Q2 2021 Aesthetic Medical International Holdings Group Ltd Earnings Call
Good morning, ladies and gentlemen, and thank you for standing by and welcome to aesthetic medical International's second quarter and first half of 2021.
<unk> conference call.
During todays presentation, all parties will be in a listen only mode.
As a reminder, today's conference call is being recorded on.
On the call today from a static medical International I, Duckworth Kangaroos Hill, Chairman and Chief Executive Officer, Mr. Toby Who's Chief Financial Officer, Mr. Joseph <unk> Senior director of Investor Relations and Mr. Delta Chi assistance to chairman.
Doctor Jodie would view the business operations and the company's highlights followed by Mr. Zhou Chen.
The company's financial performance.
Chairman's CFO and IR team will all be available to answer your questions. During the Q&A session that follows.
Before we get started I would like to remind you that some of the information discussed will include forward looking statements regarding future events and our future financial performance. These include statements about our future expectations financial projections, and our plans and prospects.
Actual results may differ materially from those set forth in such statements.
For a discussion of these risks and uncertainties you should review the company's filings with the S. E C, which includes today's press release.
You should not rely on our forward looking statements as predictions of future events.
All forward looking statements that we make on this call are based on assumptions 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 I F R as financial measures, including EBITDA adjusted loss and adjusted EBITDA.
You should not consider the EBITDA adjusted EBITDA and adjusted loss as a substitute for or superior to net income prepared in accordance with I F. R. I S.
So it anymore, because not ifr as measures are not prepared in accordance with I F. R. S. They are susceptible to varying calculations and may not be.
Parable two others similarly, titled measures presented by other companies.
You are encouraged to review the company's financial information in its entirety and not rely on a single financial measure.
At this time I would like to try to call over to Dr. Penguins, Chou, Chairman and CEO of aesthetic medical international his opening remarks, we will need to be but in English, but his assistance Mr. Derek She about fishes Doctor Joe. Please go ahead.
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Thank you operator and everyone for joining the call today.
We are pleased to see an encouraging result in this quarter in terms of operational and financial results strategic restructuring plan and always give out in the field of non surgical aesthetic medical services.
The impact of COVID-19 has been graduate degree.
In mainland China, the public has resumed their daily activities.
As steel consumption of aesthetic medical services supported by the recovery of market demand the number of our active customers in the first half of 'twenty one to one increased by 21, 7% year over year, which drove the revenue growth of $68 six per se.
Over a year and a gross profit margin improvement.
Eight four percentage points in the first half of 'twenty. One adjusted EBITDA also rebounded strong loss in the first half of 2020 to profit in the first half of 2021.
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We highly value the importance of sustainable growth and had been contemplating a strategic restructuring plan.
Typically we plan to cease the operations or divest certain hospitals and clinics that.
And are located in our non core markets or did not meet our internal performance requirement before the end of this year.
Seizing the operations.
Divesting these underperforming hospitals and clinics.
Hindered our financial performance.
They are focused on realizing the full potential of retailing as it were.
Assess the value of these hospitals and clinics.
Was recorded a nonoperating and noncash impairment loss in the second quarter of 2021.
We believe that this is an essential moves to improve our operations.
Solidified.
<unk> position in the market in the long run we expect the overall profitability of the retained hospitals and clinics will improve.
Ensuring a healthier financial performance.
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<unk> achieved outstanding performance with an average monthly revenue of over 1 million in this quarter and has realized satisfying net profit margin. We expect it will continue the growth momentum in the third quarter of 21, who aren't currently three immuno satellite clinics will commence.
Operations around the end of this year.
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Going forward, we are strategically.
The focus from rapid national expansion to a more focused stable and sustainable growth in terms of revenue and profitability.
We will continue to focus on renovating our.
This thing flagship hospital and investing.
Jesse clinics to promote.
Although net organic growth, we also plan to focus on the core regional market.
For example, the Guangdong Hong Kong, Macau, Greater Bay area, and the younger the Delta area.
And we look for opportunities to establish hospitals or clinics in the regional market.
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Although sporadic COVID-19 cases detected from time to time in mainland China economic activities in regions, where edge off risk have not been materially affected.
Our hospitals and clinics are implementing necessary precautions, including temperature checks for employees and this infection of premises to secure how genetic environment for both staff and customers riding on the vibrant development helped the aesthetic medical market.
The peoples Republic of China, together with edge.
Extensive experience in the field, we've read the edge, we will be able to increase its market penetration and seize market opportunities from the expanding market.
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And then shows of for the second quarter and first half of 'twenty or 'twenty one Joe. Please go ahead.
Thank you, Joe and Hello, everyone.
Or is some of the key unaudited financial results and operational results for the second quarter ended June 32021.
In the second quarter of 2021, our total revenue increased by 34, 4% to RMB 2200 $24 million.
Primarily due to the recovery of economic activities and customer demands and purchasing power in mainland China.
Together with the company's efforts to boost the sales.
Many of them are not a surgical aesthetic medical services was RMB $117 million, representing an increase of 41% 341, 3% from RMB $82 8 million in the second quarter of 2020.
Revenue from minimally invasive aesthetic treatments was RMB 56, 6 million, representing an increase of 33, 5% from RMB 42, 4 million in the second quarter of 2020.
Revenue from energy based treatments was RMB $64 million, representing an increase of 49, 5% from RMB 44 meeting in the second quarter of 2020.
Revenue from surgical aesthetic medical services was RMB 91, 2 million, representing an increase of 27, 9% from RMB $71 3 million in the second quarter of 2020.
Revenue from General Health care services, and others that aesthetic medical services was RMB 15, 8 million, representing a net increase of 25, 4% from $12 6 million RMB in the second quarter of 2020.
Gross profit was RMB $133 6 million, representing an increase of 43% from RMB $95 2 million in the second quarter of 2020.
Primarily due to the significant growth in total revenue.
Gross profit margin was 59, 6% representing an increase of two five percentage points from 57, 1% in the second quarter of 2020.
Due to more higher margin services and products sold during the second quarter of 2021.
Gross profit of non surgical aesthetic medical services was RMB 68 six months.
Representing an increase of 48, 8% from RMB $46, one meeting in the second quarter of 2020.
Gross profit margin was 58, 6% compared with 55, 8% in the second quarter of 2020.
Gross profit of minimally invasive aesthetic treatments.
The $32 6 million, representing an increase of 26, 8% from RMB $25 7 million.
In the second quarter of 2020.
Gross profit margin was 57, 6% compared with 66% in the second quarter of Huntington.
Gross profit of energy based treatments.
The $36 million.
And an increase of 76, 5% from RMB $24 million in the second quarter of 2020.
Gross profit margin was 69, 6% compared with 57% in the second quarter of 2020.
Gross profit of surgical aesthetic medical services was RMB $55 4 million, representing an increase of 33, 8% RMB 41 4 million in the second quarter of 2020.
Gross profit margin was 67% compared with 58 one.
1% in the second quarter of 2020.
Gross profit of the general Health care services in the other.
Aesthetic medical services grew significantly from RMB, seven 7 million in the second quarter of 2022, RMB $9 6 million.
In the second quarter of 2021.
Gross profit margin was six 8% compared with 61, 3% in the second quarter of 2020.
Selling expenses were RMB $112 3 million.
Resenting, a 51% of the company's total revenue over the same period.
Compared to selling expenses of RMB 92, 5 million in the second quarter of 2020.
Which represented 55, 5% when the companies total revenue for the same period.
Selling expenses increased on the year over year basis, primarily due to the company launched more marketing initiatives. After it's gradually resumed operations in the second quarter of 2021.
General and admin expenses were RMB $44 eight minutes representing.
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21, 3% from RMB $66 9 million in the second quarter of 2020.
Primarily due to the decrease of RMB 11, 4 million in Aesop related expenses.
Impairment of goodwill was RMB $111 6 million compared with nil in the same period of 2020.
Impairments of intangible assets was RMB 43, seven minutes compared with new in the same period of time.
Payment of property plant and equipment was RMB $139 8 million compared with Neil in the same period of 2020.
The company incurred this impairments during the second quarter of 2021, primarily due to its strategic restructuring.
The trend at least three items were primarily because the company has performed impairment assessments at cash generating units level and noted several recoverable amount was lower.
Then theyre carrying amount for certain cash generating units.
Relevant impairments out one non operating.
Operating a noncash item.
As a result of the foregoing the company recorded a loss of RMB $324 5 million for the second quarter of 2021, compared with a loss of RMB $64 six many in the second quarter of 2020.
Basic loss per share was RMB 3.58.
Paired with basic loss per share of RMB 0.95 in the second quarter of 2020.
Diluted loss per share was RMB 358, compared with diluted loss per share of RMB zero point 95 in the second class of 2020.
EBITDA for the second quarter of 2021 was a loss of RMB $294 9 million.
Paired with a loss of RMB $34 3 million in the second quarter of 2020.
Adjusted loss for the second quarter of 2021 was RMB 14, nine minutes compared with an adjusted loss of RMB $31 1 million in the second quarter of 2020.
Adjusted EBITDA for the second quarter.
One quarter of 2021 was a profit of RMB 14, 7 million compared with a loss of RMB 1.0 meeting in the second quarter of 2020.
Now I'd like to move on to this first half of 2020 one.
<unk> financial results.
Total revenue was RMB $434 5 million, representing an increase of six to eight 6% for RMB $257 7 million in the same period of <unk> 'twenty.
Primarily due to the recovery of economic activities on the customers' demands in mainland China took.
Together with company's Safford to promote sales.
Gross profit was RMB $255 8 million.
We send him an increase of 96, 6% from 131 million RMB in the same period of 'twenty 'twenty 'twenty.
Primarily as a result of significant growth in the total revenue.
Gross profit margin was 558 point to 9%.
Letting increase of eight four percentage points from 55% in the same period of 2020, mainly due to more services and products with higher profit margins. So during this period.
[noise] gross profit of Nonsurgical aesthetic medical services was RMB $129 4 million.
So everything is on the increase of 104, 7%.
From RMB $63 2 million in the same period of 2020.
Gross profit margin was 57, 3% compared with 48, 5% in the same period of 2020.
Gross profit of minimally invasive aesthetic treatments.
RMB $60 2 million representing.
Representing an increase of 65, 8% from $36 3 million in the same period of 2020.
Gross profit margin was 55, 5% compared with 53, 4% in the same period of 2020.
[noise] profit of LNG based treatments was RMB $69 2 million.
If it didn't have an increase of 159, 2% from RMB $26 7 million in the same period of 2020.
Gross profit margin was 68, 8% compared with 43, 1% in the same period of 2020.
Gross profit of surgical aesthetic medical services.
Was RMB $108 5 million, representing an increase of 83, 6% from RMB $59 1 million in the same period of 2020.
Gross profit margin was 69% compared with 53, 2% in the same period of 2020.
Well profit of General Health care services.
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Correct Medical services grew significantly.
From RMB seven 8 million in the same period of 2022, RMB $17 9 million in the same period of 2021.
<unk> profit margin was 58, 9% compared with 48 four.
4% in the same period of time.
Selling expenses were RMB $206 3 million.
Representing 47, 5% of the company's total rounding off the same period.
Compared to selling expenses of RMB 170 75.
Many of the same kind of 2020.
Which represented a 60 point 66, 2% of the company's total revenue for the same period.
Selling expenses increased on a year over year basis, primarily due to companies has launched more marketing initiatives athletes gradually resumed operation in the second.
<unk> Corp.
2021.
General and then the main expenses were RMB $86 9 million, representing a decrease of 18, 4% from RMB $107 8 million in the same period of 2020.
Primarily due to the decrease of RMB 21, 7 million Aesop related expenses.
As a result of the foregoing the company recorded a loss of RMB $344 7 million for the six months ended June 32021.
Compared with a loss of RMB $147 5 million in the same period of 2020.
Basic loss per share was RMB three.
92, compared with basic loss per share of RMB 217 in the same period of 2020.
Diluted loss per share was RMB 392, compared to diluted loss per share of RMB 217 in the same period of 2020.
EBITDA for the six months ended June 32021 of them was a loss of.
RMB 286 seven minutes.
Parents with a loss of RMB $104 9 million in the same period of 2020.
Adjusted loss for the six months ended June 32021 of them was RMB $22 8 million.
Compared with an adjusted loss of RMB 89, 6 million in the same period for 2020.
Adjusted EBITDA for the six months ended June 32021 was a profit of RMB $35 2 million compared with allows the RMB $46 7 million in the same period of 2020.
Operational results in.
In terms of operating performance repeat customers defined as active customers, who have previously received at least one procedure from the company.
Good for 61, 5% and telco companies active customer base in the first half 'twenty to 'twenty one.
The number of active customers was one.
125.
100 <unk>.
Thousands excuse me 206 to one.
And then the increase of 21, 7% from 102933 in the same period of 2020.
This is mainly because of the impact of COVID-19 is gradually we see the first half 2021.
Number of treatment in the first half of 2021. The company performed a total of 270424 treatments, including four including 45238 surgical treatments and 225186 nonsurgical treatments.
Representing an increase of 33, 5%.
21, 5% and 636, 2% respectively.
Besides pure leaf on 202608 total treatments.
<unk> 3241, surgical treatments and 165367 nonsurgical treatments in the first half of 2020.
As of June 32021, cash and cash equivalents were RMB Susquehanna 40, $47 2 million compared to RMB $44 4 million as of December 30, 31 2020.
Looking ahead, we will continue to execute our strategies throughout the year.
There's just no telling them to provide better quality services to our customers.
From a sustainable growth to our shareholders.
This concludes our prepared remarks, thank you for joining us on today's call and we will now open the call to questions. Operator. Please go ahead.
Thank you.
To ask a question you will need the best Star and the number one on your telephone.
Your question please press the pound.
Okay.
Please standby while we can.
Thank you Kenny roster.
Once again for your questions. Please press star and the number one and wait for your name to be announced.
Our first question is.
From the line of Colin.
Please go ahead.
Open.
Hello.
Oh, Hi management.
Hello.
Oh, Hi, this is Derek we can hear you Oh Hello. Thank you so much for the presentation I'm learning that the company has actually divest some sort of assets during the period and May I know what are the impacts of the diverse a two hour not the income and the profit and are we expecting further asset suppression in the near future. Please. Thank you.
Yeah.
The step off the combination of all.
Thank you all again for your question yes.
At your neighbor in Paas.
Diversified you can see our income statement.
Say that yes, it will be though what a huge number of them.
That's what it is but we maintain a hospital.
System is a very profitable and then we will also have a planning tool.
And expanding our fracture hospital.
In the 2022, so that's why we have a very strong pumping them to return our company to be a profitable company in the year 2020.
Yeah.
Okay. Thank you.
Thank you once again to ask a question.
And the number one on your telephone keypads and between them to be announced.
Well your questions. Please press star and the number one and lately name to be announced.
Once again, if you have questions. It is tied to number one on your telephone keypad.
We need to be announced.
Once again.
Who wish to ask a question please press star and the number one.
We need to be announced.
We have one question are we still getting the information.
But for those who wish to ask a question. Please press star and the number one when your telephones.
Yeah.
Alright, he disconnected from the queue, but once again these specify the number one and wait we need to be announced.
Once again for your questions. Please press star one on your telephone keypad.
From the line of XI of debate with your call.
Please go ahead Ninety's open.
Hi management.
Hello.
Can you hear me all right.
Well here.
Yes, Hello, Hi, Thank you for the presentation Tonight I would like to ask because previously you have mentioned that we are going to open up more thoughtfully.
Hospitals are satellite clinics in various regions and ortho can you please share with us.
Opening plan and also I'll, let you know which area will be a key focus in the future. Thank you.
Thank you for the question the area for our key focus.
Uh huh.
Ah the Guangdong, Hong Kong and Macau, they area as well as the you don't see river area.
And the other tier one cities like Beijing in China.
And for the expansion plan of our.
Now circle mental clinics.
We're currently discussing partnership options with multiple investors.
Like phones for analysts CRO companies. So the final structure design will be.
Subject to the.
Who we contract with them.
But the overall strategy is the same that is to the next year, we plan to complete about 10.
Alex.
In the regions that we just mentioned and for the next three to five years, we plan to.
Opened about 30% to 50 clinics.
<unk>.
Yeah.
Thank you very much can happen that can I ask another question as well.
Sure Hello.
Yes, I will let you know that with their current economies and or so with the current policy, especially the.
A common threat for our common prosperity is there any impact on our business or on the demand for ice static surplus at that.
Overall, we don't see any material impact from us. Thanks.
Okay. Thank you very much.
Thank you once again for those who wish to ask a question. Please press star and the number one on your telephone keypads and wait we needed to be announced and to cancel the request is the pound.
Yeah.
Once again, please press Taiwan for your questions.
We have a question from Mike.
Operator, we cannot hear you.
Yes.
From a T M.
Uh huh.
Smith.
Please go ahead.
Oh, okay.
Oh, Yes, you have a question from med co loves with Harry Please go ahead.
Nightclubs is Harry your line is open. Please go ahead.
Alright.
Your line is open.
Please go ahead.
Hello.
Hello.
Yeah, Oh, Yeah, Oh, hi, Thanks management for sharing that I know that we're going to open for the hospitals and clinics in other regions and May I. Just clarify are we expecting any further assets that fast in the near future.
And how long are we going to ensure that our existing remaining hospitals and clinics are performing like hitting our performance guidance. Please. Thanks.
We don't have any further plan during the near future for any sort of.
Divesting or.
And could you. Please repeat your second question again.
Oh, yes, because this time for regarding the asset diverse it's because some of them are not performing how are and do we have any measures to make sure that all remaining assets are going to perform well.
Okay.
Actually based on the Paas Express also remaining hospital pulp.
Well you went though in the 2012 2021. So we have a very strongly confident that we can continue to maintain our pro forma but also remaining hospital are doing pop at the mall.
It's getting better. So we also believe that we can put more of our source and all our attention on those area. For example in the Guangdong Forum in Shanghai, a rational we believed after shutting down.
Not performing well.
Hospitals, so we have a more it has more sources on Tulsa assessing always because we had heard that remaining hospital real enhance those hospitals.
Better.
Pulled out some turnkey Oh this is what we're trying to do.
Additionally.
We also plan to put in some.
Paulson.
Yes.
Declaration as well as marketing on those we mainly Ah assisting hospital as well. So we believe that those office does the hospital will be our plan.
In the 2022.
Okay. Thanks management.
Thank you.
You had the conference back to Mr. Joe Smith for closing remarks.
Okay.
Thank you operator on behalf of our entire management team I want to thank everyone again for joining us today.
If you have any further questions. Please contact us through email I, Oh, they'll come to us.
Our original IR counsel.
With luxury.
At the Al Qaeda Glastonbury Dot Com, we appreciate your interest and support.
Medical International and look forward to speaking with you again next time.
Thank you.
I think Albert again.
Thank everyone again for attending aesthetic medical International's second quarter, and first half of 2021 earnings conference call.
This concludes our call today and we thank you all for listening in Goodbye.
Okay.
Okay.
[music].