AIH - Earnings call transcript Q4 2020 | Aesthetic Medical International Holdings Group Limited

Dr. and morning, good you, everyone. Zhou, thank So,

fourth of Next of year ended XXXX. financial quarter XX, XXXX operation results management summarize I and on key results behalf the some team, December and the will unaudited for fiscal

mainly of – But December to the XX of which Hanfei same agreement the XXXX. post-acquisition performance entered Guangdong the revenue quarter Hanfei XX, our increased interest was of dispose July total let result. during slower subsequently begin to RMBXXX.X XX.X% Ltd. the XXXX. Hanfei in consolidation US$XX.X company The XX% the from about fourth recovery agreement Hanfei purchase impact to COVID-XX me million, Investment Management In less an but, year. period. to than fourth the of Co., The million due of quarter equity expectation, overall disposal XX% is into of the equity and So, XXXX, a on and into entered satisfactory by the Investment then than on with Guangdong Management excluding interest of

from financial results. controls the The August As of consolidated XX, analysis XXXX, purpose results. the below consolidation companies through unaudited the of December the company impact the in of of XXXX information Hanfei X, the provided comparability of exclude result the Hanfei’s for interest Hanfei’s obtained over

So an have due or of by primarily the total demand fourth decrease million number for service by the increased in to X.X% to quarter higher RMBXXX.X partially XXXX million USD$XX.X of an the XX.X% fourth fourth increased a the revenue margin during would a million profit of was total the the quarter offset increase in RMBXXX in profit customers period. representing with The XXXX. of million from RMBXXX.X was The in X.X% gross quarter gross XXXX. from XX.X%, representing of decrease XX.X% price,

to the gross gross the a have representing quarter would XX.X%, gross RMBXXX.X margin impact was have decrease from been consolidation of The an RMBXX.X of profit XX.X% from million of The services representing XXXX of Excluding and decrease been quarter profit X.X% from representing the gross results, XXXX. aesthetic fourth Hanfei’s a fourth of decrease would XX.X% million, RMBXXX.X increase margin fourth of from of profit non-surgical a in XXXX. the of the the profit quarter medical representing XX.X%, million was X%.

of the of decrease decrease margin representing fourth and results, would have representing of of of X.X%. impact services aesthetic of the RMBXX.X a Hanfei’s profit gross quarter the been have a million, profit would XXXX our medical gross from been Excluding consolidation XX.X% non-surgical the XX.X%,

treatment million increase XX.X% of of RMBXX.X So was The representing million, representing RMBXX XXXX. from profit a the of margin fourth XXXX. minimally aesthetic an of gross the the was invasive XX.X% quarter decrease in profit in XX.X%, gross quarter fourth

XXXX. decrease gross was treatments gross to profit million, of results, representing from impact a The the been would of RMBXX.X XXXX. Hanfei’s increase been the which quarter consolidation about fourth was in decrease XX%. of have in of of fourth gross would have of treatments profit quarter XX.X% of The compared energy-based representing the a gross profit of fourth a the margin profit XXXX. the XX.X%, quarter the million, decrease representing the decrease million million And representing X.X% Excluding aesthetic invasive XX.X%, minimally XX.X% of margin an from RMBXX.X RMBXX.X USD$X.X of

profit gross profit the consolidation the The was the would profit XX.X% RMBXXX.X results, of of treatment been quarter Hanfei’s RMBXX.X to increase energy-based representing XX.X%, is of a RMBXX.X treatments aesthetic which of was quarter fourth XXXX. surgical of from gross an from XX.X%, have which XXXX. and million, gross fourth been margin fourth is the of million a XX.X% profit would The million impact the decrease quarter of in XXXX. compared gross is from Excluding which the decrease a X% X.X% from have margin

margin million, quarter is Hanfei’s fourth of treatment decrease from compared XXXX healthcare of other gross The fourth RMBX.X general Excluding and service an is the RMBX.X XX.X% XX.X% have to treatment increase XX.X% And of representing of compared million, of decrease. which an impact aesthetic aesthetic profit representing results, the the RMBXX from was previous was the million gross services the increase margin consolidation from in surgical service year. the and profit the quarter would XX%, profit which is gross XXXX. a X.X% of been to gross a profit

were the revenue million, X.X% selling been year. of one-off is would and period, year-over-year the a of Company’s the from Excluding of aesthetic expenses the treatment gross compared margin and the Hanfei. of increase RMBXXX.X quarter total increase have the representing quarter medical XXXX about the profit because the been on to same XX.X%, million expenses RMBXXX.X million, represent the previous margin period. compared basis, the US$XX.X which gross XXXX, Selling general Selling healthcare of compared same of in the million, XX.X% have RMBX.X a the impacts of XX.X% impact an of Company’s which representing to profit other from of of service would is increased consolidation which an total Hanfei’s XX.X% to fourth revenue the of expenses fourth results,

from to primarily level in Hanfei, quarter same to expenses by from COVID-XX Excluding impact million the RMBXXX.X the selling the RMBXXX.X price relation in would quarter reduced fourth XX.X% XXXX marketing XXXX, in decreased in the the have outbreak. period from fourth due expenses the of of million the in

expenses and a So, XX.X% RMBXX.X general million, decrease. of administrative decrease representing - XX.X% the was

quarter impact from number non-current decrease of primarily period XX% the in significant representing fourth the due decreased fourth in million employee million to XXXX, is XXXX. a benefit of assets quarter in fourth which a the increase XXXX of RMBXX million Excluding of RMBX.X in in We the Hanfei’s, XXXX, the expenses. same from by of the impairment recognized of from RMBXX.X quarter

treatment quarter fourth devote During much strategically regions in Company the and focus certain performed the – decided regions and Asia regions China We XXXX, to to and properties, impairment impairment resources centers assessment trade southwest east China equipment of other goodwill, of centers of less South and in name treatment asset southern treatment and China. to China the in recognized and China. with east Asia plants, centers in other the of on respect

fourth during was quarter result RMBX.X RMBXX.X with the of Hanfei profits a XXXX share RMBX of million, of a fourth a RMBX.XX, the of of RMBXX.X in contributed recorded million. fourth fourth of of for for the fourth of loss RMBXX.X loss the million, on a XX.X% per which was million fourth with XXX% profit the the per Basic is compared loss RMBXX.X share about from the RMBX.XX decrease of fourth of a quarter XXXX. XXXX representing EBITDA fourth per the of XXXX. profit is profit RMBXX.X As and a on quarter US$X.XX, Adjusted loss of representing loss which of of is RMBX.X RMBXX.X which Company diluted loss of in decrease million per loss was the foregoing, in decrease net fourth RMBX.XX EBITDA of million XX.X% was US$X.X a RMBXX.X representing in XXXX. of quarter quarter of of Diluted share of in fourth XXXX. Adjusted the a RMBX.XX loss XXXX disposal XXXX. million for US$XX.X basic quarter loss XXXX. a of million of about loss of a million, was of the quarter million, compared from was the about share the for quarter XXXX million quarter compared the to The Hanfei of quarter fourth in million quarter the

XXXX results. the will talk fiscal about financial year unaudited I Now,

million, For RMBXXX.X XXXX, revenue about million. by our is which the US$XXX.X year to fiscal an X.X% increased

decrease Gross China. representing all X.X%. caused representing the have about that X.X%. Excluding temporary of decreased of the RMBXXX.X of the in pandemic is a consolidation revenue XX.X% US$XXX.X of million, decrease RMBXXX.X XX.X%, over million, the the treatment margin from was profit would primarily to results, million XXXX The shutdowns impact due Hanfei’s was the profit total centers to the of which by COVID-XX a gross impact

of a been margin to from impact response XX.X% the primarily to been profit pandemic Hanfei, Excluding XX.X% gross have decrease million, COVID-XX in XX.X%, the aesthetic that XXXX. the gross The have the would enhanced profit would compared of our from due gross treatment. profit decrease leads in to of to profit of a consolidation RMBXXX.X representing gross decreased XXXX, promotional which The XX.X%, was margin representing revenue RMBXXX treatment XX.X% XXXX. in per service decrease is million was a million RMBXXX.X from non-surgical efforts

minimally would million, have to impact profit of representing from been the the the Excluding of gross year service which was XX.X%, invasive XX.X%, the have a margin a decrease treatments from non-surgical gross profit X.X% compared Gross a decrease medical aesthetic is previous and previous would RMBXXX.X profit of decrease been compared the Hanfei’s, XX% representing year. was margin aesthetic of representing XX% profit XX%. decrease in to million, of RMBXXX.X XXXX. a Gross the

Hanfei’s a have and XXXX. RMBXXX.X been gross the treatment a previous in of profit of representing million, RMBXXX.X Excluding decrease million, decrease of was to profit decrease representing from a XX.% of decrease of XX.X% representing margin results, The the year. was from gross of the X.X% impact have profit profit gross XX.X%, treatments the margin decrease Gross representing from XX.X% XXXX. compared energy-based from minimally aesthetic XX.X%, would the XXXX, invasive been would a consolidation

XX%, the of Gross medical Excluding margin Hanfei’s decrease aesthetic which of of gross the year, XX.X% gross previous profit would decrease. XX.X% RMBXXX.X from was profit surgical from decrease which in million, XX.X% representing energy-based profit was have margin and gross a a increase have RMBXXX.X representing XX% service the XXXX. of been compared and profit is treatments million to a the been is a would margin XX.X%, impact the

the contribution a a aesthetic XX.X%, revenue profit of XX.X% RMBXXX.X representing total Selling from from of one-off the which represents of consolidation million expenses Company’s a total services XXXX, other from million general medical from increased of which profit Gross the RMBXX.X RMBXXX.X of RMBXXX.X excluding of would decrease XX.X% period RMBXX.X revenue, the previous from decrease representing million of the million million in aesthetic to XX.X% period Excluding a compared the healthcare and impact margin decrease. Hanfei. Hanfei’s, been gross XX.X%, which surgical results, the gross services medical decrease. the in decrease would healthcare service impact would And representing same a in the The X.X% been is RMBXX.X expenses Company’s a was have XX.X% gross XX%, million, the is general profit margin and would Selling of have of decrease selling XX.X% XX.X%, XXXX RMBXXX.X of XXXX. same from a margin of gross due X.X% which representing of XXXX. have been and been the Hanfei’s a was by services the the profit to profit million expenses is was XXXX. primarily year have

in spending administrative is of the million, expenses during season, pandemic, from decreased a Excluding by the benefit shopping a decreased which RMBXXX.X increase our XXXX. as decrease and selling representing which XXXX. XXXX RMBXXX.X expenses Hanfei’s, caused expenses a in in was the and in in would an Eleven COVID-XX of is decrease employees sales of million Chinese Double XX.X% impact season to due result by have X.X%, General

– increase our expenses under RMBXX.X general XX.X% due in have million an from in and Excluding XXXX. the representing impairment in plan. recognized impact by of million vesting the and XXXX of options of RMBX.X would XXXX, a We non-current of administrative in of from million to ESOP’s increased Hanfei’s assets increase RMBXX

to and and performed to China, impairment with quarter trade in Company and regions strategically the east other treatment of of plant and China. regions names centers We centers devote focus of China much centers equipment respect resources fourth south asset impairment treatment During other China. to recognized the China treatment in certain property, less regions XXXX, on and assessment goodwill, decided southwest of in

the EBITDA XXXX. XXXX. of a XXXX, million, RMBXXX of million compared of RMBXX.X of RMBX.XX of diluted compared representing in million for a of with Hanfei in million a loss was XXX.X% contributed representing fiscal from representing of to for XXXX. per XX.X% a million earnings profit RMBX.X of in loss from profit XXX.X% of share a Adjusted per million. XXXX diluted million, was per result profit a profit was Basic RMBXXX.X a share XXXX of foregoing, profit from Company a RMBXXX.X year XXXX in a RMBX.XX, RMBXX.X of the loss US$X.XX, compared RMBXXX.X a XXXX. the of the for The a XXXX. of same to was was Hanfei of profit in of decrease of the RMBXXX.X As of million, XXXX. disposal the per share of decrease EBITDA recorded for which during year million is RMBX.XX, and loss million RMBX.XX loss share about in was fiscal period Adjusted period same decrease loss RMBXXX.X period RMBX loss on post-acquisition basic

the accounted Now the active about treatments received surgical customers X.X% and the active customers, previously of Hanfei. respectively of one-off X.X% customer one-off for [Indiscernible] considering conducted XXXX, increase of X.X%, from results. XXX,XXX representing of from including X.X% of from of and without total the Company’s treatments X.X%, impact non-surgical XXXX. a XXX,XXX fourth I treatments, one-off and XX.X% considering quarter fourth will of including the impact procedure had Company increase Hanfei, and total talk of increase one least in the XX,XXX treatments in quarter a increase company, treatments, considering from Repeated operational an in impact fourth XX,XXX base and an The who our of at XXXtreatments, the as XXX,XXX XXXX repeat XXX XXX,XXX quarter defined the Without surgical XXX,XXX treatments, the customers non-surgical from in impact from representing conducted the a one-off treatments the Company’s treatments, the surgical XX,XXX non-surgical same the and XX,XXX surgical for in treatments XXXX X.X% active considering period customer XXXX, of an XX.X% total from of and respectively XXX,XXX Without treatments in XXXX. total treatments, without non-surgical Hanfei. account Hanfei, XXX,XXX Company of base and and

quick Now a balance summary of flows. cash our sheet and for

disposal activity XX, cash to investing of year, our of due for activities Net the On interest securities repurchase developments which to worth The the and trading conditions, of Board subject XXXX. market approved As December as cash XX% US$X.X depending activity time-to-time of agreement previous RMBXXX.X COVID-XX the the to was to has was cash XXXX, up to financing Directors period. million applicable On used compared entered RMBXX.X open December the in the than its we on cash company, net of the and December XXXX, of satisfactory factors, which of of the equivalents general RMBXX.X as share U$X.X XXth October its million the a to RMBXXX.X until under XX, expected shareholder. The year. program, from was Company the with is its mainly generated overall that to the July in cash the Company trading post-acquisition in of the XX, compared about of a purchase into policy. equity million, from slower authorized entered Company acquire agreement XXXX, and than shareholder. original during the from was XXXX, XX% net million performance Company laws net ADS other operating recovery with generated of million. on in XXXX, same of XX a million XXth the cash Hanfei repurchase the price December other as announced Company’s interest in well share million The into equity to and market had and is Hanfei less of million of dispose Hanfei RMBXX.X RMBX.X used activities operating

million. and approximately Company As of repurchased the was of the XX% is XXXX, released Aesthetic of XXXX, into date X, January of which the XXXX, Aomei a industry RMBXX.X million. interest subsidiary completed ADS total XX,XXX with agreement treatment Aomei white a has aesthetic Aomei Paper the the Treatment Beijing Company was of XXXX on US$X.X In consideration in about the jointly is Company. equity of China to Beijing the Ltd. White Investment the release, and Consultancy The transaction total and this Chinese a Industry On Forbes October for entered Beijing in of become acquire China. have February consideration Yixin first paper which

For outbreak, the business the outlook, the recovers gradually operations. as experienced aftermath has the Company the of from COVID-XX recovery China business in

to While there the cannot of the expects accurately time will in the business the to management and views Company’s financial conclusively reflects still based pandemic team current Company for the the the the and uncertainty at continue and on COVID-XX, development its information outbreak subject since impacts COVID-XX the of currently revenue recover of operations negative its possible subject may monitor quarter in demand the Such and the to gradually pandemic impact any uncertainty change. this on first of COVID-XX available duration will expectation to is and that evaluate The and development XXXX. the and of Company. the Company time of future, at be Company’s preliminary be the still estimated market resulting

to then the operating has includes XX outflow from of Now current million The the December million RMBXX. company year net XXXX. resources. which capital RMBX.X liquidity cash the XXXX, of loss for of operating the borrowings and of liabilities of net about current year I and XX, RMBXXX and December of million as would end talk like million RMBXXX

flow completed XX approximately four acquisitions, end, the a after potential months has of release. in this for remaining year acquisition the cash which in next of million date the result consideration RMBX Company During the

periods. and the like quarter other due on continue Company first obligations of that it financial gradual to of to and any potential its and its sources they centers. of concluded post-COVID-XX the financing, to during meet as adverse of next months, We integrating financial of COVID-XX, plan future its continuing And with the would when the its aesthetic XXXX down stay medical industry caused Company for flow XXXX, and the the This XXXX. our resources regarding cash in half uncertainty and in company's to temporarily the some I the the the impacts aesthetic focused of During shut on outbreak treatment change. first material revenue has year considering sufficient from management, consideration XX and development the fall color from expenses into recovery of outbreak, After cash add subsequent impacts subject bank business flow operation the the strategy taking COVID-XX. last, expected operations borrowings cost on its of funds the

aesthetic industry services, and and market been recognitions. products niche consumption level During diversified of demand, with from the evolving years, the has few more standardizing higher past through consumption, higher and mass brand medical

different competitive medical our business improve To scale. need company aesthetic accordingly to more and strengths, end, through service with we our this strive quickly that market ability to competitive increase duck to scale full-cycle our So profitability. an The medical and a to larger and provide we market share our more to become importantly well-recognized capacity. brands trend,

our valuation. clear. is to strategy is funding good It to Our make good capacity with use consolidate crystal attractive of targets

the any would to turn discussion to Kate Kate? for questions. operator the Now, over I like

Pengwu Zhou	Chairman and CEO
Guanhua Wu	Chief Financial Officer

Aesthetic Medical International Holdings Group Limited (PAIYY) 20 Apr 212020 Q4 Earnings call transcript