As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 6/26/20  Aesthetic Medical Int’l Hold… Ltd 6-K         6/30/20    2:361K                                   Toppan Merrill/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 6-K         Report by a Foreign Issuer                          HTML     14K 
 2: EX-99.1     Miscellaneous Exhibit                               HTML    209K 

 

Revenues

 

Total revenue was RMB91.0 million (US$12.9 million), a decrease of 49.7% from RMB180.9 million in the first quarter of 2019, primarily due to the temporary shutdown of the Company’s treatment centers in February and March 2020, partially offset by the satisfactory performance in January 2020 as a result of enhanced marketing efforts before the Chinese New Year.

 

Revenue from non-surgical aesthetic medical services was RMB47.7 million (US$6.7 million), a decrease of 47.7% from RMB91.2 million in the first quarter of 2019.  Revenue from minimally invasive aesthetic treatments was RMB26.1 million (US$3.7 million), a decrease of 39.4% from RMB43.1 million in the first quarter of 2019. Revenue from energy-based treatments was RMB21.6 million (US$3.1 million), a decrease of 55.1% from RMB48.1 million in the first quarter of 2019.

 

Revenue from surgical aesthetic medical services was RMB39.8 million (US$5.6 million), a decrease of 44.9% from RMB72.2 million in the first quarter of 2019.

 

Revenue from general healthcare services and other aesthetic medical services was RMB3.5 million (US$0.5 million), a decrease of 80.0% from RMB17.5 million in the first quarter of 2019.

 

Cost of sales and services rendered

 

Cost of sales and services rendered was RMB56.1 million (US$7.9 million), a decrease of 6.0% from RMB59.7 million in the first quarter of 2019.

 

Gross profit

 

Gross profit was RMB34.9 million (US$4.9 million), a decrease of 71.2% from RMB121.2 million in the first quarter of 2019, primarily as a result of the decrease in revenue. Gross profit margin was 38.3%, a decrease of 28.7 percentage points from 67.0% in the first quarter of 2019, mainly due to the existence of fixed costs such as amortisation and depreciation, coupled with the decrease in revenue.

 

 

Gross profit of non-surgical aesthetic medical services was RMB17.1 million (US$2.4 million), a decrease of 74.6% from RMB67.3 million in the first quarter of 2019. Gross profit margin was 35.8%, a decrease from 73.8% in the first quarter of 2019.

 

Gross profit of minimally invasive aesthetic treatments was RMB10.9 million (US$1.5 million), a decrease of 64.3% from RMB30.5 million in the first quarter of 2019. Gross profit margin was 41.8%, a decrease from 70.8% in the first quarter of 2019.

 

Gross profit of energy-based treatments was RMB6.2 million (US$0.9 million), a decrease of 83.2% from RMB36.8 million in the first quarter of 2019. Gross profit margin was 28.7%, a decrease from 76.5% in the first quarter of 2019.

 

Gross profit of surgical aesthetic medical services was RMB17.7 million (US$2.5 million), a decrease of 58.5% from RMB42.6 million in the first quarter of 2019. Gross profit margin was 44.5%, a decrease from 59.0% in the first quarter of 2019.

 

Gross profit of general healthcare services and other aesthetic medical services was RMB0.1million (US$0.01 million), a decrease of 99.1% from RMB11.3 million in the first quarter of 2019. Gross profit margin was 2.9%, a decrease from 64.6% in the first quarter of 2019.

 

Selling expenses

 

Selling expenses were RMB78.1 million (US$11.0 million), representing 85.8% of the Company’s total revenue of the same period, compared to selling expenses of RMB75.7 million in the first quarter of 2019, which represented 41.8% of the Company’s total revenue of the same period. Selling expenses increased on a year-over-year basis, primarily because, consistent with previous years, the Company enhanced its marketing efforts before the Chinese New Year, and a significant portion of advertising and marketing expense were incurred in March 2020 to attract customers and boost sales when our operations resumed.

 

 

General and administrative expenses

 

General and administrative expenses were RMB50.9 million (US$7.2 million), an increase of 79.9% from RMB28.3 million in the first quarter of 2019, primarily due to the increase of share-based compensation expenses.

 

(Loss)/profit for the period

 

As a result of the foregoing, the Company recorded a loss for the first quarter of 2020 of RMB83.1 million (US$11.7 million), compared with a profit of RMB22.7 million in the first quarter of 2019. Basic loss per share was RMB1.22 (US$0.17), compared with basic earnings per share of RMB0.53 in the first quarter of 2019. Diluted loss per share was RMB1.22 (US$0.17), compared with diluted earnings per share of RMB0.38 in the first quarter of 2019.

 

Certain Non-IFRS items

 

EBITDA for the first quarter of 2020 was a loss of RMB70.6 million (US$10.0 million), a decrease of 228.1% from RMB55.1 million in the first quarter of 2019.

 

Adjusted profit for the first quarter of 2020 was a loss of RMB58.2 million (US$8.2 million), a decrease of 328.2% from RMB25.5 million in the first quarter of 2019.

 

Adjusted EBITDA for the first quarter of 2020 was a loss of RMB45.7 million (US$6.5 million), a decrease of 180.6% from RMB56.7 million in the first 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.

 

 

First 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 60.7% of the Company’s active customer base in the first quarter of 2020.

 

Number of treatments

 

The Company conducted a total of 66,946 treatments, including 14,541 surgical treatments and 52,405 non-surgical treatments, in the first quarter of 2020, representing a decrease of 3.2% and 22.4% and an increase of 3.9%, respectively, from 69,179 total treatments, 18,728 surgical treatments and 50,451 non-surgical treatments in the first quarter of 2019.

 

Certain balance sheet item

 

Cash and cash equivalents amounted to RMB100.6 million (US$14.2 million) as of March 31, 2020, compared to RMB154.5 million as of December 31, 2019.

 

Certain cash flow items

 

Net cash used in operating activities was RMB19.0 million (US$2.7 million) in 2020, compared to net cash generated from operating activities of RMB43.6 million in 2019.

 

Net cash used in investing activities was RMB26.7 million (US$3.8 million) in 2020, compared to RMB36.1 million in 2019.

 

Net cash used in financing activities was RMB8.5 million (US$1.2 million) in 2020, compared to RMB20.3 million in 2019.

 

 

Liquidity and capital resources

 

The Company had net current liabilities of RMB101.7 million as at March 31, 2020. During the first quarter of 2020, due to the outbreak of COVID-19, the Company shut down its aesthetic treatment centers in February and March 2020. This created a material and adverse impacts on its revenue and cash flow for the first quarter of 2020 with potential continuing impacts on subsequent periods. After considering its expected cash flow from future operations including cost cutting measures and available borrowing facilities, the Company concluded that it has sufficient financial resources to meet its financial obligations as and when they fall due in the coming 12 months.

 

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 RMB7.0808 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 March 31, 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 share-based compensation expense, other one-off expenses including professional fees in relation to our financing activities but are not capitalized and IT-related expenses paid to a related party pursuant to a service agreement, which was expired in June 2019.

 

Adjusted profit represents profit for the period/year, adjusted to exclude interest expense on convertible note, share-based compensation expense, other one-off expenses including professional fees in relation to our financing activities but are not capitalized and IT-related expenses paid to a related party pursuant to a service agreement, which was expired in June 2019.

 

 

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.

 

Other Developments

 

The Company continued to expand our footprint. On December 30, 2019, the Company announced the openings of two new satellite clinics — Fenghua Pengai Aesthetic Clinic and Deqing Pengai Aesthetic Clinic, in each of which the Company holds a majority equity interest. In March 2020, the Company entered into definitive agreements (the “Agreements”) to acquire controlling interest in two treatment centers. Pursuant to the Agreements, the Company acquired, in March 2020, 80% equity interest in Shanghai Mingyue Aesthetic Medical Co., Ltd., a high-end aesthetic medical service provider in Shanghai, and, in April 2020, acquired 70% equity interest in Xi’an New Pengai Yueji Aesthetic Medical Clinic Co., Ltd., an aesthetic medical service provider in Xi’an, Shaanxi.

 

The Company is firmly committed to its customers and community. In January 2020, the Company launched the “Four Beauties,” a new set of hyaluronic acid-based skincare products. In February 2020, the Company carried out a charity campaign and made donation of approximately RMB1.3 million of medical supplies to help combat COVID-19. Through its treatment centers across the country, the Company intensified the efforts to help people in need. The Company organized charity fund raising activities, collected and donated approximately RMB0.2 million from its employees and their family members, donated protective masks, thermometers

 

 

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		31 March		31 March
		2019		2020		2020
		RMB’000		RMB’000		US$’000
				(Unaudited)		(Unaudited)
ASSETS
Non-current assets
Property, plant and equipment		519,323		504,408		71,236
Investment properties		15,373		15,025		2,122
Intangible assets		175,417		183,004		25,845
Investments accounted for using the equity method		10,256		9,875		1,395
Prepayments and deposits		42,298		62,973		8,893
Deferred income tax assets		19,774		33,523		4,734
		782,441		808,808		114,225
Current assets
Inventories		26,120		26,816		3,787
Trade receivables		9,705		9,015		1,273
Other receivables, deposits and prepayments		71,278		72,782		10,279
Amounts due from related parties		3,101		2,745		388
Cash and cash equivalents		154,490		100,575		14,204
		264,694		211,933		29,931
Total assets		1,047,135		1,020,741		144,156
EQUITY AND LIABILITIES
Equity attributable to owners of the Company
Share capital		469		469		67
Treasury shares		(41	)	(41	)	(6	)
Accumulated losses		(242,232	)	(321,332	)	(45,381	)
Other reserves		789,285		811,549		114,613
		547,481		490,645		69,293
Non-controlling interests		43,117		39,074		5,518
Total (deficit)/equity		590,598		529,719		74,811

 

 

AESTHETIC MEDICAL INTERNATIONAL HOLDINGS GROUP LIMITED

 

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

 

		31 December		31 March		31 March
		2019		2020		2020
		RMB’000		RMB’000		US$’000
				(Unaudited)		(Unaudited)
LIABILITIES
Non-current liabilities
Borrowings		12,917		6,229		880
Lease liabilities		165,615		158,912		22,443
Deferred income tax liabilities		12,703		12,222		1,726
		191,235		177,363		25,049
LIABILITIES
Current liabilities
Trade payables		17,017		21,507		3,037
Accruals, other payables and provisions		58,439		93,299		13,175
Amounts due to related parties		626		585		83
Contract liabilities		5,542		4,205		594
Borrowings		127,470		140,024		19,775
Lease liabilities		36,266		35,729		5,046
Current income tax liabilities		19,942		18,310		2,586
		265,302		313,659		44,296
Total liabilities		456,537		491,022		69,345
Total equity and liabilities		1,047,135		1,020,741		144,156

 

 

AESTHETIC MEDICAL INTERNATIONAL HOLDINGS GROUP LIMITED

 

RECONCILIATIONS OF IFRS AND NON-IFRS RESULTS

 

		For the Three Months Ended March 31,
		2019		2020		2020
		RMB’000		RMB’000		US$’000
EBITDA and Adjusted EBITDA
Profit/(loss) before income tax for the period		28,149		(98,402	)	(13,897	)
Adjustments
+ Finance costs		5,984		5,224		738
+ Amortisation and depreciation		20,981		22,614		3,194
EBITDA		55,114		(70,564	)	(9,965	)
+ Share-based compensation expense		—		21,558		3,045
+ Professional fees		340		3,325		470
+ IT-related expenses paid to a related party		1,250		—		—
Adjusted EBITDA		56,704		(45,681	)	(6,450	)

 

		For the Three Months Ended March 31,
		2019		2020		2020
		RMB’000		RMB’000		US$’000
Adjusted Profit
Profit/(loss) for the period		22,709		(83,115	)	(11,738	)
Adjustments
+ Interest expense on convertible note		1,185		—		—
+ Share-based compensation expense		—		21,558		3,045
+ Professional fees		340		3,325		470
+ IT-related expenses paid to a related party		1,250		—		—
Adjusted Profit		25,484		(58,232	)	(8,223	)