UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 


 

Form 6-K

 


 

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of April 2020

 

Commission File Number: 001-39088

 


 

Aesthetic Medical International Holdings Group Limited

 


 

1122 Nanshan Boulevard, Nanshan District

Shenzhen, Guangdong Province, 518052

People’s Republic of China

(Address of principal executive offices)

 


 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F x   Form 40-F o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

 

 

 


 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

 

Aesthetic Medical International Holdings Group Limited

 

 

 

 

 

 

By:

/s/ Wu Guanhua

 

 

Name:

Wu Guanhua

 

 

Title:

Chief Financial Officer

 

Date: April 24, 2020

 

2


 

EXHIBIT INDEX

 

Exhibit No.

 

Description

 

 

 

99.1

 

Press Release — Aesthetic Medical International Holdings Group Limited Reports Fourth Quarter and Fiscal Year 2019 Unaudited Financial Results

 

3


Exhibit 99.1

 

Aesthetic Medical International Holdings Group Limited Reports Fourth Quarter and Fiscal Year 2019 Unaudited Financial Results

 

Shenzhen, China, April 24, 2020 — Aesthetic Medical International Holdings Group Limited (the “Company” or Nasdaq: AIH), a leading provider of aesthetic medical services in China, today announces its financial results for the fourth quarter and fiscal year ended December 31, 2019.

 

Dr. Zhou Pengwu, the Chairman and CEO of the Company, commented, “We are excited to announce that we achieved record revenues and gross profit for fiscal year 2019, which represented a year-over-year increase of 14.2% and 18.0%, respectively. We continued to identify, acquire and integrate treatment centers as one of our core strategies, and established five and acquired three treatment centers (for two of which, by acquiring additional equity interest) in 2019. We believe that our customers associate our brand with trust and reliability. Active customers continued to grow rapidly with a year-over-year increase of 43.0% and reached 255,395 for 2019, and repeat customers accounted for 53.8% of active customer base for 2019. In 2019, the total number of treatments was 536,469, an increase of 45.9% from 367,656 in 2018.”

 

Dr. Zhou continued, “We joined the fight against COVID-19 in China. Our top priority was to ensure the health and safety of our customers, employees and their families, and we postponed the resumption of operations of its aesthetic treatment centers in China after the Chinese New Year holiday in 2020. Since late February 2020, we have taken proper precautionary measures and gradually reopened our aesthetic treatment centers. By the end of March, all of our aesthetic treatment centers in China resumed operations. We will continue monitoring the latest developments and taking appropriate measures in response.”

 


 

Fourth Quarter 2019 Unaudited Financial Highlights

 

·                  Total revenue was RMB238.1 million (US$34.2 million), an increase of 11.5% from RMB213.5 million in the fourth quarter of 2018.

 

·                  Gross profit was RMB162.2 million (US$23.3 million), an increase of 7.6% from RMB150.7 million in the fourth quarter of 2018.

 

·                  Gross margin was 68.1%, a decrease of 2.5 percentage points from 70.6% in the fourth quarter of 2018.

 

·                  Loss for the period was RMB60.6 million (US$8.7 million), compared with a loss of RMB281.3 million in the fourth quarter of 2018.

 

·                  EBITDA1 for the period was RMB-35.2 million (US$-5.1 million), a decrease of 86.7% from RMB-264.1 million in the fourth quarter of 2018.

 

·                  Adjusted profit1 for the period was RMB7.0 million (US$1.0 million), a decrease of 58.6% from RMB16.9 million in the fourth quarter of 2018. We recognized net effect of RMB2.3 million expenses, including depreciation expense of RMB11.1 million for right-of-use asset, finance cost for lease liabilities of RMB3.2 million deducted by rental expenses of RMB12.0 million payable according to the contract, due to adoption of IFRS 16.

 

·                  Adjusted EBITDA1 for the period was RMB31.8 million (US$4.6 million), a decrease of 3.6% from RMB33.0 million in the fourth quarter of 2018.

 

·                  Basic loss per share was RMB0.99 (US$0.14), compared with basic loss per share of RMB6.87 in the fourth quarter of 2018. Diluted loss per share was RMB0.99 (US$0.14), compared with diluted loss per share of RMB6.87 in the fourth quarter of 2018.

 


 

Fiscal Year 2019 Unaudited Financial Highlights

 

·                  Total revenue was RMB869.1 million (US$124.8 million), an increase of 14.2% from RMB761.3 million in 2018.

 

·                  Gross profit was RMB593.1 million (US$85.2 million), an increase of 18.0% from RMB502.7 million in 2018.

 

·                  Gross margin was 68.2%, an increase of 2.2 percentage points from 66.0% in 2018.

 

·                  Profit for the year was RMB138.3million (US$19.9 million), compared with a loss of RMB252.5 million in 2018.

 

·                  EBITDA1 for the year was RMB260.5 million (US$37.4 million), an increase of 235.3% from RMB-192.6 million in 2018.

 

·                  Adjusted profit1 for the year was RMB69.1 million (US$9.9 million), an increase of 19.3% from RMB57.9 million in 2018. We recognized net effect of RMB9.2 million expenses, including depreciation expense of RMB45.1 million for right-of-use asset, finance cost for lease liabilities of RMB12.8 million deducted by rental expenses of RMB48.7 million payable according to the contract, due to adoption of IFRS 16.

 

·                  Adjusted EBITDA1 for the year was RMB187.1 million (US$26.9 million), an increase of 65.4% from RMB113.1 million in 2018.

 

·                  Basic earnings per share was RMB2.96 (US$0.43), compared with basic loss per share of RMB6.22 in 2018. Diluted loss per share was RMB0.78 (US$0.11), compared with diluted loss per share of RMB6.22 in 2018.

 


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.

 


 

Fourth Quarter 2018 and 2019 Operational Highlights

 

 

 

For the Three Months Ended December 31,

 

 

 

2018

 

2019

 

% Change

 

 

 

Number

 

% of Total

 

Number

 

% of Total

 

Number

 

New Customers

 

22,939

 

46.0

%

38,714

 

46.2

%

68.8

%

Repeat Customers

 

26,958

 

54.0

%

45,131

 

53.8

%

67.4

%

Total Active Customers

 

49,897

 

100.0

%

83,845

 

100.0

%

68.0

%

 

·                  Repeat customers accounted for 53.8% of active customer base.

 

·                  The total number of treatments was 176,052, an increase of 43.9% from 122,334 in the fourth quarter of 2018.

 

Fiscal Year 2018 and 2019 Operational Highlights

 

 

 

For the Year Ended December 31,

 

 

 

2018

 

2019

 

% Change

 

 

 

Number

 

% of Total

 

Number

 

% of Total

 

Number

 

New Customers

 

82,004

 

45.9

%

117,974

 

46.2

%

43.9

%

Repeat Customers

 

96,653

 

54.1

%

137,421

 

53.8

%

42.2

%

Total Active Customers

 

178,657

 

100.0

%

255,395

 

100.0

%

43.0

%

 

·                  Repeat customers accounted for 53.8% of active customer base.

 

·                  The total number of treatments was 536,469 in fiscal year 2019, an increase of 45.9% from 367,656 in the same period of 2018.

 


 

Fourth Quarter 2019 Unaudited Financial Results

 

 

 

For the Three Months Ended December 31,

 

(RMB millions, except per share data and percentages)

 

2019

 

2018

 

% Change

 

Revenue

 

238.1

 

213.5

 

11.5

%

Non-surgical aesthetic medical services

 

143.7

 

112.0

 

28.3

%

Minimally invasive aesthetic treatments

 

68.9

 

58.8

 

17.2

%

Energy-based treatments

 

74.8

 

53.2

 

40.6

%

Surgical aesthetic medical services

 

80.9

 

90.2

 

-10.3

%

General healthcare services and other aesthetic medical services

 

13.5

 

11.3

 

19.5

%

Gross profit

 

162.2

 

150.7

 

7.6

%

Gross margin

 

68.1

%

70.6

%

-2.5 pp

*

Loss for the period

 

(60.6

)

(281.3

)

78.5

%

Profit margin

 

-25.5

%

-131.8

%

106.3 pp

*

EBITDA

 

(35.2

)

(264.1

)

86.7

%

Adjusted EBITDA**

 

31.8

 

33.0

 

-3.6

%

Adjusted EBITDA margin

 

13.4

%

15.5

%

-2.1 pp

*

Adjusted profit**

 

7.0

 

16.9

 

-58.6

%

Adjusted profit margin

 

2.9

%

7.9

%

-5.0 pp

*

Basic loss per share

 

(0.99

)

(6.87

)

85.6

%

Diluted loss per share

 

(0.99

)

(6.87

)

85.6

%

 


Notes:

 

*   pp represents percentage points

 

** Refer to below “Non-IFRS Financial Measures”

 

Revenues

 

Total revenue was RMB238.1 million (US$34.2 million), an increase of 11.5% from RMB213.5 million in the fourth quarter of 2018, primarily due to the rapid growth of non-surgical aesthetic medical services especially energy-based treatments.

 


 

Revenue from non-surgical aesthetic medical services was RMB143.7 million (US$20.6 million), an increase of 28.3% from RMB112.0 million in the fourth quarter of 2018.  Revenue from minimally invasive aesthetic treatments was RMB68.9 million (US$9.9 million), an increase of 17.2% from RMB58.8 million in the fourth quarter of 2018. Revenue from energy-based treatments was RMB74.8 million (US$10.7 million), an increase of 40.6% from RMB53.2 in the fourth quarter of 2018. The rapid growth of non-surgical aesthetic medical services is a result of the Company’s effective strategy to attract customers by offering a small number of low average selling price treatments, holding promotional events (such as VIP sale events to celebrate our listing and a marketing campaign during China’s November online shopping festival), and enhanced advertising efforts.

 

Revenue from surgical aesthetic medical services was RMB80.9 million (US$11.6 million), a decrease of 10.3% from RMB90.2 million in the fourth quarter of 2018, primarily due to the decline of average selling price, partially offset by the increase of number of treatments .

 

Revenue from general healthcare services and other aesthetic medical services was RMB13.5 million (US$1.9 million), an increase of 19.5% from RMB11.3 million in the fourth quarter of 2018, primarily due to the fast growth of revenue from aesthetic dentistry department in the fourth quarter of 2019.

 

Cost of sales and services rendered

 

Cost of sales and services rendered was RMB75.9 million (US$10.9 million), an increase of 20.9% from RMB62.8 million in the fourth quarter of 2018, primarily due to the increase of number of treatments across different segments.

 

Gross profit

 

Gross profit was RMB162.2 million (US$23.3 million), an increase of 7.6% from RMB150.7 million in the fourth quarter of 2018. Gross profit margin was 68.1%, a decrease of 2.5 percentage points from 70.6% in the fourth quarter of 2018 as we adjusted our pricing strategy to market more low ASP products to attract young customers and stay competitive and enhanced marketing and advertising efforts.

 


 

Gross profit of non-surgical aesthetic medical services was RMB95.8 million (US$13.8 million), an increase of 13.9% from RMB84.1 million in the fourth quarter of 2018. Gross profit margin was 66.7%, a decrease from 75.1% in the fourth quarter of 2018.

 

Gross profit of minimally invasive aesthetic treatments was RMB46.0 million (US$6.6 million), an increase of 0.7% from RMB45.7 million in the fourth quarter of 2018. Gross profit margin was 66.8%, a decrease from 77.7% in the fourth quarter of 2018.

 

Gross profit of energy-based treatments was RMB49.8 million (US$7.2 million), an increase of 29.7% from RMB38.4 million in the fourth quarter of 2018. Gross profit margin was 66.5%, a decrease from 72.2% in the fourth quarter of 2018.

 

Gross profit of surgical aesthetic medical services was RMB60.5 million (US$8.7 million), a decrease of 3.7% from RMB62.8 million in the fourth quarter of 2018. Gross profit margin was 74.8%, an increase from 69.6% in the fourth quarter of 2018.

 

Gross profit of general healthcare services and other aesthetic medical services was RMB5.9 million (US$0.8 million), an increase of 55.3% from RMB3.8 million in the fourth quarter of 2018. Gross profit margin was 43.7%, an increase from 33.6% in the fourth quarter of 2018.

 

Selling expenses

 

Selling expenses were RMB144.3 million (US$20.7 million), representing 60.6% of the Company’s total revenue of the same period, compared to selling expenses of RMB95.6 million in the fourth quarter of 2018, which represented 44.8% of the Company’s total revenue of the same period. Selling expenses increased by 50.9% from the fourth quarter of 2018, as a result of our enhanced marketing efforts in both traditional and new media platforms.

 


 

General and administrative expenses

 

General and administrative expenses were RMB76.6 million (US$11.0 million), an increase of 103.2% from RMB37.7 million in the fourth quarter of 2018, primarily due to the increase in our employee benefit expenses of share-based compensation and the expenses related to our initial public offering and listing.

 

Loss for the period

 

Loss for the fourth quarter of 2019 was RMB60.6 million (US$8.7 million), compared with a loss of RMB281.3 million in the fourth quarter of 2018. Basic loss per share was RMB0.99 (US$0.14), compared with basic loss per share of RMB6.87 in the fourth quarter of 2018. Diluted loss per share was RMB0.99 (US$0.14), compared with diluted loss per share of RMB6.87 in the fourth quarter of 2018.

 

Certain Non-IFRS items

 

Loss for the fourth quarter of 2019 was RMB60.6 million (US$8.7 million), compared with a loss of RMB281.3 million in the fourth quarter of 2018.

 

EBITDA for the fourth quarter of 2019 was RMB-35.2 million (US$-5.1 million), a decrease of 86.7% from RMB-264.1 million in the fourth quarter of 2018.

 

Adjusted profit for the fourth quarter of 2019 was RMB7.0 million (US$1.0 million), a decrease of 58.6% from RMB16.9 million in the fourth quarter of 2018.

 

Adjusted EBITDA for the fourth quarter of 2019 was RMB31.8 million (US$4.6 million), a decrease of 3.6% from RMB33.0 million in the fourth quarter of 2018.

 


 

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.

 

Fourth Quarter 2018 and 2019 Operational Results

 

Repeat customer ratio

 

Repeat customers, defined as active customers who had previously received at least one procedure from the Company, accounted for 53.8% of the Company’s active customer base in the fourth quarter of 2019.

 

Number of treatments

 

The Company conducted a total of 176,052 treatments, including 23,910 surgical treatments and 141,081 non-surgical treatments, in the fourth quarter of 2019, representing an increase of 43.9%, 7.0%, and 100.8%, respectively, from 122,334 total treatments, 22,345 surgical treatments, and 70,246 non-surgical treatments in the fourth quarter of 2018.

 

For fiscal year 2019, the Company conducted a total of 536,469 treatments, including 90,658 surgical treatments and 404,316 non-surgical treatments, in 2019, representing an increase of 45.9%, 42.6%, and 71.8%, respectively, from 367,656 total treatments, 63,553 surgical treatments, and 235,367 non-surgical treatments in 2018.

 


 

Fiscal Year 2018 and 2019 Unaudited Financial Results

 

 

 

For the Year Ended December 31,

 

(RMB millions, except per share data and percentages)

 

2019

 

2018

 

% Change

 

Revenue

 

869.1

 

761.3

 

14.2

%

Non-surgical aesthetic medical services

 

489.6

 

373.3

 

31.2

%

Minimally invasive aesthetic treatments

 

224.2

 

199.1

 

12.6

%

Energy-based treatments

 

265.4

 

174.2

 

52.4

%

Surgical aesthetic medical services

 

319.2

 

313.9

 

1.7

%

General healthcare services and other aesthetic medical services

 

60.3

 

74.1

 

-18.6

%

Gross profit

 

593.1

 

502.7

 

18.0

%

Gross margin

 

68.2

%

66.0

%

2.2 pp

*

Profit/(loss) for the year

 

138.3

 

(252.5

)

154.8

%

Profit margin

 

15.9

%

-33.2

%

49.1 pp

*

EBITDA

 

260.5

 

(192.6

)

235.3

%

Adjusted EBITDA**

 

187.1

 

113.1

 

65.4

%

Adjusted EBITDA margin

 

21.5

%

14.9

%

6.6 pp

*

Adjusted profit**

 

69.1

 

57.9

 

19.3

%

Adjusted profit margin

 

8.0

%

7.6

%

0.4 pp

*

Basic (loss)/earnings per share

 

2.96

 

(6.22

)

147.6

%

Diluted (loss)/earnings per share

 

(0.78

)

(6.22

)

87.5

%

 


Notes:

 

*   pp represents percentage points

 

** Refer to below “Non-IFRS Financial Measures”

 

Revenues

 

Total revenue was RMB869.1 million (US$124.8 million), an increase of 14.2% from RMB761.3 million in 2018.

 


 

Revenue from non-surgical aesthetic medical services was RMB489.6 million (US$70.3 million), an increase of 31.2% from RMB373.3 million in 2018, as a result of primarily resulting from the acquisition of new customers through our successful marketing efforts, particularly the increased use of new media channels. Revenue from minimally invasive aesthetic treatments was RMB224.2 million (US$32.2 million), an increase of 12.6% from RMB199.1 million in 2018. Revenue from energy-based treatments was RMB265.4 million (US$38.1 million), an increase of 52.4% from RMB174.2 million in 2018.

 

Revenue from surgical aesthetic medical services was RMB319.2 million (US$45.9 million), an increase of 1.7% from RMB313.9 million in 2018. The increase was primarily due to an increase in number of treatments, partially offset by the decline of average selling price resulted from change of product mix.

 

Revenue from general healthcare services and other aesthetic medical services was RMB60.3 million (US$8.7 million), a decrease of 18.6% from RMB74.1 million in 2018, primarily due to our strategic shift towards aesthetic medical services.

 

Cost of sales and services rendered

 

Cost of sales and services rendered was RMB275.9 million (US$39.6 million), an increase of 6.7% from RMB258.6 million in 2018, primarily as a result of an increase in number of treatment across different segments.

 

Gross profit

 

Gross profit was RMB593.1 million (US$85.2 million), an increase of 18.0% from RMB502.7 million in 2018. Gross margin was 68.2%, an increase of 2.2 percentage points from 66.0% in 2018, primarily due to the significant increase in the number of non-surgical procedures performed, especially energy-based treatments, which had a relatively higher margin, partially offset by our adjusted pricing strategy.

 


 

Gross profit of non-surgical aesthetic medical services was RMB350.3 million (US$50.3 million), an increase of 39.3% from RMB251.5 million in 2018. Gross profit margin was 71.5%, an increase from 67.4% in 2018.

 

Gross profit of minimally invasive aesthetic treatments was RMB154.8 million (US$22.2 million), an increase of 10.9% from RMB139.6 million in 2018. Gross profit margin was 69.0%, a decrease from 70.1% in 2018.

 

Gross profit of energy-based treatments was RMB195.5 million (US$28.1 million), an increase of 74.7% from RMB111.9 million in 2018. Gross profit margin was 73.7%, an increase from 64.2% in 2018.

 

Gross profit of surgical aesthetic medical services was RMB211.1 million (US$30.3 million), a decrease of 1.2% from RMB208.5 million in 2018. Gross profit margin was 66.1%, a decrease from 66.4% in 2018.

 

Gross profit of general healthcare services and other aesthetic medical services was RMB31.7 million (US$4.6 million), a decrease of 25.9% from RMB42.8 million in 2018. Gross profit margin was 52.6%, a decrease from 57.7% in 2018, as a result of the government’s stricter regulations on the pricing of general health services provided by privately-owned hospitals.

 

Selling expenses

 

Selling expenses were RMB413.1 million (US$59.3 million), representing 47.5% of the Company’s total revenue of the same period, compared to selling expenses of RMB333.5 million in 2018, which represented 43.8% of the Company’s total revenue of the same period. Selling expenses increased by 23.9% from 2018, as a result of our enhanced marketing efforts in both traditional and new media platforms.

 


 

General and administrative expenses

 

General and administrative expenses were RMB196.3 million (US$28.2 million), an increase of 70.0% from RMB115.5 million in 2018, primarily due to the increase in our employee benefit expenses of share-based compensation and the expenses related to our initial public offering and listing.

 

Profit/(loss) for the period

 

Profit for fiscal year 2019 was RMB138.3 million (US$19.9 million), compared with a loss of RMB252.5 million in 2018. Basic earnings per share was RMB2.96 (US$0.43), compared with basic loss per share of RMB6.22 in 2018. Diluted earnings per share was RMB2.96 (US$0.43), compared with diluted loss per share of RMB6.22 in 2018.

 

Certain Non-IFRS items

 

Profit for fiscal year 2019 was RMB138.3 million (US$19.9 million), compared with a loss of RMB252.5 million in 2018.

 

EBITDA for fiscal year 2019 was RMB260.5 million (US$37.4 million), an increase of 235.3% from RMB-192.6 million in 2018.

 

Adjusted profit for fiscal year 2019 was RMB69.1 million (US$9.9 million), an increase of 19.3% from RMB57.9 million in 2018.

 

Adjusted EBITDA for fiscal year 2019 was RMB187.1 million (US$26.9 million), an increase of 65.4% from RMB113.1 million in 2018.

 

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 items

 

Cash and cash equivalents amounted to RMB154.5 million (US$22.2 million) as of December 31, 2019, compared to RMB101.9 million as of December 31, 2018, increase was primarily a result of the proceeds we received from our initial public offering, partially offset by our redemption of certain outstanding convertible note in November 2019.

 

The Company has adopted the accounting policy of IFRS 16 Leases from January 1, 2019 and has not restated comparatives for the 2018 reporting period, as permitted under the specific transitional provisions in the standard. The reclassifications and the adjustments arising from the new lease standard were therefore recognized in the opening balance on January 1, 2019. Under the new lease standard, the Company recognized RMB196.4 million (US$28.2 million) of the right-of-use assets, RMB36.3 million (US$5.2 million) of current lease liabilities and RMB165.6 million (US$23.8 million) of non-current lease liabilities as of December 31, 2019.

 

Certain cash flow items

 

Net cash generated from operating activities was RMB86.8 million (US$12.5 million) in 2019, compared to RMB4.9 million in2018.

 

Net cash used in investing activities was RMB114.2 million (US$16.4 million) in 2019, compared to RMB76.2 million in 2018.

 

Net cash generated from financing activities was RMB79.6 million (US$11.4 million) in 2019, compared to RMB66.7 million in 2018.

 


 

Liquidity and capital resources

 

We had net current liabilities of RMB0.6 million as at December 31, 2019. We expect that the outbreak of COVID-19 will have material and adverse impacts on our cash flow for the first quarter of 2020 with potential continuing impacts on subsequent periods. We have considered our cash flow from future operations and available borrowing facilities to conclude that we have sufficient financial resources to meet its financial obligations as and when they fall due in the coming 12 months. Given our current credit status and the current availability of capital, we believe that we will not encounter any major difficulties in obtaining additional bank borrowings.

 

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 RMB6.9618 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 December 31, 2019.

 

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 fair value losses/(gains) of convertible redeemable preferred shares, fair value losses/(gains) of convertible note, fair value losses/(gains) of exchangeable note liabilities, fair value losses/(gains) 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, roadshow and marketing expenses, impairment loss in respect of goodwill, loss on disposal of Wuhan Pengai and exchange loss.

 


 

Adjusted profit represents profit for the period/year, adjusted to exclude fair value losses/(gains) of convertible redeemable preferred shares, fair value losses/(gains) of convertible note, fair value losses/(gains) of exchangeable note liabilities, fair value losses/(gains) of derivative financial instrument, interest expense on convertible note, share-based compensation expense, and 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, roadshow and marketing expenses, impairment loss in respect of goodwill, loss on disposal of Wuhan Pengai and exchange loss.

 

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. We encourage you to review our financial information in its entirety and not rely on a single financial measure.

 

We present EBITDA, Adjusted EBITDA and Adjusted profit as supplemental performance measures because we believe that they facilitate operating performance comparisons from period to period and company to company by backing out potential differences caused by various items.

 

Recent Developments

 

We continue to expand our footprint. On December 30, 2019, we announced the openings of two new satellite clinics — Fenghua Pengai Aesthetic Clinic and Deqing Pengai Aesthetic Clinic where we hold the respective majority equity interest. In March 2020, we entered into definitive agreements (the “Agreements”) to acquire controlling interest in two treatment centers. Pursuant to the Agreements, we will acquire 80% equity interest in Shanghai Mingyue Aesthetic Medical Co., Ltd., a high-end aesthetic medical service provider in Shanghai, and acquire, through several tranches of payments, 70% equity interest in Xi’an New Pengai Yueji Aesthetic Medical Clinic Co., Ltd., an aesthetic medical service provider in Xi’an, Shaanxi.

 


 

We are firmly committed to our customers and community. In January 2020, we launched the Four Beauties, a new set of hyaluronic acid-based skincare products. In February 2020, we carried out a charity campaign to help combat the COVID-19. Through our treatment centers across the country, we intensified the efforts to help people in need. We organized charity fund raising activities among our employees and their family members, donated protective masks, thermometers and other medical supplies to the community, and allocated medical supplies for patients and healthcare personnel battling at the frontline.

 

Business Outlook

 

As a result of the coronavirus pandemic outbreak, we have lowered our expectations for growth in the first quarter of 2020. While the duration of the current COVID-19 and its negative impact to market demand and our business cannot be reasonably estimated at this time, we currently expect our revenue for the first quarter of 2020 to decrease year-over-year by approximately 50%, which, subject to change, reflects current and preliminary view based on best information available at the time. We will continue to monitor and evaluate the financial impacts to us.

 

Conference Call Information

 

The Company’s management will hold an earnings conference call on April 24, 2020, at 8:00 AM U.S. Eastern Time (5:00 am Pacific Time/ 8:00 pm Beijing Time). Dial-in details for the earnings conference call are as follows:

 

Conference Call

 

 

Date:

 

April 24, 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 May 1, 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 10142306.

 

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: 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 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 December

 

31 December

 

 

 

2018

 

2019

 

2019

 

 

 

RMB’000

 

RMB’000

 

US$’000

 

 

 

 

 

(Unaudited)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

Property, plant and equipment

 

235,028

 

519,323

 

74,596

 

Investment properties

 

47,168

 

15,373

 

2,208

 

Intangible assets

 

67,712

 

175,417

 

25,197

 

Investments accounted for using the equity method

 

26,244

 

10,256

 

1,473

 

Prepayments and deposits

 

5,166

 

42,298

 

6,076

 

Deferred income tax assets

 

12,254

 

19,774

 

2,840

 

 

 

393,572

 

782,441

 

112,390

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Inventories

 

21,143

 

26,120

 

3,752

 

Trade receivables

 

10,760

 

9,705

 

1,394

 

Other receivables, deposits and prepayments

 

89,480

 

71,278

 

10,238

 

Amounts due from related parties

 

55,354

 

3,101

 

445

 

Cash and cash equivalents

 

101,886

 

154,490

 

22,191

 

 

 

278,623

 

264,694

 

38,020

 

Assets held-for-sale

 

4,344

 

 

 

 

 

282,967

 

264,694

 

38,020

 

 

 

 

 

 

 

 

 

Total assets

 

676,539

 

1,047,135

 

150,410

 

 

 

 

 

 

 

 

 

EQUITY AND LIABILITIES

 

 

 

 

 

 

 

Equity attributable to owners of the Company

 

 

 

 

 

 

 

Share capital

 

265

 

469

 

67

 

Treasury shares

 

 

(41

)

(6

)

Accumulated losses

 

(373,920

)

(242,232

)

(34,794

)

Other reserves

 

95,245

 

789,285

 

113,374

 

 

 

(278,410

)

547,481

 

78,641

 

Non-controlling interests

 

29,054

 

43,117

 

6,193

 

Total (deficit)/equity

 

(249,356

)

590,598

 

84,834

 

 

 


 

AESTHETIC MEDICAL INTERNATIONAL HOLDINGS GROUP LIMITED

 

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

31 December

 

31 December 

 

31 December

 

 

 

2018

 

2019

 

2019

 

 

 

RMB’000

 

RMB’000

 

US$’000

 

 

 

 

 

(Unaudited)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

Borrowings

 

19,876

 

12,917

 

1,855

 

Lease liabilities

 

 

165,615

 

23,789

 

Convertible redeemable preferred shares

 

476,112

 

 

 

Convertible note

 

70,598

 

 

 

Exchangeable note liabilities

 

185,745

 

 

 

Derivative financial instrument

 

301

 

 

 

Deferred income tax liabilities

 

1,971

 

12,703

 

1,825

 

 

 

754,603

 

191,235

 

27,469

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Trade payables

 

14,356

 

17,017

 

2,444

 

Accruals, other payables and provisions

 

57,992

 

58,439

 

8,394

 

Amounts due to related parties

 

218

 

626

 

90

 

Contract liabilities

 

5,996

 

5,542

 

796

 

Borrowings

 

77,130

 

127,470

 

18,310

 

Lease liabilities

 

 

36,266

 

5,209

 

Current income tax liabilities

 

13,611

 

19,942

 

2,864

 

 

 

169,303

 

265,302

 

38,107

 

Liabilities held-for-sale

 

1,989

 

 

 

 

 

171,292

 

265,302

 

38,107

 

 

 

 

 

 

 

 

 

Total liabilities

 

925,895

 

456,537

 

65,576

 

 

 

 

 

 

 

 

 

Total equity and liabilities

 

676,539

 

1,047,135

 

150,410

 

 


 

AESTHETIC MEDICAL INTERNATIONAL HOLDINGS GROUP LIMITED

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

Three months ended

 

Twelve months ended

 

 

 

31 December 

 

31 December 

 

31 December 

 

31 December

 

31 December

 

31 December 

 

 

 

2018

 

2019

 

2019

 

2018

 

2019

 

2019

 

 

 

RMB’000

 

RMB’000

 

US$’000

 

RMB’000

 

RMB’000

 

US$’000

 

 

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

 

 

(Unaudited)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

213,476

 

238,084

 

34,199

 

761,306

 

869,050

 

124,831

 

Cost of sales and services rendered

 

(62,795

)

(75,859

)

(10,896

)

(258,567

)

(275,948

)

(39,637

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

150,681

 

162,225

 

23,303

 

502,739

 

593,102

 

85,194

 

Selling expenses

 

(95,574

)

(144,311

)

(20,729

)

(333,526

)

(413,068

)

(59,334

)

General and administrative expenses

 

(37,662

)

(76,642

)

(11,009

)

(115,485

)

(196,329

)

(28,201

)

Finance costs, net

 

(2,439

)

(5,646

)

(811

)

(8,922

)

(23,905

)

(3,434

)

Other gains, net

 

2,637

 

1,624

 

233

 

12,118

 

18,669

 

2,682

 

Fair value gain of convertible redeemable preferred shares

 

(226,248

)

 

 

(226,248

)

136,656

 

19,629

 

Fair value gain of convertible note

 

(9,152

)

1,568

 

225

 

(9,152

)

(5,193

)

(746

)

Fair value gain of exchangeable note liabilities

 

(56,925

)

 

 

(56,925

)

45,274

 

6,503

 

Fair value gain of derivative financial instrument

 

(301

)

 

 

(301

)

301

 

43

 

Impairment loss in respect of goodwill

 

 

(1,405

)

(202

)

 

(1,405

)

(202

)

Share of profits/(losses) of investments accounted for using the equity method

 

482

 

(307

)

(44

)

1,730

 

(1,738

)

(250

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss)/profit before income tax

 

(274,501

)

(62,894

)

(9,034

)

(233,972

)

152,364

 

21,884

 

Income tax expense

 

(6,822

)

2,295

 

330

 

(18,508

)

(14,036

)

(2,016

)

(Loss)/profit for the period/year

 

(281,323

)

(60,599

)

(8,704

)

(252,480

)

138,328

 

19,868

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Items that may be subsequently reclassified to profit or loss

 

 

 

 

 

 

 

 

 

 

 

 

 

Currency translation differences

 

298

 

831

 

119

 

1,088

 

672

 

97

 

Total other comprehensive income/(loss) for the period/year, net of tax

 

298

 

831

 

119

 

1,088

 

672

 

97

 

Total comprehensive (loss)/income for the period/year

 

(281,025

)

(59,768

)

(8,585

)

(251,392

)

139,000

 

19,965

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss)/profit attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

Owners of the Company

 

(283,230

)

(58,418

)

(8,391

)

(255,237

)

136,309

 

19,578

 

Non-controlling interests

 

1,907

 

(2,181

)

(313

)

2,757

 

2,019

 

290

 

(Loss)/profit for the period/year

 

(281,323

)

(60,599

)

(8,704

)

(252,480

)

138,328

 

19,868

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss)/earnings per share for profit attributable to owners of the company (in RMB per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

—Basic

 

(6.87

)

(0.99

)

(0.14

)

(6.22

)

2.96

 

0.43

 

—Diluted

 

(6.87

)

(0.99

)

(0.14

)

(6.22

)

(0.78

)

(0.11

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive (loss)/income attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

Owners of the Company

 

(282,754

)

(57,587

)

(8,272

)

(254,149

)

136,981

 

19,675

 

Non-controlling interests

 

1,729

 

(2,181

)

(313

)

2,757

 

2,019

 

290

 

Total comprehensive (loss)/income for the period/year

 

(281,025

)

(59,768

)

(8,585

)

(251,392

)

139,000

 

19,965

 

 


 

AESTHETIC MEDICAL INTERNATIONAL HOLDINGS GROUP LIMITED

 

RECONCILIATIONS OF IFRS AND NON-IFRS RESULTS

 

 

 

For the Three Months Ended
December 31,

 

For the Twelve Months Ended
December 31,

 

 

 

2018

 

2019

 

2019

 

2018

 

2019

 

2019

 

 

 

RMB’000

 

RMB’000

 

US$’000

 

RMB’000

 

RMB’000

 

US$’000

 

EBITDA and Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss)/profit before income tax for the period/year

 

(274,501

)

(62,894

)

(9,034

)

(233,972

)

152,364

 

21,886

 

Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

+ Finance costs

 

2,519

 

5,748

 

826

 

9,244

 

24,293

 

3,489

 

+ Amortisation and depreciation

 

7,918

 

21,985

 

3,158

 

32,140

 

83,834

 

12,042

 

EBITDA

 

(264,064

)

(35,161

)

(5,050

)

(192,588

)

260,491

 

37,417

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

+/- Fair value losses/(gains) of convertible redeemable preferred shares

 

226,248

 

 

 

226,248

 

(136,656

)

(19,629

)

+/- Fair value losses/(gains) of convertible note

 

9,152

 

(1,568

)

(225

)

9,152

 

5,193

 

746

 

+/- Fair value losses/(gains) of derivative financial instruments

 

301

 

 

 

301

 

(301

)

(43

)

+/- Fair value losses/(gains) of exchangeable note

 

56,925

 

 

 

56,925

 

(45,274

)

(6,503

)

+ Share-based compensation expense

 

 

22,664

 

3,255

 

 

47,788

 

6,864

 

+ Professional fees

 

3,208

 

7,710

 

1,107

 

8,055

 

12,064

 

1,733

 

+ IT-related expenses paid to a related party

 

1,250

 

520

 

75

 

5,000

 

3,020

 

434

 

+ Roadshow and marketing expenses

 

 

31,098

 

4,467

 

 

32,220

 

4,682

 

+ Impairment loss in respect of goodwill

 

 

1,405

 

202

 

 

1,405

 

202

 

+ Loss on disposal of Wuhan

 

 

 

 

 

2,070

 

297

 

+ Exchange loss

 

 

5,123

 

736

 

 

5,123

 

736

 

Adjusted EBITDA

 

33,020

 

31,791

 

4,567

 

113,093

 

187,143

 

26,882

 

 


 

AESTHETIC MEDICAL INTERNATIONAL HOLDINGS GROUP LIMITED

 

RECONCILIATIONS OF IFRS AND NON-IFRS RESULTS (CONTINUED)

 

 

 

For the Three Months Ended
December 31,

 

For the Twelve Months Ended
December 31

 

 

 

2018

 

2019

 

2019

 

2018

 

2019

 

2019

 

 

 

RMB’000

 

RMB’000

 

US$’000

 

RMB’000

 

RMB’000

 

US$’000

 

Adjusted Profit

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss)/profit for the period/year

 

(281,323

)

(60,599

)

(8,705

)

(252,480

)

138,328

 

19,870

 

Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

+/- Fair value losses/(gains) of convertible redeemable preferred shares

 

226,248

 

 

 

226,248

 

(136,656

)

(19,629

)

+/- Fair value losses/(gains) of convertible note

 

9,152

 

(1,568

)

(225

)

9,152

 

5,193

 

746

 

+/- Fair value losses/(gains) of derivative financial instruments

 

301

 

 

 

301

 

(301

)

(43

)

+/- Fair value losses/(gains) of exchangeable note

 

56,925

 

 

 

56,925

 

(45,274

)

(6,503

)

+ Interest expense on convertible note

 

1,183

 

661

 

95

 

4,660

 

4,144

 

595

 

+ Share-based compensation expense

 

 

22,664

 

3,255

 

 

47,788

 

6,864

 

+ Professional fees

 

3,208

 

7,710

 

1,107

 

8,055

 

12,064

 

1,733

 

+ IT-related expenses paid to a related party

 

1,250

 

520

 

75

 

5,000

 

3,020

 

434

 

+ Roadshow and marketing expenses

 

 

31,098

 

4,467

 

 

32,220

 

4,628

 

+ Impairment loss in respect of goodwill

 

 

1,405

 

202

 

 

1,405

 

202

 

+ Loss on disposal of Wuhan

 

 

 

 

 

2,070

 

297

 

+ Exchange loss

 

 

5,123

 

736

 

 

5,123

 

736

 

Adjusted Profit

 

16,944

 

7,014

 

1,007

 

57,861

 

69,124

 

9,930