Aesthetic Medical International Holdings Group Limited (Nasdaq:
AIH) (the “Company” or “AIH”), a leading provider of aesthetic
medical services in China, today announced its unaudited financial
results for the second quarter and first half of 2021.
Dr. Zhou Pengwu, Chairman and CEO of the
Company, commented, “We are pleased to see an encouraging result in
this quarter in terms of (1) operational and financial results, (2)
strategic restructuring plan, and (3) our development in the field
of non-surgical aesthetic medical services. As the impact of
COVID-19 has been gradually receding in mainland China, the public
has resumed their daily activities, as well as their consumption of
aesthetic medical services. Supported by the recovery of market
demand, the number of our active customers in the first half of
2021 increased by 21.7% year-over-year (“yoy”), which drove the
revenue growth of 68.6% yoy and the gross profit margin improvement
of 8.4 percentage point in the first half of 2021. Adjusted EBITDA
also rebounded from loss in the first half of 2020 to profit in the
first half of 2021.”
Dr. Zhou continued, “We highly value the
importance of sustainable growth and have been contemplating a
strategic restructuring plan. Specifically, we plan to cease the
operations of or divest certain hospitals and clinics that either
are located in our non-core markets or did not meet our internal
performance requirements before the end of this year. By ceasing
the operations of or divesting these underperforming hospitals and
clinics that hindered our financial performance, we can focus on
realizing the full potential of the retained assets. We assessed
the value of these hospitals and clinics, which was recorded as a
non-operating and non-cash impairment loss in the second quarter of
2021. We believe that this is an essential step towards a healthier
financial result in the future.”
Dr. Zhou further explained, “Our non-surgical
aesthetic medical clinic in Beijing, which opened in the first half
of 2021, has achieved outstanding performance with an average
monthly revenue of over RMB1.0 million in this quarter, and has
realized satisfying net profit margin. We also target to open three
similar satellite clinics towards the end of this year. We believe
that our non-surgical aesthetic medical business model could ride
on the development of the aesthetic market and contribute to the
future growth of our business.”
Second Quarter of 2021 Unaudited
Financial Highlights
- Total
revenue was RMB224.0 million (US$34.7 million), representing an
increase of 34.4% from RMB166.7 million in the second quarter of
2020.
- Gross
profit was RMB133.6 million (US$20.7 million), representing an
increase of 40.3% from RMB95.2 million in the second quarter of
2020.
- Gross
margin was 59.6%, representing an increase of 2.5 percentage points
from 57.1% in the second quarter of 2020.
- Adjusted EBITDA1
for the period was a profit of RMB14.7 million (US$2.3 million),
compared with a loss of RMB1.0 million in the second quarter of
2020.
First Half of 2021 Unaudited Financial
Highlights
- Total
revenue was RMB434.5 million (US$67.3 million), representing an
increase of 68.6% from RMB257.7 million in the same period of
2020.
- Gross
profit was RMB255.8 million (US$39.6 million), representing an
increase of 96.6% from RMB130.1 million in the same period of
2020.
- Gross
margin was 58.9%, representing an increase of 8.4 percentage points
from 50.5% in the same period of 2020.
-
Adjusted EBITDA1 for the period was a profit of RMB35.2 million
(US$5.5 million), compared with a loss of RMB46.7 million in the
same period of 2020.
1 Adjusted EBITDA is not prepared in accordance
with International Financial Reporting Standards as issued by the
International Accounting Standards Board, or IFRS. For more
information regarding non-IFRS financials, please refer to
“Non-IFRS Financial Measures” and “Reconciliations of IFRS and
Non-IFRS Results” appearing elsewhere in this press release.
Second Quarter of 2021 Operational
Highlights
|
For the Three Months Ended June 30, |
|
2020 |
|
2021 |
|
|
|
Number |
|
% of Total |
|
Number |
|
% of Total |
|
Change |
New Customers |
26,762 |
|
40.3% |
|
24,612 |
|
38.7% |
|
-8.0% |
Repeat Customers |
39,582 |
|
59.7% |
|
38,926 |
|
61.3% |
|
-1.7% |
Total Active Customers |
66,344 |
|
100.0% |
|
63,538 |
|
100.0% |
|
-4.2% |
- Repeat
customers, defined as active customers who had previously received
at least one treatment from the Company, accounted for 61.3% of the
Company’s active customer base in the second quarter of 2021.
- The
total number of active customers was 63,538, representing a
decrease of 4.2% from 66,344 in the second quarter of 2020, as the
Company shifted its marketing strategies from conducting diverse
promotions during the COVID-19 pandemic in the second quarter of
2020, to launching a more balanced and attractive product matrix in
the second quarter of 2021.
-
Average spending per customer increased by 40.3% from RMB2,513 in
the second quarter of 2020 to RMB3,525 in the second quarter of
2021, as more advanced products are sold in the second quarter of
2021.
- In the
second quarter of 2021, the Company performed a total of 137,748
treatments, including 22,413 surgical treatments and 115,335
non-surgical treatments, representing an increase of 1.5%, a
decrease of 1.3% and an increase of 2.1%, respectively, from
135,662 total treatments, 22,700 surgical treatments and 112,962
non-surgical treatments in the second quarter of 2020.
First Half of 2021 Operational
Highlights
|
For the Six Months Ended June 30, |
|
2020 |
|
2021 |
|
|
|
Number |
|
% of Total |
|
Number |
|
% of Total |
|
Change |
New Customers |
41,144 |
|
40.0% |
|
48,169 |
|
38.5% |
|
+17.1% |
Repeat Customers |
61,793 |
|
60.0% |
|
77,092 |
|
61.5% |
|
+24.8% |
Total Active Customers |
102,937 |
|
100.0% |
|
125,261 |
|
100.0% |
|
+21.7% |
- In the
first half of 2021, repeat customers accounted for 61.5% of our
active customer base. The total number of active customers was
125,261, representing an increase of 21.7% from 102,937 in the same
period of 2020. This is mainly because the impact of COVID-19 has
gradually receded in the first half of 2021.
- In the
first half of 2021, the Company performed a total of 270,424
treatments, including 45,238 surgical treatments and 225,186
non-surgical treatments, representing an increase of 33.5%, 21.5%
and 36.2%, respectively, from 202,608 total treatments, 37,241
surgical treatments and 165,367 non-surgical treatments in the
first half of 2020.
Second Quarter of 2021 Unaudited
Financial Results
|
|
For the Three Months Ended June 30, |
(RMB millions, except per share data and percentages) |
|
2020 |
|
|
2021 |
|
|
Change |
Revenue |
|
166.7 |
|
|
224.0 |
|
|
+34.4 |
% |
Non-surgical aesthetic medical services |
|
82.8 |
|
|
117.0 |
|
|
+41.3 |
% |
Minimally invasive aesthetic treatments |
|
42.4 |
|
|
56.6 |
|
|
+33.5 |
% |
Energy-based treatments |
|
40.4 |
|
|
60.4 |
|
|
+49.5 |
% |
Surgical aesthetic medical services |
|
71.3 |
|
|
91.2 |
|
|
+27.9 |
% |
General healthcare services and other aesthetic medical
services |
12.6 |
|
|
15.8 |
|
|
+25.4 |
% |
Gross profit |
|
95.2 |
|
|
133.6 |
|
|
+40.3 |
% |
Gross margin |
|
57.1 |
% |
|
59.6 |
% |
|
+2.5 p.p.* |
Impairment of goodwill |
|
- |
|
|
(111.6 |
) |
|
N.A. |
Impairment of intangible asset |
|
- |
|
|
(43.7 |
) |
|
N.A. |
Impairment of property, plant and equipment |
|
- |
|
|
(139.8 |
) |
|
N.A. |
|
|
|
|
|
|
|
EBITDA** |
|
(34.3 |
) |
|
(294.9 |
) |
|
-759.8 |
% |
Adjusted EBITDA** |
|
(1.0 |
) |
|
14.7 |
|
|
+1,570.0 |
% |
Adjusted EBITDA margin |
|
(0.6 |
)% |
|
6.6 |
% |
|
+7.2p.p.* |
|
|
|
|
|
|
|
Loss for the period |
|
(64.4 |
) |
|
(324.5 |
) |
|
-403.9 |
% |
Adjusted loss** |
|
(31.1 |
) |
|
(14.9 |
) |
|
52.1 |
% |
Adjusted loss margin |
|
(18.7 |
)% |
|
(6.7 |
)% |
|
+12.0p.p.* |
Notes:* p.p. represents percentage points**Refer
to below “Non-IFRS Financial Measures”
Revenues
Total revenue was RMB224.0 million (US$34.7
million), representing an increase of 34.4% from RMB166.7 million
in the second quarter of 2020, primarily due to the recovery of
economic activities and customers’ demands and purchasing power in
mainland China, together with the Company’s effort to boost
sales.
Revenue from non-surgical aesthetic medical
services was RMB117.0 million (US$18.1 million), representing an
increase of 41.3% from RMB82.8 million in the second quarter of
2020.
Revenue from minimally invasive aesthetic
treatments was RMB56.6 million (US$8.8 million), representing an
increase of 33.5% from RMB42.4 million in the second quarter of
2020.
Revenue from energy-based treatments was RMB60.4
million (US$9.4 million), representing an increase of 49.5% from
RMB40.4 million in the second quarter of 2020.
Revenue from surgical aesthetic medical services
was RMB91.2 million (US$14.1 million), representing an increase of
27.9% from RMB71.3 million in the second quarter of 2020.
Revenue from general healthcare services and
other aesthetic medical services was RMB15.8 million (US$2.4
million), representing an increase of 25.4% from RMB12.6 million in
the second quarter of 2020.
Cost of sales and services
rendered
Cost of sales and services rendered was RMB90.4
million (US$14.0 million), representing an increase of 26.4% from
RMB71.5 million in the second quarter of 2020, primarily as a
result of significant growth in total revenue.
Gross profit
Gross profit was RMB133.6 million (US$20.7
million), representing an increase of 40.3% from RMB95.2 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 2.5 percentage points from 57.1% in the second quarter
of 2020, mainly due to more higher margin services and products
sold during the second quarter of 2021.
Gross profit of non-surgical aesthetic medical
services was RMB68.6 million (US$10.6 million), representing an
increase of 48.8% from RMB46.1 million 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 was RMB32.6 million (US$5.0 million), representing an
increase of 26.8% from RMB25.7 million in the second quarter of
2020. Gross profit margin was 57.6%, compared with 60.6% in the
second quarter of 2020.
Gross profit of energy-based treatments was
RMB36.0 million (US$5.6 million), representing an increase of 76.5%
from RMB20.4 million in the second quarter of 2020. Gross profit
margin was 59.6%, compared with 50.7% in the second quarter of
2020.
Gross profit of surgical aesthetic medical
services was RMB55.4 million (US$8.6 million), representing an
increase of 33.8% from RMB41.4 million in the second quarter of
2020. Gross profit margin was 60.7%, compared with 58.1% in the
second quarter of 2020.
Gross profit of general healthcare services and
other aesthetic medical services grew significantly, from RMB7.7
million in the second quarter of 2020 to RMB9.6 million (US$1.5
million) in the second quarter of 2021. Gross profit margin was
60.8%, compared with 61.3% in the second quarter of 2020.
Selling expenses
Selling expenses were RMB112.3 million (US$17.4
million), representing 50.1% of the Company’s total revenue of the
same period, compared to selling expenses of RMB92.5 million in the
second quarter of 2020, which represented 55.5% of the Company’s
total revenue of the same period. Selling expenses increased on a
year-over-year basis, primarily because the Company launched more
marketing initiatives after it gradually resumed operations in the
second quarter of 2021.
General and administrative
expenses
General and administrative expenses were RMB44.8 million (US$6.9
million), representing a decrease of 21.3% from RMB56.9 million in
the second quarter of 2020, primarily due to the decrease of
RMB11.4million (US$1.8 million) in ESOP related expenses.
Impairment of good will, intangible assets and property,
plant and equipment
Impairment of goodwill was RMB111.6 million (US$17.3 million),
compared with nil in the same period of 2020.
Impairment of intangible assets was RMB43.7 million (US$6.8
million), compared with nil in the same period of 2020.
Impairment of property, plant and equipment was RMB139.8 million
(US$21.7 million), compared with nil in the same period of
2020.
The Company incurred impairments during the second quarter of
2021, primarily due to its strategic restructuring. The change of
these three items were primarily because the Company has performed
impairment assessments at cash-generating unit level and noted
several recoverable amounts were lower than their carrying amounts
for certain cash-generating units. Relevant impairments are
non-operating and non-cash items.
Loss for the period
As a result of the foregoing, the Company
recorded a loss of RMB324.5 million (US$50.3 million) for the
second quarter of 2021, compared with a loss of RMB64.4 million in
the second quarter of 2020. Basic loss per share was RMB3.58
(US$0.55), compared with basic loss per share of RMB0.95 in the
second quarter of 2020. Diluted loss per share was RMB3.58
(US$0.55), compared with diluted loss per share of RMB0.95 in the
second quarter of 2020.
Certain Non-IFRS items
EBITDA for the second quarter of 2021 was a loss
of RMB294.9 million (US$45.7 million), compared with a loss of
RMB34.3 million in the second quarter of 2020.
Adjusted loss for the second quarter of 2021 was
RMB14.9 million (US$2.3 million), compared with an adjusted loss of
RMB31.1 million in the second quarter of 2020.
Adjusted EBITDA for the second quarter of 2021
was a profit of RMB14.7 million (US$2.3 million), compared with a
loss of RMB1.0 million in the second quarter of 2020.
EBITDA, Adjusted EBITDA and Adjusted loss are
not prepared in accordance with International Financial Reporting
Standards as issued by the International Accounting Standards
Board, or IFRS. For more information regarding non-IFRS financials,
please refer to “Non-IFRS Financial Measures” and “Reconciliations
of IFRS and Non-IFRS Results” appearing elsewhere in this press
release.
First Half of 2021 Unaudited Financial
Results
|
|
For the Six Months Ended June 30, |
(RMB millions, except per share data and percentages) |
|
2020 |
|
|
2021 |
|
|
Change |
Revenue |
|
257.7 |
|
|
434.5 |
|
|
+68.6 |
% |
Non-surgical aesthetic medical services |
|
130.5 |
|
|
226.0 |
|
|
+73.2 |
% |
Minimally invasive aesthetic treatments |
|
68.5 |
|
|
108.4 |
|
|
+58.2 |
% |
Energy-based treatments |
|
62.0 |
|
|
117.6 |
|
|
+89.7 |
% |
Surgical aesthetic medical services |
|
111.1 |
|
|
178.1 |
|
|
+60.3 |
% |
General healthcare services and other aesthetic medical
services |
16.1 |
|
|
30.4 |
|
|
+88.8 |
% |
Gross profit |
|
130.1 |
|
|
255.8 |
|
|
+96.6 |
% |
Gross margin |
|
50.5 |
% |
|
58.9 |
% |
|
+8.4p.p.* |
Impairment of goodwill |
|
- |
|
|
(111.6 |
) |
|
N.A. |
Impairment of intangible asset |
|
- |
|
|
(43.7 |
) |
|
N.A. |
Impairment of property, plant and equipment |
|
- |
|
|
(139.8 |
) |
|
N.A. |
|
|
|
|
|
|
|
|
EBITDA** |
|
(104.9 |
) |
|
(286.7 |
) |
|
-173.3 |
% |
Adjusted EBITDA** |
|
(46.7 |
) |
|
35.2 |
|
|
+175.4 |
% |
Adjusted EBITDA margin |
|
(18.1 |
)% |
|
8.1 |
% |
|
+26.2p.p.* |
|
|
|
|
|
|
|
Loss for the period |
|
(147.5 |
) |
|
(344.7 |
) |
|
-133.7 |
% |
Adjusted loss** |
|
(89.3 |
) |
|
(22.8 |
) |
|
+74.5 |
% |
Adjusted loss margin |
|
(34.7 |
)% |
|
(5.2 |
)% |
|
+29.5p.p.* |
Notes:* p.p. represents percentage points**Refer
to below “Non-IFRS Financial Measures”
Revenues
Total revenue was RMB434.5 million (US$67.3
million), representing an increase of 68.6% from RMB257.7 million
in the same period of 2020, primarily due to the recovery of
economic activities and customers’ demands and purchasing power in
mainland China, together with the Company’s effort to promote
sales.
Cost of sales and services
rendered
Cost of sales and services rendered was RMB178.7
million (US$27.7 million), representing an increase of 40.0% from
RMB127.6 million in the same period of 2020, primarily as a result
of significant growth in total revenue.
Gross profit
Gross profit was RMB255.8 million (US$39.6
million), representing an increase of 96.6% from RMB130.1 million
in the same period of 2020, primarily as a result of significant
growth in total revenue. Gross profit margin was 58.9%,
representing an increase of 8.4 percentage points from 50.5% in the
same period of 2020, mainly due to more services and products with
higher profit margin sold during this period.
Gross profit of non-surgical aesthetic medical
services was RMB129.4 million (US$20.0 million), representing an
increase of 104.7% from RMB63.2 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 was RMB60.2 million (US$9.3million), representing an
increase of 65.8% from RMB36.3 million in the same period of 2020.
Gross profit margin was 55.5%, compared with 53.4% in the same
period of 2020.
Gross profit of energy-based treatments was
RMB69.2 million (US$10.7 million), representing an increase of
159.2% from RMB26.7 million in the same period of 2020. Gross
profit margin was 58.8%, compared with 43.1% in the same period of
2020.
Gross profit of surgical aesthetic medical
services was RMB108.5 million (US$16.8 million), representing an
increase of 83.6% from RMB59.1 million in the same period of 2020.
Gross profit margin was 60.9%, compared with 53.2% in the same
period of 2020.
Gross profit of general healthcare services and
other aesthetic medical services grew significantly, from RMB7.8
million in the same period of 2020 to RMB17.9 million (US$2.8
million) in the same period of 2021. Gross profit margin was 58.9%,
compared with 48.4% in the same period of 2020.
Selling expenses
Selling expenses were RMB206.3 million (US$32.0
million), representing 47.5% of the Company’s total revenue of the
same period, compared to selling expenses of RMB170.5 million in
the same period of 2020, which represented 66.2% of the Company’s
total revenue of the same period. Selling expenses increased on a
year-over-year basis, primarily because the Company launched more
marketing initiatives after it gradually resumed operations in the
second quarter of 2021.
General and administrative
expenses
General and administrative expenses were RMB86.9
million (US$13.5 million), representing a decrease of 19.4% from
RMB107.8 million in the same period of 2020, primarily due to the
decrease of RMB21.7million (US$3.4 million) in ESOP related
expenses.
Impairment of goodwill, intangible
assets and property, plant and equipment
Impairment of goodwill was RMB111.6 million
(US$17.3 million), compared with nil in the same period of
2020.
Impairment of intangible assets was RMB43.7
million (US$6.8 million), compared with nil in the same period of
2020.
Impairment of property, plant and equipment was
RMB139.8 million (US$21.7 million), compared with nil in the same
period of 2020.
The Company incurred impairments during the
first half of 2021, primarily due to its strategic restructuring.
The change of these three items were primarily because the Company
has performed impairment assessments at cash-generating unit level
and noted several recoverable amounts were lower than their
carrying amounts for certain cash-generating units. Relevant
impairments are non-operating and non-cash items.
Loss for the period
As a result of the foregoing, the Company
recorded a loss of RMB344.7 million (US$53.4 million) for the six
months ended June 30, 2021, compared with a loss of RMB147.5
million in the same period of 2020. Basic loss per share was
RMB3.92 (US$0.61), compared with basic loss per share of RMB2.17 in
the same period of 2020. Diluted loss per share was RMB3.92
(US$0.61), compared with diluted loss per share of RMB2.17 in the
same period of 2020.
Certain Non-IFRS items
EBITDA for the six months ended June 30, 2021
was a loss of RMB286.7 million (US$44.4 million), compared with a
loss of RMB104.9 million in the same period of 2020.
Adjusted loss for the six months ended June 30,
2021 was RMB22.8 million (US$3.5 million), compared with adjusted
loss of RMB89.3 million in the same period of 2020.
Adjusted EBITDA for the six months ended June
30, 2021 was a profit of RMB35.2 million (US$5.5 million), compared
with a loss of RMB46.7 million in the same period of 2020.
EBITDA, Adjusted EBITDA and Adjusted loss are
not prepared in accordance with International Financial Reporting
Standards as issued by the International Accounting Standards
Board, or IFRS. For more information regarding non-IFRS financials,
please refer to “Non-IFRS Financial Measures” and “Reconciliations
of IFRS and Non-IFRS Results” appearing elsewhere in this press
release.
Certain balance sheet item
Cash and cash equivalents were RMB47.2 million
(US$7.3 million) as of June 30, 2021, compared to RMB44.4 million
as of December 31, 2020.
Certain cash flow items
Net cash generated from operating activities was
RMB58.3 million (US$9.0 million) for the six months ended June 30,
2021, compared with a cash outflow of RMB47.7 million for the six
months ended June 30, 2020.
Net cash used in investing activities was
RMB34.1 million (US$5.3 million) for the six months ended June 30,
2021, compared with a cash outflow of RMB43.7 million for the six
months ended June 30, 2020.
Net cash used in financing activities was
RMB21.3 million (US$3.3 million) for the six months ended June 30,
2021, compared with a cash inflow of RMB13.4 million for the six
months ended June 30, 2020.
Liquidity and capital
resources
As at June 30, 2021, the Company had net current
liabilities of RMB167.9 million which included current borrowings
of RMB150.3 million.
Management has prepared a cash flow projection
covering a period of 12 months from the issuance date of this press
release. The cash flow projection has taken into account the
anticipated cash flows to be generated from the Company’s future
operations after the proposed restructuring, including
considerations of reasonably possible changes in its operating
performance, and available financing during the period under
projection, including an equity financing from a share
subscription, the closing of which is currently under negotiation,
and additional bank loans.
Based on the above, the directors of the Company
concluded that the Company has sufficient financial resources to
meet its financial obligations as and when they fall due and
continue its operations in the coming 12 months after the issuance
date of this press release, subject to any uncertainty, such as the
resurgence of COVID-19 in mainland China.
Exchange Rate
This press release contains translations of
certain Renminbi (RMB) amounts into U.S. dollars (US$) solely for
the convenience of the reader. Unless otherwise specified, all
translations of Renminbi amounts into U.S. dollar amounts in this
press release are made at RMB6.4566 to US$1.00, which was the U.S.
dollars middle rate announced by the Board of Governors of the
Federal Reserve System of the United States on June 30, 2021.
Non-IFRS Financial Measures
EBITDA represents our loss before income tax,
adjusted to exclude finance costs and amortization and
depreciation. Adjusted EBITDA represents EBITDA, adjusted to
exclude fair value loss of convertible note, fair value gain of
contingent consideration payable, share-based compensation expense,
professional fees and other non-operating expenses, including the
impairment of non-current assets.
Adjusted loss represents loss for the period,
adjusted to exclude fair value loss of convertible note, fair value
gain of contingent consideration payable, share-based compensation
expense, professional fees and other non-operating expenses,
including the impairment of non-current assets.
EBITDA, adjusted EBITDA and adjusted loss are
non-IFRS financial measures. You should not consider EBITDA,
adjusted EBITDA and adjusted loss as a substitute for or superior
to net income prepared in accordance with IFRS. Furthermore,
because non-IFRS measures are not determined in accordance with
IFRS, they are susceptible to varying calculations and may not be
comparable to other 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.
The Company presents EBITDA, adjusted EBITDA and
adjusted loss as supplemental performance measures because it
believes that such measures provide useful information to the
investors in understanding and evaluating the Company’s results of
operations, and facilitate operating performance comparisons from
period to period.
Recent Developments
In the first half of 2021, the Company opened a
clinic in Beijing, which focused on non-surgical aesthetic medical
services. Despite the limited period of operation, the Beijing
clinic contributed an average monthly revenue of approximately RMB
1.0 million during the second quarter of 2021, and has started to
generate net profit. The Company expects the Beijing clinic will
continue the growth momentum in the third quarter of 2021.
On May 16, 2021, the Company entered into a
definitive share subscription agreement with Lafang China Co., Ltd.
(“Lafang”). The private placement is subject to customary closing
conditions, and the Company is in active discussion with Lafang in
order to facilitate the closing of the transaction. The Company
intends to utilize the proceeds on business development and as
general working capital.
During the first half of 2021, the Company
carried out a strategic restructuring plan to optimize its
resources and enhance its operating efficiency. On November 8,
2021, the board of directors of the Company approved its proposal
to divest certain hospitals and clinics, which are either located
in non-core markets, or did not meet the Company’s internal
performance requirement. Total revenue contributed by the assets
subject to divestiture accounted for about 11% of total revenue for
the first half of 2021. The Company believes that the restructuring
plan is an essential move to improve its operations and solidify
its leading position in the market. After the successful
divestiture, the overall profitability of the retained hospitals
and clinics are expected to improve, thus ensuring a healthier
financial performance in the long run.
Although sporadic COVID-19 cases are detected
from time to time in mainland China, economic activities in regions
where AIH operates have not been materially affected. The Company’s
hospitals and clinics are implementing necessary precautions,
including temperature check for employees and disinfection of
premises, to secure a hygienic environment for both staff and
customers.
Business Outlook
The Company is in the process of ceasing the
operations of or divesting several underperformed hospitals and
clinics, and expects the process to be completed by the end of this
year. At the same time, the Company will continue to focus on
renovating its existing flagship hospitals. The Company plans to
focus on the core regional market, i.e. the Guangdong-Hong
Kong-Macao Greater Bay Area and the Yangtze Delta Area, and will
look to establish more flagship and satellite hospitals in the
region.
The Company has strategically shifted its focus
from rapid national expansion, to a more focused, stable and
sustainable growth in terms of revenue and profitability. The
Company aims to achieve organic growth through the renovation of
existing flagship hospitals and investments in synergistic clinics.
Currently, it expects that three satellite clinics will commence
operations around the end of this year. Riding on the vibrant
development of the aesthetic medical market in the PRC, together
with AIH’s extensive experience in the field, the Company believes
that it will be able to increase its market penetration, and seize
market opportunities from the expanding market.
Conference Call Information
The Company will host an earnings conference
call at 8:00 AM U.S. Eastern Time (9:00 pm Beijing Time) on
November 16, 2021. Dial-in details for the conference call are as
follows:
Date: |
November 16, 2021 |
Time: |
8:00 AM Eastern Time |
United States Toll Free: |
+1-833-239-5575 |
Canada Toll Free: |
+1-855-402-0729 |
Mainland China Toll Free: |
+86-4008-206895 |
Hong Kong Toll Free: |
+852-800-906613 |
International: |
+65-6780-1201 |
Conference ID |
6080963 |
Please dial in at least 15 minutes before the
commencement of the call to ensure timely participation.
An audio replay of the conference call will be
available two hours after the conclusion of the call until November
24, 2021.
Dial-in numbers for the reply are as follows: |
United States: |
+1-855-452-5696 |
International: |
+61-2-8199-0299 |
Replay Access Code: |
6080963 |
A live and archived webcast of the call will
also be available on the Company's investor relations website at
https://ir.aihgroup.net/.
About Aesthetic Medical International
Holdings Group Limited
AIH, known as “Peng’ai” in China, is a leading provider of
aesthetic medical services in China. AIH operates through treatment
centers that spread across major cities in mainland China, and also
has presence in Hong Kong and Singapore. Leveraging over 20 years
of clinical experience, AIH provides one-stop aesthetic service
offerings, including surgical aesthetic treatments, non-surgical
aesthetic treatments, and general medical services and other
aesthetic services. According to certain third-party industry
consultant, AIH was the third-largest private aesthetic medical
services provider in China in terms of revenue in 2018. For more
information regarding the Company, please visit:
http://ir.aihgroup.net/.
Safe Harbor Statement
This press release contains “forward-looking
statements.” These statements are made under the “safe harbor”
provisions of the U.S. Private Securities Litigation Reform Act of
1995. These forward-looking statements can be identified by
terminology such as “will,” “expects,” “anticipates,” “aims,”
“future,” “intends,” “plans,” “believes,” “estimates,” “likely to”
and similar statements. Statements that are not historical facts,
including statements about the Company’s beliefs, plans and
expectations, are forward-looking statements. Forward-looking
statements involve inherent risks and uncertainties. These risks
and uncertainties and others that relate to the Company’s business
and financial condition are detailed from time to time in the
Company’s SEC filings, and could cause the actual results to differ
materially from those contained in any forward-looking statement.
These forward-looking statements are made only as of the date
indicated, and the Company undertakes no obligation to update or
revise the information contained in any forward-looking statements,
except as required under applicable law.
Investor Relations Contacts
For investor and media inquiries, please
contact:
Aesthetic Medical International Holdings
Group LimitedEmail: ir@pengai.com.cn
DLK Advisory LimitedTel: +852
2857 7101Email: ir@dlkadvisory.com
AESTHETIC MEDICAL INTERNATIONAL HOLDINGS
GROUP LIMITEDUNAUDITED CONDENSED CONSOLIDATED
BALANCE SHEETS
|
December 31, 2020 |
|
June 30, 2021 |
|
June 30, 2021 |
|
|
RMB’000 |
|
RMB’000 |
|
US$’000 |
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
ASSETS |
|
|
|
Non-current
assets |
|
|
|
Property, plant and equipment |
531,941 |
|
394,545 |
|
61,107 |
|
Intangible assets |
208,429 |
|
60,792 |
|
9,415 |
|
Investments accounted for
using the equity method |
8,330 |
|
9,154 |
|
1,418 |
|
Prepayments and deposits |
51,850 |
|
37,832 |
|
5,860 |
|
Deferred income tax
assets |
31,372 |
|
14,792 |
|
2,291 |
|
|
831,922 |
|
517,115 |
|
80,091 |
|
|
|
|
|
Current
assets |
|
|
|
Inventories |
33,336 |
|
35,497 |
|
5,498 |
|
Trade receivables |
14,324 |
|
9,982 |
|
1,546 |
|
Other receivables, deposits
and prepayments |
98,715 |
|
55,951 |
|
8,664 |
|
Amounts due from related
parties |
6,693 |
|
6,609 |
|
1,024 |
|
Restricted cash |
8,712 |
|
811 |
|
126 |
|
Cash and cash equivalents |
44,384 |
|
47,247 |
|
7,318 |
|
|
206,164 |
|
156,097 |
|
24,176 |
|
|
|
|
|
Total
assets |
1,038,086 |
|
673,212 |
|
104,267 |
|
|
|
|
|
|
|
|
|
EQUITY AND
LIABILITIES |
|
|
|
Equity attributable to
owners of the Company |
|
|
|
Share capital |
469 |
|
469 |
|
73 |
|
Treasury shares |
(2,023 |
) |
(2,023 |
) |
(313 |
) |
Accumulated losses |
(477,905 |
) |
(743,122 |
) |
(115,096 |
) |
Other reserves |
870,355 |
|
890,946 |
|
137,990 |
|
|
390,896 |
|
146,270 |
|
22,654 |
|
Non-controlling
interests |
34,840 |
|
(45,302 |
) |
(7,016 |
) |
Total
equity/(deficit) |
425,736 |
|
100,968 |
|
15,638 |
|
|
|
|
|
AESTHETIC MEDICAL INTERNATIONAL HOLDINGS GROUP
LIMITEDUNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEETS
|
December 31, 2020 |
|
June 30, 2021 |
|
June 30, 2021 |
|
RMB’000 |
|
RMB’000 |
|
US$’000 |
|
|
|
(Unaudited) |
|
(Unaudited) |
LIABILITIES |
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
|
Borrowings |
75,931 |
|
44,119 |
|
6,833 |
Lease liabilities |
178,983 |
|
156,741 |
|
24,276 |
Convertible notes |
34,190 |
|
36,085 |
|
5,589 |
Deferred income tax
liabilities |
13,377 |
|
2,709 |
|
420 |
Contingent consideration
payable |
8,181 |
|
8,607 |
|
1,333 |
|
310,662 |
|
248,261 |
|
38,451 |
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
Trade payables |
33,654 |
|
37,350 |
|
5,785 |
Accruals, other payables and
provisions |
68,783 |
|
76,288 |
|
11,814 |
Contingent consideration and
consideration payable |
4,512 |
|
3,889 |
|
602 |
Amounts due to related
parties |
1,224 |
|
2,315 |
|
359 |
Contract liabilities |
8,639 |
|
6,605 |
|
1,023 |
Borrowings |
135,814 |
|
150,340 |
|
23,285 |
Lease liabilities |
35,868 |
|
36,568 |
|
5,664 |
Current income tax
liabilities |
13,194 |
|
10,628 |
|
1,646 |
|
301,688 |
|
323,983 |
|
50,178 |
|
|
|
|
|
|
Total
liabilities |
612,350 |
|
572,244 |
|
88,629 |
|
|
|
|
|
|
Total equity and
liabilities |
1,038,086 |
|
673,212 |
|
104,267 |
|
|
|
|
|
|
AESTHETIC MEDICAL INTERNATIONAL HOLDINGS
GROUP LIMITEDUNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
|
Three months ended June 30, |
Six months ended June 30, |
|
2020 |
|
2021 |
|
2021 |
|
2020 |
|
2021 |
|
2021 |
|
|
RMB’000 |
|
RMB’000 |
|
US$’000 |
|
RMB’000 |
|
RMB’000 |
|
US$’000 |
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
Revenue |
166,723 |
|
223,965 |
|
34,688 |
|
257,677 |
|
434,474 |
|
67,291 |
|
Cost of sales and services
rendered |
(71,487 |
) |
(90,321 |
) |
(13,989 |
) |
(127,585 |
) |
(178,694 |
) |
(27,676 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
95,236 |
|
133,644 |
|
20,699 |
|
130,092 |
|
255,780 |
|
39,615 |
|
Selling expenses |
(92,474 |
) |
(112,313 |
) |
(17,395 |
) |
(170,531 |
) |
(206,287 |
) |
(31,950 |
) |
General and administrative
expenses |
(56,883 |
) |
(44,835 |
) |
(6,944 |
) |
(107,776 |
) |
(86,917 |
) |
(13,462 |
) |
Finance costs, net |
(4,937 |
) |
(5,007 |
) |
(775 |
) |
(10,061 |
) |
(10,593 |
) |
(1,641 |
) |
Other (losses)/gains, net |
(2,180 |
) |
1,280 |
|
198 |
|
(983 |
) |
1,457 |
|
226 |
|
Fair value loss of convertible
note |
- |
|
(1,196 |
) |
(185 |
) |
- |
|
(2,266 |
) |
(351 |
) |
Impairment of goodwill |
- |
|
(111,561 |
) |
(17,279 |
) |
- |
|
(111,561 |
) |
(17,279 |
) |
Impairment of intangible
asset |
- |
|
(43,723 |
) |
(6,772 |
) |
- |
|
(43,723 |
) |
(6,772 |
) |
Impairment of property, plant
and equipment |
- |
|
(139,818 |
) |
(21,655 |
) |
- |
|
(139,818 |
) |
(21,655 |
) |
Fair value gain of contingent
consideration payable |
- |
|
- |
|
- |
|
- |
|
1,523 |
|
236 |
|
Share of losses of investments
accounted for using the equity method |
(548 |
) |
(37 |
) |
(6 |
) |
(929 |
) |
(76 |
) |
(12 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income
tax |
(61,786 |
) |
(323,566 |
) |
(50,114 |
) |
(160,188 |
) |
(342,481 |
) |
(53,045 |
) |
Income tax
(expense)/credit |
(2,607 |
) |
(886 |
) |
(137 |
) |
12,680 |
|
(2,234 |
) |
(345 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the
period |
(64,393 |
) |
(324,452 |
) |
(50,251 |
) |
(147,508 |
) |
(344,715 |
) |
(53,390 |
) |
|
|
|
|
|
|
|
Items that may be subsequently
reclassified to profit or loss |
|
|
|
|
|
|
Currency translation
differences |
(173 |
) |
(23 |
) |
(4 |
) |
442 |
|
68 |
|
11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other
comprehensive (loss)/income for the period, net of
tax |
(173 |
) |
(23 |
) |
(4 |
) |
442 |
|
68 |
|
11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive
loss for the period |
(64,566 |
) |
(324,475 |
) |
(50,255 |
) |
(147,066 |
) |
(344,647 |
) |
(53,379 |
) |
|
|
|
|
|
|
|
Loss attributable
to: |
|
|
|
|
|
|
Owners of the Company |
(61,555 |
) |
(246,824 |
) |
(38,228 |
) |
(140,655 |
) |
(265,217 |
) |
(41,077 |
) |
Non-controlling interests |
(2,838 |
) |
(77,628 |
) |
(12,023 |
) |
(6,853 |
) |
(79,498 |
) |
(12,313 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the
period |
(64,393 |
) |
(324,452 |
) |
(50,251 |
) |
(147,508 |
) |
(344,715 |
) |
(53,390 |
) |
|
|
|
|
|
|
|
Earnings per share for
loss attributable to owners of the company (in RMB per
share) |
|
|
|
|
|
|
—Basic |
(0.95 |
) |
(3.58 |
) |
(0.55 |
) |
(2.17 |
) |
(3.92 |
) |
(0.61 |
) |
—Diluted |
(0.95 |
) |
(3.58 |
) |
(0.55 |
) |
(2.17 |
) |
(3.92 |
) |
(0.61 |
) |
Total comprehensive
loss attributable to: |
|
|
|
|
|
- |
|
Owners of the Company |
(61,728 |
) |
(246,847 |
) |
(38,232 |
) |
(140,213 |
) |
(265,149 |
) |
(41,066 |
) |
Non-controlling interests |
(2,838 |
) |
(77,628 |
) |
(12,023 |
) |
(6,853 |
) |
(79,498 |
) |
(12,313 |
) |
|
(64,566 |
) |
(324,475 |
) |
(50,255 |
) |
(147,066 |
) |
(344,647 |
) |
(53,379 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
AESTHETIC MEDICAL INTERNATIONAL HOLDINGS
GROUP LIMITEDRECONCILIATIONS OF IFRS AND NON-IFRS
RESULTS
EBITDA and Adjusted EBITDA |
For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
|
2020 |
2021 |
2021 |
2020 |
2021 |
2021 |
|
RMB’000 |
RMB’000 |
US$’000 |
RMB’000 |
RMB’000 |
US$’000 |
Loss before income tax for the period |
(61,786 |
) |
(323,566 |
) |
(50,114 |
) |
(160,188 |
) |
(342,481 |
) |
(53,045 |
) |
Adjustments |
|
|
|
|
|
|
+ Finance costs |
5,129 |
|
5,021 |
|
778 |
|
10,353 |
|
10,706 |
|
1,658 |
|
+ Amortisation and depreciation |
22,326 |
|
23,668 |
|
3,666 |
|
44,940 |
|
45,079 |
|
6,982 |
|
EBITDA |
(34,331 |
) |
(294,877 |
) |
(45,670 |
) |
(104,895 |
) |
(286,696 |
) |
(44,405 |
) |
Adjustments |
|
|
|
|
|
|
+ Fair value losses of convertible note |
- |
|
1,196 |
|
185 |
|
- |
|
2,266 |
|
351 |
|
+ Fair value gains of contingent consideration payable |
- |
|
- |
|
- |
|
- |
|
(1,523 |
) |
(236 |
) |
+ ESOP expense |
21,019 |
|
9,473 |
|
1,467 |
|
42,577 |
|
20,523 |
|
3,179 |
|
+ Professional fees |
10,622 |
|
3,431 |
|
531 |
|
13,947 |
|
5,123 |
|
793 |
|
+ Loss on disposal of subsidiaries |
729 |
|
385 |
|
60 |
|
729 |
|
385 |
|
60 |
|
+ Loss on disposal of associate |
927 |
|
- |
|
- |
|
927 |
|
- |
|
- |
|
+ Impairment of goodwill |
- |
|
111,561 |
|
17,279 |
|
- |
|
111,561 |
|
17,279 |
|
+ Impairment of IA |
- |
|
43,723 |
|
6,772 |
|
- |
|
43,723 |
|
6,772 |
|
+ Impairment of PPE |
- |
|
139,818 |
|
21,655 |
|
- |
|
139,818 |
|
21,655 |
|
Adjusted EBITDA |
(1,034 |
) |
14,710 |
|
2,279 |
|
(46,715 |
) |
35,180 |
|
5,448 |
|
Adjusted loss |
For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
|
2020 |
2021 |
2021 |
2020 |
2021 |
2021 |
|
RMB’000 |
RMB’000 |
US$’000 |
RMB’000 |
RMB’000 |
US$’000 |
Loss for the period |
(64,393 |
) |
(324,452 |
) |
(50,251 |
) |
(147,508 |
) |
(344,716 |
) |
(53,390 |
) |
Adjustments |
|
|
|
|
|
|
+ Professional fees |
10,622 |
|
3,431 |
|
531 |
|
13,947 |
|
5,123 |
|
793 |
|
+ Share based payment |
21,019 |
|
9,473 |
|
1,467 |
|
42,577 |
|
20,523 |
|
3,179 |
|
+ Fair value losses of convertible note |
- |
|
1,196 |
|
185 |
|
- |
|
2,266 |
|
351 |
|
+ Fair value gains of contingent consideration payable |
- |
|
- |
|
- |
|
- |
|
(1,523 |
) |
(236 |
) |
+ Loss on disposal of subsidiaries |
729 |
|
385 |
|
60 |
|
729 |
|
385 |
|
60 |
|
+ Loss on disposal of associate |
927 |
|
- |
|
- |
|
927 |
|
- |
|
- |
|
+ Impairment of goodwill |
- |
|
111,561 |
|
17,279 |
|
- |
|
111,561 |
|
17,279 |
|
+ Impairment of IA |
- |
|
43,723 |
|
6,772 |
|
- |
|
43,723 |
|
6,772 |
|
+ Impairment of PPE |
- |
|
139,818 |
|
21,655 |
|
- |
|
139,818 |
|
21,655 |
|
Adjusted loss |
(31,096 |
) |
(14,865 |
) |
(2,302 |
) |
(89,328 |
) |
(22,840 |
) |
(3,537 |
) |
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