

On one hand, the PR team promotes medical technology and expert teams, but on the other hand, some stores engage in induced consumption or over-promotion, revealing management gaps amid rapid expansion.

While these cases do not necessarily represent the overall service quality, they serve as a reminder to management: as a chain expands, balancing growth with service quality and strengthening behavioral constraints on frontline sales staff are unavoidable and critical issues.

Conclusion:

Not only in medical beauty, but Langzi Co. also has diversified into fashion women’s wear, eco-friendly baby products, and more. This diversification helps spread risk and demonstrates the company’s resource integration capabilities.

Although the growth rate of its medical beauty segment has slowed in recent years, it remains the most promising sector, accounting for nearly half of total revenue.

For Langzi Co., the real challenge may not be short-term performance fluctuations but how to maintain quality during scale expansion and find a balance between growth and service standards.

Additionally, managing cash flow risks amid high debt expansion and truly implementing the “medical-centered” philosophy at every terminal store are key issues management cannot ignore.

In summary, as the industry enters a stage of stock competition, only by emphasizing compliance, technology, service, and quality can medical beauty companies navigate market cycles and ultimately earn lasting consumer trust and growth opportunities.