Q4 2020 Aesthetic Medical International Holdings Group Ltd Earnings Call
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Good morning, ladies and gentlemen. Thank you for standing by welcome to aesthetic medical International for Q and fiscal year 2020 unaudited Financial results conference call during today's presentation. All parties will be in a listen-only mode. This conference has been recalled today Tuesday, April 20th, 2021 joining us today from aesthetic medical International. I would company's chairman and CEO back to Palm Joe and companies all ird wrong and Company's Chief Financial Officer Mister Guam wawoo wage before we get started. I would like to remind you and that some of the information discussed will include forward-looking statements regarding future events in our future Finance job.
Performant these include statements about our future expectations Financial projections in our plans and Prospects actual results, May differ materially from those set forth and such statements for discussion of these risk and uncertainties. You should review the company's filings with the SEC which includes today's press release. You should not rely on our forward-looking statements as prediction of future events are forward-looking statements that we make on this call are based on faith and beliefs as of today and we undertake no obligation to update them except as required by applicable law our discussion today will include non-ifrs Financial measures, including everything adjusted profit and adjusted everything off.
Consider every time just Amita and adjusted profit as a substitute for or Superior to net income prepared in accordance to the law i, f r f furthermore because non-ifrs measures are not determined in accordance with IFRS. They are acceptable to varying calculations and it may not be comparable to other similar title measures presented by other companies. You are encouraged to review the company's financial information in its entirety and not rely on single Financial measures at this time. I would like to call the turn the call over to mister chairman and CEO of aesthetic medical International his open his remarks will be delivered in English by i r d Club.
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Mister Joe, please. Go ahead.
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Thank you operator and everyone for 20,000 providing an overview of the companies respond to the COVID-19 outbreak during the critical year twenty-twenty followed by a summary of the company's fiscal year 2020 performance. Then I mean we will our special salts and operation performance and more details and he will elaborate a few other items related to our our log approaches that we are taking to implement our core initiatives in the next physical year.
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Despite the fact that COVID-19 is under if I could control in China at the current stage. We are implementing COVID-19 prevention measures including but not limited to regular regularly still lacking in ventilating company facilities taking Shake protective measures to protect our front-line employees and customers segregating employees lunch time monitoring the body temperature of our employees and customers and keeping records of trouble history and help of our employees and their immediate family members.
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In 2020, we actively through containing the COVID-19 and carry-out aesthetic medical service and the home of of ensuring the safety of our customers and employees. We insist on meeting customers, uh, medical needs with higher standard medical technology is strong Medical Teams and high-quality service and building trust with our with our customers.
Cardio in here with your mom though, Is that email? Yeah, that sucks. I use to tell me what you think that using that phone number.
Used to the rule. Yeah who you want me to?
In 2021, we will continue to promote the development of the aesthetic medical service strengthen our medical team and focus on the research and development of the aesthetic medical Technologies different needs of an expanding customer base safely and built he's has always been our purpose and this purpose will continue to use us back in right direction of the aesthetic medical industry. We will continue to leverage the advantage of traditional plastic surgery with accumulating industry wage for many years. She's the huge opportunity to meet up at direct medical as person and realize the optimization and upgrade our products and services with technology and services as the quarter. There are still uncertainties about the COVID-19 demek, but we have confidence and we'll do our best to overcome difficulties.
we will continue to
To provide customers with high-quality Service as well as bring long-term value to our shareholders and investors.
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Tony by quickly drive. Basically, I know one point six million approximately equals to USD 108.2 million in 20/24 RMB 869.1 million in 2019.
Transfer for home either so I bring in the evening.
Thank you again for all your support and attention next I will turn the call over to review operational costs and financial results for the fourth quarter and fiscal year and December 21st 31st 2020 as far as our business outlook on behalf of the management team Nissan, please go ahead so thank you Doctor Joe and good morning. Everyone next behalf of the management team. I will summarize some of the key another Financial operation result for fourth quarter $20 and physical year and December 31st 2020. So let me begin with the fourth quarter 2020.
In fourth quarter 2020 total revenue increased by 52.3% to R&B 365 which is about 55.6 million u.s. Dollar excluding the impact from the consolidation of investment management call limit switch out the company entered into agreement to purchase a 51% Equity interests of investment management on the July 14-20 twenty but and then but subsequently entered into an agreement to dispose of the 51% of the equity interests of hunting on December 3rd.
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Changes the disposal was mainly due to slower than expectation recovery of COVID-19 and the overall less than satisfactory performance Alpine things during the post-acquisition. As the companies obtain control over Hyundai from August 4th 2020 to December 25th, 2014 company consolidate the result of a drink. For lack of comparability in the analyst of the and all this financial yourself below the information provided below exclude wage the impact of the consolidation of countries yourself. So the total revenue will have increased by 3.1% trying to be dead.
245.6 million or USD 37.6 million in fourth quarter 2020 pilot luggage into an increased demand for service with higher price partially offset by a decrease in the total number of customers right across form was signed be 235 million representing increase of 44.9% from R&B 162 point two million in the fourth quarter of 2019. The corner of profit margin was 64.8% represents change in Chrome, 3.3% So 68.1% or fourth quarter of 2019, excluding the impact from the consulate dead.
Of countries without the Godfather would have been R&B 150 for 1 million representing an increase of 8.4% from the fourth quarter of 2019 and the gross profit. Margin we have in uh-60 1.51% with the sending a decrease of 7% of the gross profit of nonsense. Nonsense Oracle medical service was Randy Moss Point two million would be sending an increase of 23.4% and R&B 95 million to the fourth quarter of 2019. The gross profit margin was 64.3% increase from 66.7 is this month
quarter of 2019
Excluding the impact of the concentration of surface results cloth-covered of non-surgical aesthetic medical service would have been off 84.1 million representing a decrease of 12.2% from the forequarter of 2019. And the Costco margin would have been fifty 1.5% the same thing a decrease of five and to 5.2% So the grandfather of minimum wage is like treatment was R&B 62.7 million representing increase of 36.3% some R&B forty six million in the fourth quarter of 2019. The cost for the margin was 65.8% with the same thing a month.
66.8% decrease in the fourth quarter of 2019 excluding the impact of the consolidation phase without the gross profit of the Mona Lisa Stanek. We have the ID 39.1 million representing a decrease of 15% And the cost for upper margin would have been 61.4% representing a decrease of 5.5% increase compared to the fourth quarter of 2019, the glass-covered of energy based off and be 55.5 million r e which is about USD 8.5 million with the same thing in cream.
14.11 point four-per-cent from R&B 49.8 million in the fourth quarter of 2019 the class 4 months or 62.7% representing it increased from 66.5% is the fourth quarter of a 2019 excluding the impact on uh-huh consolidation plan say without uh, corporate office of energy-based shouldn't we have the choice to be 44.9 million, which is a 9.8% increase and the cost for margin would have bought sixty 1.5% which is a 5% decrease from the fourth quarter of 2019 the cost per month.
Surgical
I started treatment with R&B 107.9 percent you presenting in an increase of 78.3% from IMB 63.5 billion the fourth quarter of 2019. The gross profit margin was 66.7% which is a decrease from 74.8% compared to the fourth quarter of 2019, excluding the impact from the console edition of choice out the gross profit of surgical aesthetic in service. We have been ID 58 million, which is a 4.51% increase compared to the
Fourth quarter of 2019 and the gross margin is a 12.4% decrease wage goes forward of the General Health Care Service treatment service with ID 8.9 million representing an increase of 15.8% and R&B 5.9 million the forequarter of 2019. The cost lever margin was 52% which representing an increase of 43.7% compared to the theater excluding the issue from be consolidation of countries results the cost for the margin of General Health Care Service and other aesthetic medical treatment would have been dead.
Be 8.1 million. We're presenting an increase of 37.3% compared to the fourth quarter of 2019. And the grasshopper margin would have been fifty 1.3% which is an 7.6% increase compared to the Cougars year selling expenses with R&B 200 million 200.1 million month, which is about 30.7 million u.s. Dollar representing is 55.2% of the company's total revenue of the same. Compared to the selling expenses of R&B, uh, one four four point three million in the fourth quarter of 2019, which were prestige.
16.6 of the company's total revenue of the computer selling expenses includes on a year-over-year basis because of the one-off impact from hunt a excluding the impact on Wednesday. The selling expenses in the order will have decreased by 10.5% They can confirm some R&B 129 on two million in the fourth quarter of 2025 R&B one point three million in the same period of 2019, um primarily due to the reduced price and level in marketing expenses in relations to the COVID-19 Hub app.
so
The general and administrative expenses ways. I'd be a 61.8 million or representing and decrease of 5.3% 19.3 percent decrease excluding the impact from hun. Say the name. The number decreased by 30% is the fourth quarter of 2020 from our MB 76.6 billion in the same. I bought a 2019 which is primarily due to a decrease in employee benefit expenses.
We recognize impair impairment of non-current assets of 33 million in the fourth quarter 2020 with the same thing a chance. I can increase from 1.4 million in the fourth quarter 2019 during the fourth quarter of 2020 the company decided to home. So it's actually focus on the treatment center in East Asia and South Asian and so in is China and South in China off the Southwest China Regent and invoked a much less resources to treatment center in other mediums in China We performed asset in German assessment and
Recognize impairment of trade name and properties plans equipment with respect to a certain Treatment Center. In other regions of China as a result of s a result for the foregoing the company's record a loss for the fourth quarter of 2020 R&B 81.7 million, which is about 12.5 million US dollar compared to a loss of R&B 60.6 million in the fourth quarter of 2019 took his contributions for groups or ID 4.3 million, which is about 0.7 million during the fourth quarter and the loss on disposal.
Disposal of Hyundai was slow point eight million R&B basically hours per share was 1.1 a month, which is about 0.18 US dollar compared with basic laws per share of R&B 0.99 Thursday the 4th quarter of 2019 diluted loss per share with ID 1.18 computer was off the last four share of the 0.99 the fourth quarter of 2019 the Evita for the fourth quarter of 2020 was off for R&B 25.9 million representing a decrease of 26.4% on the loss of birth.
3500
Blue on the front quarter of the uh, nineteen. I just deposit for the fourth quarter of 2020 was a lot and be 28.5 with a decrease of 506 five hundred and 7% from a Corvette of the 17th quarter of 2019. Just for the fourth quarter of 2020 was in the 27.6 million am representing a decrease of 14.2% from my Corvette of R&B Thirty 1 million in the fourth quarter of 2019.
Now I will talk about the physical year twenty-twenty and all the financial results for the full physical year twenty-twenty our total revenue increase by 3.7% to R&B 926 million, which is about 138.2 million US dollar excluding the impact from the consolidation of hunters result. The total revenue will have uh, eighty-five 17.1% So I'll be 720.2 million.
Which is about 110.4 million in US dollars in 2020 primarily due to the impact of the call. May I direct that cost the uh temporary shutdown of the treatment centers all over China, uh, uh experiment was home. I'd be 558 million representing a decrease of 8.1% of the gross profit margin was 60.4% We're presenting a decrease of 7.8% excluding the impact on the consolidation of pay off because Parker we have our before one thousand six hundred million crossover. Margin would have been fifty 7.8% representing and phone number.
No, 10.4% as compared to 2019, uh primarily due to our enhanced promotional efforts in response to the COVID-19 condemn. It needs to increase Revenue treatment the cost of a surgical aesthetic treatment service with R&D 269 million, which a decrease of 23.2% from R&B 350.3 million in 2019. The cost for the margin was 59.4% wage increase from 71.5% in 2019, excluding the intake on the hunt a uh, cause further of birth.
surgical at
Select Medical Service would have been
220.6 million representing an increase of 33% compared to the previous year and the glass fiber. Margin. I have the 67.5% representing 14% plus whatever wage in most vicious was a 91 Ford 5.8 million, which is a decrease on 5.8% compared to the previous year was 62.1% representing an increase from 69% off in the 2019, excluding the impact from the consolidation of hunt a result to go forward of minimal invasive aesthetic.
Ever have one one one point two million R&B with a sentence a decrease of 28.2% from the 29th. And Costco. Margin would have been 59.5% with the same thing in disbelief of 9.5% from 2015. The cost of energy was R&B one, two, three point two million representing increase of 37% wage decrease compared to the previous year. Uh-huh was forever margin was 56.5% representing a degree from 7 a.m. To 3.7% in 2019, excluding the impact from Hyundai the course of energy based off.
Switch housing R&B 109.4 million with the same thing increase of 44% compared to the previous year and the across imagine would have the 55.6% which is a 18.1% increase goes for the margin of surgical at home. Medical service was R&B 2325 3.1 million, which is a increase of 19.9% off the books for this margin was 63% representing it increased from 66.1% in 2019, excluded an impact from the store location of Hyundai Excel goes forward of surgical aesthetic medical service. We have been dead.
and stuff and 4.7
and representatives from 2% from the gear and it was for the margin will have been 59.9% off which is a 6, a 6.2% decrease the cost of General Health Care Service and under Joseph medical service was Nineteen twenty two point seven million representing a decrease of Twenty Eight Point four million already dead in the same. 2019 was for the margin was 48% representing a decrease from 52.6% in that same period of 2019 and excluding the impact and hunt a uh, um,
General Health Care Service would have been R&B 21.2 million, which is a 33.1% increase from the tone nineteen and the larger would have been 47% which is a 5.3% increase. So let's think this was uh, eighty-five one 510.6 million R&B with the sensing, uh, a, uh, 56.66 company's total revenue, uh compared to the selling senses of R&B for 13.1 million in the 2019, which would be sent off 7.5% of the company's total revenue of 2019. Selling expenses increased by a 23.6% wage.
Tyler is due to a one-off contribution of R&D one 10.3 million from hunting excluding the impact from home something expenses in 2020. We have uh is decreased by 3.1%
and which is due to a decrease in employees benefit expenses as a result decrease in sales cost by COVID-19 demek and decreased spending during the double eleven season, which is a month charges shopping season, uh in the 2020 General and administrative expenses was R&B 236 or six million percent increase of 17.5% some R&B 163029000 hunting in general and administrative expenses in 2020 would have increased by 10.9% due to a increase of
in the
passing of Options under Aesop's claim
We recognize internment of non-current accent of iron be thirty-three million in 2020 representing an increase. I'm sorry be 13.6 million minutes. I'm already one point four million in 2019 during the fourth quarter of 2020 the companies decide to uh, I actually focus on treatment centers and easy yourself in each China South China and what's Southwest China Regence devote much less resources through treatment center. The other regions of China will perform exit impairment assessment and recognize impairment of Wills cleaning and property plant and equipment with respect to certain treatment centers in other regions of China as a result of forgoing the company.
Please record the loss of warranty to 46.9 million for a 2020 compared to a profit of 108.3 million in 2019 Hyundai contribution of $94 million twenty consistent. And a lot of jobs also has a West IBM zero point eight million basically also share with the 3.6, which is about $0.55 US dollar compared with basic learning to share of R&B 2.916 / 19 that diluted logs for shareware time is 3.61 compared to Diamonds and lost my share ID zero.
Chevrolet in 2019 for 2020 with a lot of R&D one, two, three point nine million representing a decrease of 146.6 something profit of 265 million twenty. Nineteen. I've just department for fiscal year 20 m 1 1 million four-per-cent playing a decrease of 260.6 from a profit of 60 from R&B 69.1 million. 2019 adjust that for fiscal year 2020 was the last twelve million representing a decrease of 93.6% plus 7.1 the same. Thursday.
Now I will talk about operational results repeat customers defined as active customers who have previously received one to see here from the company account for 62.9% of the company's active customer base in fourth quarter of 2020 without considering the One impact on housing without considering the one of the entire some countries the company conducted a total of wage 193 South including $25,194 surgical treatment and 146435. No surgical treatments in the fourth quarter of twenty 21% a month.
Increase of 9.9% and 5.4% and they increase of 3.8% off respectively from 176052 to the treatment and County 3910 surgical treatments and uh 141081 months in the first quarter of uh, twenty blinking repeated customers account for about 65.5% of the company's active customers based on a 24 you without considering the impact of hunting with considering the impact of the company conducted total. Yep.
57218 is including 9292 Circle 413-2359 planes and twenty twenty-five representing an increase of 3.9% and 2.5% increase of 2.2% respectively from 853-6469 Total shipments.
90658 surgical treatment as 404-3169 surgical treatment of 2019 now wage for a quick summary of our balance sheet and cash flows as of December 20th, December 31st, 2012. We had cash and cash equivalents of 44.4 million, which is about 6.8 million US dollar compared to 185 4.50 December 31st previous years that cash used in operating activities was Super 8 million in a 2020 compared to net cash generated from operating activities of 66.8 million in 2019. The nightclub.
choosing in fact
Saying activity was 91 to 7.4 million. The Mac has generated from financing activity was I'd be 7016 point seven million and for the other development company on the June 14th of July 2020 the company entered into a share purchase agreement to acquire 51% off. I'll say with its original shareholder on December 25th of the same year did company entered into a group event to dispose of the 51% accurate insurance or something with the seller. That is also mainly due to the phone number.
For extractors recovery of COVID-19 and the author or less satisfaction satisfactory performance of the home during the post-acquisition. On December 13th, 2020. The company announcer is full of directors has approved a share repurchase program under with the company's authorized to repurchase in the open market up to up to $6,000 worth of its 80s from time to time until uh, October 12th, 2020 months depending on General market conditions and other factors as well as subject to the ethical laws and companies Securities trading birth.
That's off the date of this release. 45,000 80s was repurchased.
Was a total consideration of about 0.3 in October 2020 the company enters into an appointment to 95% of the total equities of staging of a machine investment and uh consultancy limits month, which is Beijing elements for a consideration of R&B 11.5 million.
But the transaction was completed in January 2021 and Beijing has become a name of the company on December 8th, February 9th, 2021. The company Forbes not have jointly used in Chinese aesthetic treatment industry white paper 2020, which is the first white paper on a fabric treatment industry in China for the business Outlook.
Gradually recover from the aftermath of COVID-19 outbreak the company's experience recovery is the uh, business operation, uh-huh. What direction of relaxing and it's negative impact to the market design of the company's business operation still cannot be conclusively and actually estimate on the same at this time since there's still uncertainty for possible compromising operating in the future subject to change any uncertainty of the development of COVID-19 the company currently expect that its Revenue will gradually recovering the fourth quarter off 20 21st, such expectation reflects occurring and preliminary views of the company's management team based on wage.
Information available at the time and may be subject to change the company will continue to Monitor and evaluate the development of the Confederate and resultant emotional impact on the company. Now, I would like to talk about the quality and capital resources. The company has made off of 96 moment.
That's off the December 31st 2020 and which includes current offerings of R&B 136 million and operating loss of 247 million and net operating cash outflow of and be so points for the years then from the year-end December 31st, 2020 during the year and the company.
Completed for Acquisitions, which has a potential cash flow of approximately five million for the remaining. The acquisition configuration is the Victor 12 months after the date of this release during the first quarter of 2025. Um outbreak of COVID-19. The company temporarily shut down its Center. This calls material and adverse impact on Georgia Avenue and Castro from the first half of 2020. You have potential continuing impact on these subsequent. After considering the gradual recovery off the business during the post COVID-19 outbreak. It's uh, it's expected cash flow from future operations taking into consideration cost a month.
Francis management
sign from the bank boring and other resources are other sources of commencing the company concludes that it's sufficient financial resources and financial obligations as when they fought you and
continue its operation in the next 12 months subject to any uncertainty of the development COVID-19. Hello. I would like to add some Colour Revolt company strategy in the year of 2021. We plan to stay focused on integrating the aesthetic medical industry chain during the package. Yes. Yes, I could recommend a call industry has been evolving from which to mass Market consumption with higher consumption walk-ins more standardized and diversify products and services and higher level of friends recognitions off to tap to this Market rent was trying to become an aesthetic medical company with more competitive Medical
Capacity the ability to provide a full circle service and more importantly well-recognized friends and large-scale.
To that and we need to quickly increase our business scale to improve our competitive strength to share and according including the power off. Our strategy is Crystal Clear its to make to use our of our funding capacity to wage is so low date good Target with attractive valuation.
No, I would like to turn the discussion over to the operator for any question. We will now begin the question-and-answer session to ask a question. You may press * then 1 on your touchtone phone. If you're using a speaker phone, please pick up your handset before pressing the keys to look do your question, please press start then to at this time. We will pause momentarily to assemble our roster.
First question today is from Carolyn Yang a private investor. Go ahead.
Thank you for taking my question. I have three related questions. The first one is was this year's performance largely influenced by Colleen 95. The impact of the 10 tablet. Thank you.
Okay. Yes, actually this year's performance is largely over 19,000 because uh, uh some of our centres and hospitals shipped out for the first couple of months of the year. So Monday, we simply cannot do any treatment and so that is the reason that we record and we've done very good in the office previous year, which is uh, 2019 and we actually look forward to 20 21
Yep. Thank you for question. Okay. Thank you. And
my second question is whether the overall operation this year would be adjusted in the future. Thank you.
Yes, the
the strategy is just report and shared the general strategy will say Remains the Same but I will adjust some of our strategy. For example, we are now more focusing on the eastern part and southern part of China instead of doing MMA and expanding business all over China. So we are more focused now.
Thank you for question. Okay, thank you. And my last question is we will call in improving order expectation of this year long is the performance of 2021 was looking forward to.
Yeah, thank you for your question Yeah, we actually are very optimistic about 20,000 21st. I don't have the exact number with me right now, but we are expecting a uh-uh, uh-uh of Revenue name and number of treatments and number of customers basically everything, uh based on the result of 2019 instead of 2020. You said he was a very special year, so we are expecting a good year this year. Thank you.
Okay. Thank you.
Our next question. Next question is from Tammy one from sunscreen Capital. Go ahead. I have a home three Patrick. And the first one I speaking with the operation side does the number of non-surgical customers chose any like upward Trend? I mean, I know what the expected and your brief break.
This is a yes. Yes. Thank you. Let me answer the first question first. Yes. We actually do see a Thursday. We're trying for the non-surgical customers because of the the industry is more acceptable and popular among the younger customers. So the teenagers are and the young adults are more and more about this treatment. So instead we we actually see a trend in both Surgical and non-surgical treatment in our in our in our company. But yeah, we do see a trend and the expected go play. Annually. I think it's about twenty-five years.
ten or even more
Okay, cool. Basically the question is yeah, we can see that the repurchase rate of the company. Like I said hi and Mally from like which kind of project I know that.
Yeah, yeah, of course, the repurchase rate mainly come from the equipment and the minimal invasive job and this because the laser treatment and invasive treatments you can do it on the monthly or maybe quarterly basis. So we do see a ugh we do see a very good rate on these uh, uh, uh rate on a treatments.
Okay, and your last question is will the company continue to increase the investment in the projects in the coming year to twenty twenty-one?
Yes, we are actually planning to increase more investment in this part of the game because we do see a trend of the younger customers who are who who are more likely than a moral who are who who are more friendly to these non surgical Medical Treatments. So, I mean like nobody likes surgery so I know but she's like, uh-uh doctors cutting off your your your uh, your skin and and doing surgery. So, um, these non-surgical treatment are more and more popular in South Asia.
I see.
Okay. Thank you. That's all questions.
Yep. Thank you. Again. If you have a question, please press * then 1.
No further questions. Let me turn the call back over to mr. Chen. Yong Wang for closing remarks.
Thank you on behalf of our entire management team. I would like to thank everyone again for joining us today for a conference call. If you have any questions, please contact us through email or reach our our Council investor relations with questions. I r. I will respond to your question as soon as possible. We appreciate your interest and support in aesthetic medical a national and look forward to speaking with you again next time, please go ahead. Thanks. Thank you everyone for attending aesthetic Med off International fourth quarter and fiscal year 2020 unaudited earnings conference call this concludes our call today, and we thank you for listening. Goodbye.
Thank you. Have a good day.