Shenzhen, China, Nov. 30, 2020 (GLOBE NEWSWIRE) -- Aesthetic Medical International Holdings Group Limited (the “Company” or Nasdaq: AIH), a leading provider of aesthetic medical services in China, today announces its unaudited financial results for the third quarter ended September 30, 2020.
Dr. Zhou Pengwu, the Chairman and CEO of the Company, commented, “Our financial results for the third quarter ended September 30, 2020 reflect our management’s agility and business resilience despite the full brunt and the unpredictability brought by the COVID-19 pandemic. For the third quarter of 2020, we recorded a total number of active customers of 83,222, achieving an increase of 16.4% from 71,502 in the third quarter of 2019. At the same time, our core business initiatives were well-executed and our market share in the aesthetic medical industry was strengthened primarily through our completion of the acquisition of Guangdong Pengai Hanfei Hospital Management Co., Ltd. and our integration of the industry chain.”
Dr. Zhou continued, “The markets have been signaling the recovery in our business and the aesthetical medical industry, as China gradually recovers from the aftermath of COVID-19 outbreak. Customers are adapting to the new normal and gradually restoring their contained enthusiasm in consuming aesthetic medical services. In addition to allocating our resources to focus on enhancing our customer stickiness and improving our brand awareness, long-term growth and returns with an emphasis on sustainability remain our priority.”
Third Quarter 2020 Unaudited Financial Highlights
- Total revenue was RMB281.3 million (US$41.4 million), an increase of 18.2% from RMB237.9 million in the third quarter of 2019.
- Gross profit was RMB179.7 million (US$26.5 million), an increase of 9.4% from RMB164.3 million in the third quarter of 2019.
- Gross margin was 63.9%, a decrease of 5.2 percentage points from 69.1% in the third quarter of 2019.
- Loss for the period was RMB17.7 million (US$2.6 million), compared with a profit of RMB118.8 million in the third quarter of 2019.
- EBITDA1 for the period was RMB6.9 million (US$1.0 million), a decrease of 95.4% from RMB151.3 million in the third quarter of 2019.
- Adjusted profit1 for the period was RMB6.9 million (US$1.0 million), a decrease of 65.8% from RMB20.2 million in the third quarter of 2019.
- Adjusted EBITDA1 for the period was RMB31.5 million (US$4.6 million), a decrease of 39.1% from RMB51.7 million in the third quarter of 2019.
- Basic loss per share was RMB0.26 (US$0.04), compared with basic earnings per share of RMB2.77 in the third quarter of 2019. Diluted loss per share was RMB0.26 (US$0.04), compared with diluted loss per share of RMB0.12 in the third quarter of 2019.
1 EBITDA, Adjusted EBITDA and Adjusted profit are not prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standard 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.
Nine Months Ended September 30, 2020 Unaudited Financial Highlights
- Total revenue was RMB539.0 million (US$79.4 million), a decrease of 14.6% from RMB631.0 million in the same period of 2019.
- Gross profit was RMB309.8 million (US$45.6 million), a decrease of 28.1% from RMB430.9 million in the same period of 2019.
- Gross margin was 57.5%, a decrease of 10.8 percentage points from 68.3% in the same period of 2019.
- Loss for the period was RMB165.2 million (US$24.3 million), compared with a profit of RMB198.9 million in the same period of 2019.
- EBITDA1 for the period was a loss of RMB98.0 million (US$14.4 million), a decrease of 133.1% from a profit of RMB295.7 million in the same period of 2019.
- Adjusted profit1 for the period was a loss of RMB82.5 million (US$12.1 million), a decrease of 237.5% from a profit of RMB60.0 million in the same period of 2019.
- Adjusted EBITDA1 for the period was a loss of RMB15.2 million (US$2.2 million), a decrease of 109.9% from a profit of RMB153.3 million in the same period of 2019.
- Basic loss per share was RMB2.43 (US$0.36), compared with basic earnings per share of RMB4.66 in the same period of 2019. Diluted loss per share was RMB2.43 (US$0.36), compared with diluted earnings per share of RMB0.22 in the same period of 2019.
1 EBITDA, Adjusted EBITDA and Adjusted profit are not prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standard 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.
Third Quarter 2019 and 2020 Operational Highlights
| For the Three Months Ended September 30, | ||||||||||||||||||||
| 2019 | 2020 | % Change | ||||||||||||||||||
| Number | % of Total | Number | % of Total | Number | ||||||||||||||||
| New Customers | 32,023 | 44.8 | % | 35,939 | 43.2 | % | 12.2 | % | ||||||||||||
| Repeat Customers | 39,479 | 55.2 | % | 47,283 | 56.8 | % | 19.8 | % | ||||||||||||
| Total Active Customers | 71,502 | 100.0 | % | 83,222 | 100.0 | % | 16.4 | % | ||||||||||||
- In the third quarter of 2020, repeat customers accounted for 56.8% of the active customer base.
- The total number of active customers was 83,222, an increase of 16.4% from 71,502 in the third quarter of 2019.
Nine Months Ended September 30, 2019 and September 30, 2020 Operational Highlights
| For the Nine Months Ended September 30, | ||||||||||||||||||||
| 2019 | 2020 | % Change | ||||||||||||||||||
| Number | % of Total | Number | % of Total | Number | ||||||||||||||||
| New Customers | 79,260 | 46.2 | % | 77,083 | 41.4 | % | -2.7 | % | ||||||||||||
| Repeat Customers | 92,290 | 53.8 | % | 109,076 | 58.6 | % | 18.2 | % | ||||||||||||
| Total Active Customers | 171,550 | 100.0 | % | 186,159 | 100.0 | % | 8.5 | % | ||||||||||||
- In the nine months ended September 30, 2020, repeat customers accounted for 58.6% of the active customer base.
- The total number of active customers was 186,159 an increase of 8.5% from 171,550 in the same period of 2019.
Third Quarter 2019 and 2020 Unaudited Financial Results
| For the Three Months Ended September 30, | ||||||||||||
| (RMB millions, except per share data and percentages) | 2019 | 2020 | % Change | |||||||||
| Revenue | 237.9 | 281.3 | 18.2 | % | ||||||||
| Non-surgical aesthetic medical services | 144.7 | 138.4 | -4.4 | % | ||||||||
| Minimally invasive aesthetic treatments | 52.8 | 70.8 | 34.1 | % | ||||||||
| Energy-based treatments | 91.9 | 67.6 | -26.4 | % | ||||||||
| Surgical aesthetic medical services | 80.8 | 128.8 | 59.4 | % | ||||||||
| General healthcare services and other aesthetic medical services | 12.4 | 14.1 | 13.7 | % | ||||||||
| Gross profit | 164.3 | 179.7 | 9.4 | % | ||||||||
| Gross margin | 69.1 | % | 63.9 | % | -5.2 | pp* | ||||||
| Profit/(loss) for the period | 118.8 | (17.7 | ) | -114.9 | % | |||||||
| Profit/(loss) margin | 49.9 | % | -6.3 | % | -56.2 | pp* | ||||||
| EBITDA** | 151.3 | 6.9 | -95.4 | % | ||||||||
| Adjusted EBITDA** | 51.7 | 31.5 | -39.1 | % | ||||||||
| Adjusted EBITDA margin | 21.7 | % | 11.2 | % | -10.5 | pp* | ||||||
| Adjusted profit** | 20.2 | 6.9 | -65.8 | % | ||||||||
| Adjusted profit margin | 8.5 | % | 2.4 | % | -6.1 | pp* | ||||||
| Basic profit/(loss) per share | 2.77 | (0.26 | ) | -109.4 | % | |||||||
| Diluted profit/(loss) per share | (0.12 | ) | (0.26 | ) | 116.7 | % | ||||||
Notes:
* pp represents percentage points
** Refer to below “Non-IFRS Financial Measures”
Revenues
Total revenue was RMB281.3 million (US$41.4 million), an increase of 18.2% from RMB237.9 million in the third quarter of 2019, primarily due to the acquisition of Guangdong Pengai Hanfei Hospital Management Co., Ltd. (“Guangdong Pengai Hanfei”) and the increased total number of active customers developed through the Company’s enhanced marketing and advertising efforts.
Cost of sales and services rendered
Cost of sales and services rendered was RMB101.6 million (US$15.0 million), an increase of 38.2% from RMB73.5 million in the third quarter of 2019.
Gross profit
Gross profit was RMB179.7 million (US$26.5 million), an increase of 9.4% from RMB164.3 million in the third quarter of 2019, primarily as a result of the increase in revenue due to the acquisition of Guangdong Pengai Hanfei and the expanded customer base. Gross profit margin was 63.9%, a decrease of 5.2 percentage points from 69.1% in the third quarter of 2019, mainly due to the more competitive pricing strategies adopted by the Company and its subsidiaries in response to the outbreak of COVID-19.
Gross profit of non-surgical aesthetic medical services was RMB87.7 million (US$12.9 million), a decrease of 19.4% from RMB108.8 million in the third quarter of 2019. Gross profit margin was 63.4%, a decrease from 75.2% in the third quarter of 2019.
Gross profit of minimally invasive aesthetic treatments was RMB46.5 million (US$6.8 million), an increase of 36.0% from RMB34.2 million in the third quarter of 2019. Gross profit margin was 65.7%, an increase from 64.8% in the third quarter of 2019.
Gross profit of energy-based treatments was RMB41.1 million (US$6.1 million), a decrease of 44.9% from RMB74.6 million in the third quarter of 2019. Gross profit margin was 60.8%, a decrease from 81.2% in the third quarter of 2019.
Gross profit of surgical aesthetic medical services was RMB86.1 million (US$12.7 million), an increase of 65.9% from RMB51.9 million in the third quarter of 2019. Gross profit margin was 66.8%, an increase from 64.2% in the third quarter of 2019.
Gross profit of general healthcare services and other aesthetic medical services was RMB5.9 million (US$0.9 million), an increase of 59.5% from RMB3.7 million in the third quarter of 2019. Gross profit margin was 41.8%, an increase from 29.8% in the third quarter of 2019.
Selling expenses
Selling expenses were RMB140.0 million (US$20.6 million), representing 49.8% of the Company’s total revenue of the same period, compared to selling expenses of RMB103.5 million in the third quarter of 2019, which represented 43.5% of the Company’s total revenue of the same period. Selling expenses increased on a year-over-year basis, primarily because the Company enhanced its marketing efforts and incurred advertising and marketing expenses to extend the brand’s reach, boost sales and attract new customers.
General and administrative expenses
General and administrative expenses were RMB61.1 million (US$9.0 million), an increase of 14.4% from RMB53.4 million in the third quarter of 2019, primarily due to the increase of share-based compensation expenses which was first recognised in June 2019, and the acquisition of Guangdong Pengai Hanfei.
Profit/(loss) for the period
As a result of the foregoing, the Company recorded a loss for the third quarter of 2020 of RMB17.7 million (US$2.6 million), compared with a profit of RMB118.8 million in the third quarter of 2019. Basic loss per share was RMB0.26 (US$0.04), compared with basic earnings per share of RMB2.77 in the third quarter of 2019. Diluted loss per share was RMB0.26 (US$0.04), compared with diluted loss per share of RMB0.12 in the third quarter of 2019.
Certain Non-IFRS items
EBITDA for the third quarter of 2020 was RMB6.9 million (US$1.0 million), a decrease of 95.4% from RMB151.3 million in the third quarter of 2019.
Adjusted profit for the third quarter of 2020 was RMB6.9 million (US$1.0 million), a decrease of 65.8% from RMB20.2 million in the third quarter of 2019.
Adjusted EBITDA for the third quarter of 2020 was RMB31.5 million (US$4.6 million), a decrease of 39.1% from RMB51.7 million in the third quarter of 2019.
EBITDA, Adjusted EBITDA and Adjusted profit are not prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standard 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.
Third Quarter 2019 and 2020 Operational Results
Repeat customer ratio
Repeat customers, defined as active customers who had previously received at least one procedure from the Company, accounted for 56.8% of the Company’s active customer base in the third quarter of 2020.
Number of treatments
The Company conducted a total of 187,847 treatments, including 49,551 surgical treatments and 132,393 non-surgical treatments, in the third quarter of 2020, representing an increase of 14.6% and 27.8% and an increase of 14.3%, respectively, from 163,946 total treatments, 38,764 surgical treatments and 115,799 non-surgical treatments in the third quarter of 2019.
For the nine months ended September 30, 2020, the Company conducted a total of 413,770 treatments, including 86,792 surgical treatments and 297,760 non-surgical treatments, representing an increase of 14.8% and 30.0% and an increase of 13.1%, respectively, from 360,471 total treatments, 66,748 surgical treatments and 263,235 non-surgical treatments in the same period of 2019.
Nine Months Ended September 30, 2019 and September 30, 2020 Unaudited Financial Results
| For the Nine Months Ended September 30, | ||||||||||||
| (RMB millions, except per share data and percentages) | 2019 | 2020 | % Change | |||||||||
| Revenue | 631.0 | 539.0 | -14.6 | % | ||||||||
| Non-surgical aesthetic medical services | 345.9 | 268.9 | -22.3 | % | ||||||||
| Minimally invasive aesthetic treatments | 155.3 | 139.3 | -10.3 | % | ||||||||
| Energy-based treatments | 190.6 | 129.6 | -32.0 | % | ||||||||
| Surgical aesthetic medical services | 238.3 | 239.9 | 0.7 | % | ||||||||
| General healthcare services and other aesthetic medical services | 46.8 | 30.2 | -35.5 | % | ||||||||
| Gross profit | 430.9 | 309.8 | -28.1 | % | ||||||||
| Gross margin | 68.3 | % | 57.5 | % | -10.8 | pp* | ||||||
| Profit/(loss) for the period | 198.9 | (165.2 | ) | -183.1 | % | |||||||
| Profit/(loss) margin | 31.5 | % | -30.6 | % | -62.1 | pp* | ||||||
| EBITDA** | 295.7 | (98.0 | ) | -133.1 | % | |||||||
| Adjusted EBITDA** | 153.3 | (15.2 | ) | -109.9 | % | |||||||
| Adjusted EBITDA margin | 24.3 | % | -2.8 | % | -27.1 | pp* | ||||||
| Adjusted profit/(loss)** | 60.0 | (82.5 | ) | -237.5 | % | |||||||
| Adjusted profit/(loss) margin | 9.5 | % | -15.3 | % | -24.8 | pp* | ||||||
| Basic profit/(loss) per share | 4.66 | (2.43 | ) | -152.1 | % | |||||||
| Diluted profit/(loss) per share | 0.22 | (2.43 | ) | -1,204.5 | % | |||||||
Notes:
* pp represents percentage points
** Refer to below “Non-IFRS Financial Measures”
Revenues
Total revenue was RMB539.0 million (US$79.4 million), a decrease of 14.6% from RMB631.0 million in the same period of 2019, primarily due to the temporary shutdown of the Company’s treatment centers in February and March 2020, the control measures implemented by the Company to limit the customer-flow in the treatment centers due to the outbreak of COVID-19 during the first quarter and the second quarter of 2020 and the more competitive pricing strategies adopted by the Company and its subsidiaries in response to the outbreak of COVID-19.
Cost of sales and services rendered
Cost of sales and services rendered was RMB229.2 million (US$33.8 million), an increase of 14.5% from RMB200.1 million in the same period of 2019.
Gross profit
Gross profit was RMB309.8 million (US$45.6 million), a decrease of 28.1% from RMB430.9 million in the same period of 2019, primarily as a result of the decrease in revenue in the first quarter and the second quarter of 2020 due to the COVID-19 outbreak. Gross profit margin was 57.5%, a decrease of 10.8 percentage points from 68.3% in the same period of 2019, primarily as a result of the decrease in revenue in the first quarter and the second quarter of 2020 due to the COVID-19 outbreak.
Gross profit of non-surgical aesthetic medical services was RMB150.9 million (US$22.2 million), a decrease of 40.7% from RMB254.5 million in the same period of 2019. Gross profit margin was 56.1%, a decrease from 73.6% in the same period of 2019.
Gross profit of minimally invasive aesthetic treatments was RMB83.7 million (US$12.3 million), a decrease of 23.0% from RMB108.7 million in the same period of 2019. Gross profit margin was 60.1%, a decrease from 70.0% in the same period of 2019.
Gross profit of energy-based treatments was RMB67.2 million (US$9.9 million), a decrease of 53.9% from RMB145.8 million in the same period of 2019. Gross profit margin was 51.8%, a decrease from 76.5% in the same period of 2019.
Gross profit of surgical aesthetic medical services was RMB145.4 million (US$21.4 million), a decrease of 3.5% from RMB150.6 million in the same period of 2019. Gross profit margin was 60.6%, a decrease from 63.2% in the same period of 2019.
Gross profit of general healthcare services and other aesthetic medical services was RMB13.5 million (US$2.0 million), a decrease of 47.7% from RMB25.8 million in the same period of 2019. Gross profit margin was 44.7%, a decrease from 55.1% in the same period of 2019.
Selling expenses
Selling expenses were RMB310.5 million (US$45.7 million), representing 57.6% of the Company’s total revenue of the same period, compared to selling expenses of RMB268.8 million in the same period of 2019, which represented 42.6% of the Company’s total revenue of the same period. Selling expenses increased on a year-over-year basis, primarily because the Company continued to enhance its marketing efforts and incur advertising and marketing expenses to extend the brand’s reach, boost sales and attract new customers.
General and administrative expenses
General and administrative expenses were RMB168.8 million (US$24.9 million), an increase of 41.0% from RMB119.7 million in the same period of 2019, primarily due to the increase of share-based compensation expenses which was first recognised since June 2019.
Profit/(loss) for the period
As a result of the foregoing, the Company recorded a loss for the nine months ended September 30, 2020 of RMB165.2 million (US$24.3 million), compared with a profit of RMB198.9 million in the same period of 2019. Basic loss per share was RMB2.43 (US$0.36), compared with basic earnings per share of RMB4.66 in the same period of 2019. Diluted loss per share was RMB2.43 (US$0.36), compared with diluted earnings per share of RMB0.22 in the same period of 2019.
Certain Non-IFRS items
EBITDA for the nine months ended September 30, 2020 was a loss of RMB98.0 million (US$14.4 million), a decrease of 133.1% from a profit of RMB295.7 million in the same period of 2019.
Adjusted profit for the nine months ended September 30, 2020 was a loss of RMB82.5 million (US$12.1 million), a decrease of 237.5% from a profit of RMB60.0 million in the same period of 2019.
Adjusted EBITDA for the nine months ended September 30, 2020 was a loss of RMB15.2 million (US$2.2 million), a decrease of 109.9% from a profit of RMB153.3 million in the same period of 2019.
EBITDA, Adjusted EBITDA and Adjusted profit are not prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standard 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 amounted to RMB66.2 million (US$9.8 million) as of September 30, 2020, compared to RMB154.5 million as of December 31, 2019.
Certain cash flow items
Net cash used in operating activities was RMB19.7 million (US$2.9 million) for the nine months ended September 30, 2020, compared to net cash generated from operating activities of RMB99.6 million for the nine months ended September 30, 2019.
Net cash used in investing activities was RMB106.9 million (US$15.7 million) for the nine months ended September 30, 2020, compared to RMB81.6 million for the nine months ended September 30, 2019.
Net cash generated from financing activities was RMB38.3 million (US$5.6 million) for the nine months ended September 30, 2020, compared to net cash used in financing activities of RMB58.1 million for the nine months ended September 30, 2019.
Liquidity and capital resources
The Company had net current liabilities of RMB236.2 million as at September 30, 2020. From the second quarter of FY2020 to the third quarter of FY2020, the Company completed three acquisitions leading to a potential cash flow amounting to approximately RMB54 million in the coming 12 months after the date of this release. During the first quarter of 2020, due to the outbreak of COVID-19, the Company temporarily shut down its aesthetic treatment centers. This created material and adverse impacts on its revenue and cash flow for the first half of 2020 with potential continuing impacts on subsequent periods. After considering the gradual recovery of business post the COVID-19 outbreak, its expected cash flow from future operations taking into consideration cost and expenses management, funds from bank borrowings and other sources of financing, the Company concluded that it has sufficient financial resources to meet its financial obligations as and when they fall due and continue its operation in the coming 12 months, subject to any uncertainty of the development of COVID-19.
Exchange Rate
This press release contains translations of certain Renminbi (RMB) amounts into U.S. dollars (US$) 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 RMB6.7896 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 September 30, 2020.
Non-IFRS Financial Measures
EBITDA represents our profit before income tax, adjusted to exclude finance costs and amortization and depreciation. Adjusted EBITDA represents EBITDA, adjusted to exclude donation, fair value gain of convertible redeemable preferred shares, fair value loss of convertible note, fair value gain of exchangeable note liabilities, fair value gain of derivative financial instrument, share-based compensation expense, other one-off expenses including professional fees in relation to our financing activities but are not capitalized, IT-related expenses paid to a related party pursuant to a service agreement, which was expired in June 2019, and roadshow expenses incurred for IPO.
Adjusted profit represents profit for the period/year, adjusted to exclude donation, fair value gain of convertible redeemable preferred shares, fair value loss of convertible note, fair value gain of exchangeable note liabilities, fair value gain of derivative financial instrument, share-based compensation expense, other one-off expenses including professional fees in relation to our financing activities but are not capitalized, IT-related expenses paid to a related party pursuant to a service agreement, which was expired in June 2019, and roadshow expenses incurred for IPO.
EBITDA, Adjusted EBITDA and Adjusted profit are non-IFRS financial measures. You should not consider EBITDA, Adjusted EBITDA and Adjusted profit 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 profit 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 and company to company.
Recent Developments
On October 13, 2020, the Company announced that its board of directors had approved a share repurchase program, under which the Company was authorized to repurchase in the open market up to US$6.0 million worth of its American depositary shares (“ADSs”) from time to time until October 12, 2021, depending on general market conditions, trading price and other factors, as well as subject to the applicable laws and the Company’s securities trading policy.
As of November 30, 2020, 45,000 ADSs were repurchased with a total consideration of approximately US$0.3 million.
Business Outlook
As China gradually recovers from the aftermath of the COVID-19 outbreak, the Company has experienced recovery in its business operations. While the duration of the COVID-19 pandemic and its negative impact to market demand and the Company’s business operations still cannot be conclusively and accurately estimated at this time since there is still uncertainty for possible COVID-19 outbreak in the future, subject to any uncertainty of the development of COVID-19, the Company currently expects that its revenue will gradually recover in the fourth quarter of 2020. Such expectation reflects the current and preliminary view of the Company’s management team based on the information available at the time, and may be subject to changes. The Company will continue to monitor and evaluate the development of the pandemic, and the resulting financial impact on the Company.
Conference Call Information
The Company’s management will hold an earnings conference call on November 30, 2020, at 8:00 AM U.S. Eastern Time (5:00 am Pacific Time/ 9:00 pm Beijing Time). Dial-in details for the earnings conference call are as follows:
| Conference Call | |
| Date: | November 30, 2020 |
| Time: | 8:00 am ET, U.S. |
| International Toll Free: | United States: +1 888-346-8982 Canada: +1 855-669-9657 Mainland China: +86 400-120-1203 Hong Kong: +852 800-905-945 |
| International: | International: +1 412-902-4272 |
| Conference ID: | Aesthetic Medical International Holdings Group Limited |
Please dial in at least 15 minutes before the commencement of the call to ensure timely participation. For those unable to participate, an audio replay of the conference call will be available from approximately one hour after the end of the live call until December 7, 2020. The dial-in for the replay is +1 877-344-7529 within the United States or +1 412-317-0088 internationally. The replay access code is 10150230.
A live and archived webcast of the call will also be available on AIH's website at: https://ir.aihgroup.net/. Please log in at least 10 minutes prior to the conference call in order to download the applicable audio software.
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: https://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 Contact
For investor and media inquiries, please contact:
Aesthetic Medical International Holdings Group Limited
Email: ir@pengai.com.cn
Ascent Investor Relations LLC
Ms. Tina Xiao
Tel: (917) 609-0333
Email: tina.xiao@ascent-ir.com
AESTHETIC MEDICAL INTERNATIONAL HOLDINGS GROUP LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
| 31 December | 30 September | 30 September | ||||||||||
| 2019 | 2020 | 2020 | ||||||||||
| RMB’000 | RMB’000 | US$’000 | ||||||||||
| (Unaudited) | (Unaudited) | |||||||||||
| ASSETS | ||||||||||||
| Non-current assets | ||||||||||||
| Property, plant and equipment | 519,323 | 720,240 | 106,080 | |||||||||
| Investment properties | 15,373 | - | - | |||||||||
| Intangible assets | 175,417 | 400,009 | 58,915 | |||||||||
| Derivative financial instruments | - | 1,164 | 171 | |||||||||
| Investments accounted for using the equity method | 10,256 | 8,464 | 1,247 | |||||||||
| Prepayments and deposits | 42,298 | 47,520 | 6,999 | |||||||||
| Deferred income tax assets | 19,774 | 43,088 | 6,346 | |||||||||
| 782,441 | 1,220,485 | 179,758 | ||||||||||
| Current assets | ||||||||||||
| Inventories | 26,120 | 36,510 | 5,377 | |||||||||
| Trade receivables | 9,705 | 16,316 | 2,403 | |||||||||
| Other receivables, deposits and prepayments | 71,278 | 60,793 | 8,954 | |||||||||
| Derivative financial instruments | - | 21,447 | 3,159 | |||||||||
| Amounts due from related parties | 3,101 | 6,628 | 977 | |||||||||
| Cash and cash equivalents | 154,490 | 66,207 | 9,751 | |||||||||
| 264,694 | 207,901 | 30,621 | ||||||||||
| Total assets | 1,047,135 | 1,428,386 | 210,379 | |||||||||
| EQUITY AND LIABILITIES | ||||||||||||
| Equity attributable to owners of the Company | ||||||||||||
| Share capital | 469 | 469 | 69 | |||||||||
| Treasury shares | (41 | ) | (41 | ) | (6 | ) | ||||||
| Accumulated losses | (242,232 | ) | (399,963 | ) | (58,908 | ) | ||||||
| Other reserves | 789,285 | 852,092 | 125,500 | |||||||||
| 547,481 | 452,557 | 66,655 | ||||||||||
| Non-controlling interests | 43,117 | 66,377 | 9,776 | |||||||||
| Total equity | 590,598 | 518,934 | 76,431 | |||||||||
AESTHETIC MEDICAL INTERNATIONAL HOLDINGS GROUP LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
| 31 December | 30 September | 30 September | ||||||||||
| 2019 | 2020 | 2020 | ||||||||||
| RMB’000 | RMB’000 | USD’000 | ||||||||||
| (Unaudited) | (Unaudited) | |||||||||||
| LIABILITIES | ||||||||||||
| Non-current liabilities | ||||||||||||
| Borrowings | 12,917 | 55,458 | 8,168 | |||||||||
| Lease liabilities | 165,615 | 310,454 | 45,725 | |||||||||
| Convertible note | - | 34,621 | 5,099 | |||||||||
| Contingent consideration payable | - | 49,202 | 7,247 | |||||||||
| Deferred income tax liabilities | 12,703 | 15,644 | 2,304 | |||||||||
| 191,235 | 465,379 | 68,543 | ||||||||||
| LIABILITIES | ||||||||||||
| Current liabilities | ||||||||||||
| Trade payables | 17,017 | 41,174 | 6,064 | |||||||||
| Accruals, other payables and provisions | 58,439 | 75,848 | 11,171 | |||||||||
| Consideration payable | - | 55,891 | 8,233 | |||||||||
| Amounts due to related parties | 626 | 702 | 103 | |||||||||
| Contract liabilities | 5,542 | 38,476 | 5,667 | |||||||||
| Borrowings | 127,470 | 156,396 | 23,035 | |||||||||
| Lease liabilities | 36,266 | 49,186 | 7,244 | |||||||||
| Current income tax liabilities | 19,942 | 26,400 | 3,888 | |||||||||
| 265,302 | 444,073 | 65,405 | ||||||||||
| Total liabilities | 456,537 | 909,452 | 133,948 | |||||||||
| Total equity and liabilities | 1,047,135 | 1,428,386 | 210,379 | |||||||||
AESTHETIC MEDICAL INTERNATIONAL HOLDINGS GROUP LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
| Three months ended | Nine months ended | |||||||||||||||||||||||
| 30 September | 30 September | 30 September | 30 September | 30 September | 30 September | |||||||||||||||||||
| 2019 | 2020 | 2020 | 2019 | 2020 | 2020 | |||||||||||||||||||
| RMB’000 | RMB’000 | US$’000 | RMB’000 | RMB’000 | US$’000 | |||||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||||
| Revenue | 237,892 | 281,323 | 41,434 | 630,966 | 539,000 | 79,386 | ||||||||||||||||||
| Cost of sales and services rendered | (73,544 | ) | (101,605 | ) | (14,965 | ) | (200,089 | ) | (229,190 | ) | (33,756 | ) | ||||||||||||
| Gross profit | 164,348 | 179,718 | 26,469 | 430,877 | 309,810 | 45,630 | ||||||||||||||||||
| Selling expenses | (103,471 | ) | (139,981 | ) | (20,617 | ) | (268,757 | ) | (310,512 | ) | (45,733 | ) | ||||||||||||
| General and administrative expenses | (53,384 | ) | (61,082 | ) | (8,996 | ) | (119,687 | ) | (168,858 | ) | (24,870 | ) | ||||||||||||
| Finance costs, net | (6,222 | ) | (7,600 | ) | (1,119 | ) | (18,259 | ) | (17,661 | ) | (2,601 | ) | ||||||||||||
| Other gains, net | 513 | 2,791 | 411 | 17,045 | 1,808 | 266 | ||||||||||||||||||
| Fair value gain of convertible redeemable preferred shares | 93,600 | - | - | 136,656 | - | - | ||||||||||||||||||
| Fair value losses of convertible note | (1,403 | ) | (786 | ) | (116 | ) | (6,761 | ) | (786 | ) | (116 | ) | ||||||||||||
| Fair value gain of exchangeable note liabilities | 29,081 | - | - | 45,274 | - | - | ||||||||||||||||||
| Fair value loss of derivative financial instrument | 315 | - | - | 301 | - | - | ||||||||||||||||||
| Share of (losses)/profits of investments accounted for using the equity method | (63 | ) | 20 | 3 | (1,431 | ) | (909 | ) | (134 | ) | ||||||||||||||
| Profit/(loss) before income tax | 123,314 | (26,920 | ) | (3,965 | ) | 215,258 | (187,108 | ) | (27,558 | ) | ||||||||||||||
| Income tax (expense)/credit | (4,551 | ) | 9,211 | 1,357 | (16,331 | ) | 21,891 | 3,225 | ||||||||||||||||
| Profit/(loss) for the period | 118,763 | (17,709 | ) | (2,608 | ) | 198,927 | (165,217 | ) | (24,333 | ) | ||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||||||||||
| 30 September | 30 September | 30 September | 30 September | 30 September | 30 September | |||||||||||||||||||
| 2019 | 2020 | 2020 | 2019 | 2020 | 2020 | |||||||||||||||||||
| RMB’000 | RMB’000 | US$’000 | RMB’000 | RMB’000 | US$’000 | |||||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||||
| Items that may be subsequently reclassified to profit or loss | ||||||||||||||||||||||||
| Currency translation differences | (70 | ) | (946 | ) | (139 | ) | (159 | ) | (504 | ) | (74 | ) | ||||||||||||
| Total other comprehensive (loss)/income for the period, net of tax | (70 | ) | (946 | ) | (139 | ) | (159 | ) | (504 | ) | (74 | ) | ||||||||||||
| Total comprehensive income/(loss) for the period | 118,693 | (18,655 | ) | (2,747 | ) | 198,768 | (165,721 | ) | (24,407 | ) | ||||||||||||||
| Profit/(loss) attributable to: | ||||||||||||||||||||||||
| Owners of the Company | 115,674 | (16,914 | ) | (2,491 | ) | 194,727 | (157,569 | ) | (23,207 | ) | ||||||||||||||
| Non-controlling interests | 3,089 | (795 | ) | (117 | ) | 4,200 | (7,648 | ) | (1,126 | ) | ||||||||||||||
| Profit/(loss) for the period | 118,763 | (17,709 | ) | (2,608 | ) | 198,927 | (165,217 | ) | (24,333 | ) | ||||||||||||||
| Earnings per share for profit attributable to owners of the company (in RMB per share) | ||||||||||||||||||||||||
| —Basic | 2.77 | (0.26 | ) | (0.04 | ) | 4.66 | (2.43 | ) | (0.36 | ) | ||||||||||||||
| —Diluted | (0.12 | ) | (0.26 | ) | (0.04 | ) | 0.22 | (2.43 | ) | (0.36 | ) | |||||||||||||
| Total comprehensive income attributable to: | ||||||||||||||||||||||||
| Owners of the Company | 115,604 | (17,860 | ) | (2,630 | ) | 194,568 | (158,073 | ) | (23,281 | ) | ||||||||||||||
| Non-controlling interests | 3,089 | (795 | ) | (117 | ) | 4,200 | (7,648 | ) | (1,126 | ) | ||||||||||||||
| 118,693 | (18,655 | ) | (2,747 | ) | 198,768 | (165,721 | ) | (24,407 | ) | |||||||||||||||
AESTHETIC MEDICAL INTERNATIONAL HOLDINGS GROUP LIMITED
RECONCILIATIONS OF NON-IFRS RESULTS OF OPERATIONS MEASURES TO THE NEAREST COMPARABLE IFRS MEASURES
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||
| 2019 | 2020 | 2020 | 2019 | 2020 | 2020 | |||||||||||||||||||
| EBITDA and adjusted EBITDA | RMB’000 | RMB’000 | US$’000 | RMB’000 | RMB’000 | US$’000 | ||||||||||||||||||
| Profit /(loss) Before taxation for the year/period | 123,314 | (26,920 | ) | (3,965 | ) | 215,258 | (187,108 | ) | (27,558 | ) | ||||||||||||||
| Adjustments | ||||||||||||||||||||||||
| + Finance costs | 6,295 | 8,337 | 1,228 | 18,545 | 18,690 | 2,753 | ||||||||||||||||||
| + Amortisation and Depreciation | 21,694 | 25,471 | 3,751 | 61,849 | 70,411 | 10,370 | ||||||||||||||||||
| EBITDA | 151,303 | 6,888 | 1,014 | 295,652 | (98,007 | ) | (14,435 | ) | ||||||||||||||||
| + Fair value gains of convertible redeemable preferred shares | (93,600 | ) | - | - | (136,656 | ) | - | - | ||||||||||||||||
| + Fair value losses of convertible note | 1,403 | 786 | 116 | 6,761 | 786 | 116 | ||||||||||||||||||
| + Fair value gain of derivative financial instruments | (315 | ) | - | - | (301 | ) | - | - | ||||||||||||||||
| + Fair value gains of exchangeable note | (29,081 | ) | - | - | (45,274 | ) | - | - | ||||||||||||||||
| + ESOP expense | 18,843 | 21,020 | 3,096 | 25,124 | 63,597 | 9,367 | ||||||||||||||||||
| + Professional fees | 1,999 | 1,445 | 213 | 4,354 | 15,392 | 2,267 | ||||||||||||||||||
| + Gain on disposal of subsidiary | - | - | - | - | 1,656 | 244 | ||||||||||||||||||
| +Donation | 1,330 | 196 | 1,330 | 196 | ||||||||||||||||||||
| + IT-related expenses paid to a related party | - | - | - | 2,500 | - | - | ||||||||||||||||||
| +Roadshow expense | 1,122 | - | - | 1,122 | - | - | ||||||||||||||||||
| Adjusted EBITDA | 51,674 | 31,469 | 4,635 | 153,282 | (15,246 | ) | (2,245 | ) | ||||||||||||||||
| For the Three Months Ended September 30, | For the Nine Months Ended September 30 | |||||||||||||||||||||||
| 2019 | 2020 | 2020 | 2019 | 2020 | 2020 | |||||||||||||||||||
| Adjusted Profit | RMB’000 | RMB’000 | US$’000 | RMB’000 | RMB’000 | US$’000 | ||||||||||||||||||
| Profit / (loss) for the period | 118,763 | (17,709 | ) | (2,608 | ) | 198,927 | (165,217 | ) | (24,334 | ) | ||||||||||||||
| Adjustments | ||||||||||||||||||||||||
| + Fair value gains of convertible redeemable preferred shares | (93,600 | ) | - | - | (136,656 | ) | - | - | ||||||||||||||||
| + Fair value losses of convertible note | 1,403 | 786 | 116 | 6,761 | 786 | 116 | ||||||||||||||||||
| + Fair value gains of derivative financial instruments | (315 | ) | - | - | (301 | ) | - | - | ||||||||||||||||
| + Fair value gains of exchangeable note | (29,081 | ) | - | - | (45,274 | ) | - | - | ||||||||||||||||
| + Interest expense on convertible note | 1,113 | - | - | 3,483 | - | - | ||||||||||||||||||
| + ESOP expense | 18,843 | 21,020 | 3,096 | 25,124 | 63,597 | 9,367 | ||||||||||||||||||
| + Professional fees | 1,999 | 1,445 | 213 | 4,354 | 15,392 | 2,267 | ||||||||||||||||||
| + Gain on disposal of subsidiary | - | - | - | - | 1,656 | 244 | ||||||||||||||||||
| + Donation | - | 1,330 | 196 | - | 1,330 | 196 | ||||||||||||||||||
| + IT-related expenses paid to a related party | - | - | - | 2,500 | - | - | ||||||||||||||||||
| + Roadshow expense | 1,122 | - | - | 1,122 | - | - | ||||||||||||||||||
| Adjusted Profit | 20,247 | 6,872 | 1,013 | 60,040 | (82,456 | ) | (12,144 | ) | ||||||||||||||||