Q2 2022 Aesthetic Medical International Holdings Group Ltd Earnings Call
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Thank you operator, and Hello, everyone. We are pleased to announce that the company has achieved positive business progress.
Speaker 2: Thank you, operator, and hello, everyone. We are pleased to announce that the company has achieved positive business progress despite the flagship 18 COVID-19 pandemic. Thanks, late March, two of our treatment centers in Shanghai were temporarily suspended operations for more than two months.
By the last year 18, COVID-19 pandemic since late March two of our shipments centers in Shanghai or temporarily suspended operations for more than two months. Upon the business resumption, we saw 138, 8% and 99, 6% recovery and the number of customers and cash sales.
Speaker 2: Upon the business resumption, we saw 138.8% and 99.6% recovery, the number of customers and cash sales in June respectively. Compared to March before the lockdown was in place. This was attributable to the...
In June respectively, compared to March before the Lockdown was in place. This was attributed to both to the <unk>.
Speaker 2: optimization of our marketing strategies, which online marketing channel and private domain reach were used to promote our brands and treatment packages. Overall, we recorded a steady business growth with revenue increased by 10% year-on-year and a narrowing net loss despite the business disruption in the Eastern Region.
<unk> vision of our marketing strategy with online marketing channel and private domain rich we're used to promote our brands and treatment packages. Overall, we record date steady business growth with revenue increased by 6% year on year and a narrower narrowing net loss despite the business.
Disruption in the eastern region.
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In terms of operation, we are dedicated to strengthening our management system and enhancing our services to become the size of our customers. During the period, we have been working with an experienced consulting team in order to establish our own customer relations.
Speaker 2: In terms of operation, we are dedicated to strengthening our management system and enhancing our services to become the choice of our customers during the period. We have been working with an experienced consulting team in order to establish our own customer relations, shift management.
Management system, which will be equipped with more comprehensive and precise function in the near future.
Speaker 2: which will be equipped with more comprehensive and precise functions in the near future.
Speaker 2: The first pilot run will be launched at Sen-Zhen Kong-Ai Show-Chi.
First pilots run will be launched essence, so itchy aesthetic medical hospital upon successful trial, we intend to implement the system across all treatment centers. We have also implemented new internal operational protocols by establishing new stand.
Speaker 2: As the medical hospital, upon the successful trial run, we intend to implement the system across all treatment centers.
Speaker 2: We have also implemented new internal operational protocols by establishing new standard operating procedures to ensure customers receive better and consistent services across these treatment centers.
Operating procedure to ensure customers receive better and consistent services across these treatment centers stopped training program. We also be offered to frontline employees include but not limited to recession customer services.
Speaker 2: Stop training program will also be offered to frontline employees, include but not limited to reception customer services, assist the medical practitioners and etc. We believe this measures would not only enhance the customer experience, but more importantly help us to improve our customer retention rate, laying a solid foundation for the company to replicate model and drive future growth and expansion.
The medical protection, yes.
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A solid foundation for the company to replicate our model and drive future growth and expansion.
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On July 14.
Speaker 1: July 14, 2022. We closed our first private placement with La Fang China, which was previously announced on May 31, 2022 after receiving aggregate growth proceeds of RMB 100 million. On July 20, 2022, we enter into another subscription agreement with Hai Nan, Arringto, Jiachong, investment partnership. We'll Jiachong agree to subscribe.
2022, we closed our first private placement with love on China.
<unk> was previously announced on May 31, 2022, after receiving aggregate gross proceeds of RMB 100 million on July 22022, we enter into another subscription agreement with high Na and <unk> home investment partnership royalty as agreed.
Thats correct.
Speaker 1: Thirty six million four hundred two thousand five hundred and seventy.
36 million <unk> hundred 2570.
Newly issued ordinary shares for the total consideration in USD.
Speaker 1: newly issued alternatives for the total consideration in USD that is equivalent of RMB 170 million.
Equivalent of RMB $170 million.
Both transactions are indicators of our business value and recognition by the market.
Speaker 1: Both transactions are indicators of our business value and recognition by the market.
Speaker 1: We believe this will improve our financial position in the near future.
We believe this will improve our financial position in the near future.
Speaker 1: If the second round of private placement can be completed by the fourth quarter of 2022, we are positive that our
If the second round of private placement can be completed by the fourth quarter of 2022, we are positive that hour.
Stockholders equity, we will meet the continued listing requirement on NASDAQ, which the company was informed being compliant on June six 2022.
Speaker 1: Stalk Holders FD will meet a continually seen requirement on the next act, which the company was informed being non-compliant on June 6, 2022.
We believe the.
The aforementioned strategies our company can further enhance our operating efficiency provide customers with better service and quality products, while delivering sustainable growth. Thank you again for your support and attention now I would like to turn the call to our associates Investor Relations Director Director.
Speaker 1: For mentioned strategies, our company can further enhance our operating efficiency, provide customers with better service and quality products while delivering sustainable growth. Thank you again for all your support and attention. Now I would like to turn the call to our associate investor-relation director, Derek, to introduce financials and operations for the first half of 2022.
To introduce the financials and operations for the first half of 2022.
Hello, everyone. This is derrick thank.
Speaker 1: Hello, everyone. This is Derek. Thank you, Dr. Zhou. And I will summarize some of the key on audit his financial results and operation results for the first half ended June 30, 2022.
Thank you Dr. Joe and I will summarize some of the key unaudited financial results and operation results for the first half ended June 32022 in the first half of 2022 total revenue increased 10, 6% year on year to RMB.
Speaker 1: In the first half of 2022, total revenue increased 10.6% year-on-year to R&B, 338.6 million, primary driven by the cells of the newly introduced dealers and equipment such as bio-stimulating dealer, Ilensee, high-end, hyaluronic acid dealer, Jureden Voluma, and body controlig husband equipment colliding 2.0.
$338 6 million, primarily driven by the sales of the newly introduced fillers and equipment such as files stimulating pillar <unk> high end hydrobromic acid, Beulah, Juvederm, maluma and body control equipment.
Equipment could sculpting 2.0.
Speaker 1: including the impact of the operations treatment centers, which were divested and ceased operation in 2022. Revenue from the non-search code aesthetic medical services in retained.
Excluding the impact of the operation treatment centers, which were divested and C or ceased operation in 2022 revenue wrong, the nonsurgical aesthetics medical services in routine.
Services.
In retain treatment centers increased by 86, 9% year on year.
Speaker 1: In retaining treatment centers increased by 86.9% year-on-year. Gross profit was RMB 188.7 million, representing an increase of 48.0% year-on-year. Gross profit margin was 55.7%. Compare with 41.6% in the first half of 2021.
Gross profit was RMB $188 7 million, representing an increase of 48.0% year on year gross profit margin was 55, 7% compared with 41, 6% in the first half of 2021.
Speaker 1: Selling expense were IB 111.7 million representing 33.0% of the company's total revenue in the first half of 2022. Selling expenses as a revenue decreased by 34.4%
Selling expenses were RMB 111, 7 million, representing 33, 33.0% of the company's total revenue in the first half of 2020 to selling expenses as our revenue decreased by 34, 4% point.
Year on year, the reduction in the selling expenses and its contribution was meaning as the result of the company's strategic shift from off market focus to a lower cost customer referral program to elevate.
Speaker 1: year-on-year. The reduction in the selling expenses and its contribution was meaning as the result of the company's strategic shift from of market focus to a lower cost customer referral problem to elevate the rising customer acquisition cost under the impact of COVID-19 pandemic and to maintain a relatively high return on investment.
The rising customer acquisition cost under the impact of COVID-19, pandemic and to maintain a relatively high return on investment.
Speaker 1: General and administrative expenses were RMB 65.6 million representing a decrease of 24.5%. Primarily due to the 16th can decrease in e-soft relative expenses as well as the divestment of underperforming assets in 2021.
General and administrative expenses were RMB $65 6 million, representing a decrease of 24, 5% primarily due to the significant decrease in <unk> related expenses as well as the divestment of the pro forma asset in 2021.
Speaker 1: As a result of the foregoing, the company narrowed the loss to RMB 3.7 million for the first half of 2022. Compare with the loss of RMB 407 T3.0 million in the first half of 2021. Basic and diluted loss per share were both loss of RMB.
As a result of the foregoing the company narrowed the loss to RMB three 7 million for the first half of 2022 compared with a loss of RMB 473.0 million in the first half of 2021 basic and diluted loss per share.
Both loss of RMB.
Speaker 1: 0.07 in the first half of 2022 compared with the basic and diluted loss pressure of R&B 5.97 in the first half of 2021
Zero seven in the first half of 2022, compared with basic and diluted loss per share of RMB 597 in the first half of 2021.
Speaker 1: EBITDA was RMB 44.8 million compared with the loss of RMB 415 million in the first half of 2021. Adjusted EBITDA was
EBITDA was <unk>.
<unk> $44 8 million compared with a loss of RMB $415 million in the first half of 2021 adjusted EBITDA was.
Speaker 1: R&B 58.0 million compared with the loss of R&B
RMB 58.0 million compared with a loss of RMB $93 1 million in the first half of 2022 <unk> hundred one.
Speaker 1: 93.1 million in the first half of 2021.
Speaker 1: Adjusted profit was RMB 9.5 million compared with the loss of RMB 151.1 million in the first half of 2021.
Adjusted profit was RMB nine 5 million compared with a loss of RMB $151 1 million in the first half of 2021 in terms of.
Speaker 1: in terms of operating performance, despite the decrease in the number of treatment centers and mandatory suspension of operations of several treatment centers due to the pandemic preventative measures in the first half of 2022.
Operating performance despite the decrease.
<unk> in the number of treatment centers and mandatory suspension of operations of several treatment centers due to the pandemic preventative measures in the first half of 2022.
Following the strategic restructuring in 2021, the company will record.
Speaker 1: following the strategic restructuring in 2021. The company will record
Speaker 1: The company still recorded an increase of 1.7% year-on-year in the total active customers. It is worth noting that the number of repeat customers increased by 11.4%, showcase the effectiveness of the company's cross-selling strategies, and re-engage the active customers.
The company still record date, an increase of one 7% year on year in the total active customers. It is worth noting that the number of repeat customers increased by 11, 4% showcase the effectiveness of the company's cross selling strategies and to re engage.
<unk> active customers.
Speaker 1: The increase in the total active customers demonstrated the success of the company's restructuring plan through which is able to retain quality assets as well as its highly loyal and active customers.
The increase in the total FTE customers demonstrated the success of the Companys restructuring plan through which is able to retain quality assets as well as his highly loyal and active customers.
Speaker 1: for the number of treatments, despite the decrease in the number of treatment centers and mandatory suspension of operations of several treatment centers due to the pandemic.
The number of treatments. Despite this decrease in the number of treatment centers and mandatory suspension of operations of several treatment centers due to the pandemic preventative requirements in the first half of 2022.
Speaker 1: preventative requirements in the first half of 2022. The company recorded an increase in the number of treatments of 30.2 year-on-year. And the number of treatments in retained treatment centers increased by 68.1 year-on-year.
Company recorded and increasing the number of treatments of 32 year on year and the number of treatments in routine treatment centers increased by $68 one year on year on year. The increase was primarily driven by the increasing demand for non surgical aesthetic medical.
Speaker 1: The increase was primarily driven by the increasing demand.
Speaker 1: for non-surgical aesthetic medical treatments among the young generation, as well as the effectiveness of the companies cross-selling strategies and discounted package promotion.
Among the young generation as well as the effectiveness of the company's cross selling strategies and discounted packaged promotion total number of non surgical asset in medical treatment as a percentage of the total number of aesthetic treatment increased by 7.0 P standpoint.
Speaker 1: Total number of non-searchical acetymedical treatments as the percentage of the total number of acetyc treatment increased by 7.0 percent point.
Speaker 1: percentage points. Average spending per customer increased by 8.8% from R&B to 1,800 and 3 in the first half of 2021 to R&B 348 in the first half of 2022.
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Rich spending per customer increased by eight 8% from RMB.
<unk> thousand 800, <unk> III in the first half of 2021 to RMB 348 in the first half of 2022.
As of June June 32022, cash and cash equivalents were RMB two.
Speaker 1: as of June 30th, 2022, cash and cash equipment were on the 26.2 million. Looking ahead, we continue to execute our strategies throughout the year. This is not only to provide better and quality services to our customers, but provide sustainable growth to our shareholders. This concludes our prepared remarks.
$26 2 million looking ahead, we continue to execute our strategies throughout the year. This is not only to provide a better and quality services to our customers, but provide sustainable growth to our shareholders. This concludes our prepared remarks.
Speaker 1: Thank you for joining us on today's call. We will now open the call to questions. Operator, please go ahead. Thank you. If you wish to ask.
Thank you for joining us on today's call. We will now open the call to questions.
Operator, Please go ahead.
Thank you if you wish to ask a question you will need to press star one on your telephone and wait for your name to be Amar.
Speaker 3: one and one on your telephone and wait for your name to be in
Once again, if you wish to ask a question. Please press star and one on your telephone.
Speaker 3: Once again if you wish to ask a question, please press star 1 and 1 on your telephone. Please stand by while we compile the Q&A roster.
Standby, while we compile the Q&A roster.
And Keith we will take our first question.
Please standby.
Okay.
Speaker 3: And your first question comes from the line of Amos Alvidam from DLK Advisory. Please ask your question.
And your first question comes from the line of aim must also Tom <unk> from.
The outcome of the advisory please ask your question.
Yeah.
Hello.
Speaker 1: Hello, can you hear me? Oh hi, hi, yeah, we can hear you.
Hello can you hear me.
Hi, Yeah, we can hear you.
Okay. Thank you for the presentation very informative.
Speaker 4: Okay, thank you for the presentation. Very informative. But I would like to know is the company plans to further digest three shipment centers this year. I want to know what are the details of this disposal or the treatment centers that are being disposed. Are they all lost making?
But.
I would like to know is.
The company plans to further divest III shipments centers this year.
I wanted to know what are the details of this disposal.
The strictness answers that being disposed of are they all loss, making.
Yes.
Speaker 1: As you can see, we have a strategy. Our business will focus on Shanghai and the Greatest Barbase area.
You can see that we have a strategy.
Our business forecast, our Shanghai and the great <unk> area.
Speaker 1: That's why three of these hospitals are not in those areas. This is the first one. Second reason is, yes, you are right. Those hospitals are lost making.
That's why it's three of these hospitals are in those area.
This is our first one second reason is yes, you're right <unk> has been always a lossmaking that's why we just.
Speaker 1: That's why we just want to dispose of them.
Just wanted to dispose of them, but luckily, we still sell at what price.
Speaker 1: But luckily we still sell at good prices. We will have above 4 million and we will catch coming in for this to create this proposal.
About 4 million RMB real cash coming in for a visit to create this proposal.
Speaker 4: Okay, I see. Well, follow the question. May I know where the company will continue to do more disposal, going forward?
Okay I see.
Follow up question my annual winter.
The company will.
You too.
Do more disposal going forward.
Speaker 1: I don't think so because we now we have a return of those hospitals on hand.
I don't think so because now we have a re.
10.
Hospital Ham.
Speaker 1: Those are most of them are making profits. So it's profitable. This is the first one. Second one also those are possible. Hospital in our strategy will be on the Shanghai or even on the Great Tabar, they will that's right. It's a fulfill our strategy. So we will make those hospitals become much better and better in the future.
Both of them most of them.
PA base. So its a pocketable. This is our first one second one also.
Hotspot hospitality in our strategy will be on the Shanghai or on the great top up a rare thats why is helpful. Here our strategy. So we will make those hospital become much better and better in the future.
Thank you just another follow up question.
Speaker 4: Thank you. Just another follow-up question. We are disposing the treatment centers, but will we eventually add any new clinics, any satellite clinics in the pipeline? If so, how many and where will they, where will AIH situate these satellite clinics?
We are disposing.
Chicken incentives, but we eventually add any new clinics and he sounded like clinics in the pipeline.
If so how many and when will they.
Yeah rich.
Situate these.
It sounded like cleaning.
Thank you for your question.
Speaker 1: Thank you for your question. We have one satellite clinic now.
We have.
One satellite clinic now.
Speaker 1: within the group which is located in Fujian, this is the Sun Zhen. And its name is Sun Zhen Miao Ye, as a medical clinic. And...
Within the group, which is located in the state.
And its name is.
Since the Emilia aesthetic medical clinic and we.
Speaker 1: We don't have a plan to establish further set of electronics.
We don't have.
Plans to establish further satellite clinics.
Speaker 1: within a certain time, within, for example, one year. But we do fancy to establish more standardized satellite clinics in the future, starting from...
We are seeing a certain time within for example, one year, but we do plan to establish more standardized.
Satellite clinics in the future starting from.
Speaker 1: 2024 to two thousand and Thirty.
2024 to 2030.
Speaker 1: and the total number of set-track techniques we expect to establish is around 80. OK. Hi, 52.
And the total number of Seth recognition, we expect three steps established is around 80.
Colby I'll answer your question. Thank you.
Yeah.
Thank you once again, if you wish to ask a question. Please press star one on your telephone.
Speaker 3: Thank you once again if you wish to ask a question please press star one and one on your telephone.
Speaker 3: And the question comes from the line of Emily Lee from IGWT. Capital, please ask your question.
And the question comes from the line of Emily Lee from <unk> capital. Please ask your question.
Speaker 5: Oh, hi. Congratulations to company that our laws has been narrowed. And I have one question that would like to ask. Our company has entered into a share subscription agreement with Highland Oriental. May I expect, do we expect any synergies or benefits for the company, please? Thank you. Emily, for your question.
Oh hi.
Congratulations to accompany that.
Loss has been narrowed and I have one question that would like US our company has entree into share subscription agreement with Hainan oriented.
May I expect do we expect any synergies or benefits for the company. Please thank you.
Thank you Emily for your question.
The.
The share subscription agreement with China Oriental Israeli investment.
Speaker 1: Subture subscription agreement with Hainan Oriental Geographic Geographic investment brings the SOP and operating management experience.
Brian .
S OPM operating management experience.
Speaker 1: To us, for example, the SOP can help us.
For example, the <unk>.
<unk> can help us.
To standardize our.
Speaker 1: to standardize our medical and operating procedures. And they also have the training programs for different...
Medical and operating procedures and they also have the training program for different.
Like different people for example, the <unk>.
Speaker 1: like different people, for example, the front deck and the selling employees or other operating managers. So, and
And Darling employees or other operating managers.
And in another.
On the other hand there.
Speaker 1: On the other hand, they also have the ability to produce the upstream products like the post-invasive treatment mark. And we have taken...
Also have the ability to produce the upstream products like the post <unk>.
Invasive treatment and we have.
Taken the.
So.
Speaker 1: Quijole agency to take a trial to see the effect of these masks. And we invited 40 customers to the trial.
Agency to take us trial to see the effect of this month and we invite need 40 customers to the trial.
Speaker 1: and they gave us some positive and both positive and negative feedback. So we will keep improving the skin care products with high-line biotron. So these two aspects are the synergies.
And they gave us some policies and both positive and negative feedback so we will keep improving.
Like skincare products.
Hi, <unk>.
So these two.
Aspect or the.
Synergies between two parties.
Thank you.
Yeah.
Speaker 5: Okay, so we are going to have the mask
Okay. So we're going to have to mark hoppe with them the desk I'm talking about.
Speaker 5: I'm talking about the SOP, which tells us more about how much to reinvest into the system.
Okay.
Tell us more about how much do we invest into it.
System test.
Okay.
Speaker 1: SOP is an idea that we would like.
Yes ESOP.
If an idea that we route.
Like.
A former standard behaviors for all employees.
Speaker 1: form a standard behaviors for all employees.
Speaker 1: We will review every medical behaviors and operating behaviors and then find a fast solution for both behaviors and then we story in our database.
We will review every medical behaviors and operates and behaviors.
And then find the best solution for both behaviors and then we story in our database.
Speaker 1: Based on the SOP information or database, we will shrink our...
Based on the information our database, we will train hour.
Speaker 1: employees with the standard dice, uh, with the standard dice view. And yeah, that's
Employees with the standardized.
With a standardized SKU.
And.
Yes.
We started to.
Speaker 1: operate the SOP program since September 2021. So we are still exploring and optimizing the...
Operator.
<unk> program since September .
2021.
So we are still exploring and.
Optimizing the <unk> system.
Speaker 1: Okay, thank you. Yeah, thank you. We hope.
And we say thank you. Thank you we hope.
With the help of <unk>.
Speaker 1: with the help of SOP, we would enter a positive cycle to
Enter a positive cycle too.
Speaker 1: to optimize our profit. Thank you.
Uh huh.
To optimize our prop.
Profit thank you.
Thank you everyone for attending aesthetic medical International first half of 2022 earnings Conference call.
Speaker 3: Thank you everyone for attending a aesthetic medical international first half of 2022 earnings conference call. This concludes our call today and we thank you all for listening in. Goodbye.
Concludes our call today, and we thank you Sydney and good.
Goodbye.
Thank you bye bye.