Aesthetic Medical International Holdings Group Ltd.

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Aesthetic Medical International 4Q and Fiscal Year 2020 Unaudited Financial Results Conference Call. During today's presentation, all parties will be in a listen-only mode. This conference has been recorded today, Tuesday, April 20th, 2021. Joining us today from Aesthetic Medical International are the company's chairman and CEO, Dr. Peng Wu Zhou, and company's IRD, Mr. Chun-Wei Wang, and company's chief financial officer, Mr. Guanghua Wu. Before we get started, I would like to remind you that some of the information discussed will include forward-looking statements. regarding future events and our future financial performance. These include statements about our future expectations, financial projections, and our plans and prospects. Actual results may differ materially from those set forth in such statements. For discussion of these risks and uncertainties, you should review the company's filings with the SEC, which includes today's press release. You should not rely on our forward-looking statements as prediction of future events. Our forward-looking statements that we make on this call are based on assumptions and beliefs as of today, and we undertake no obligation to update them except as required by applicable law. Our discussion today will include non-IFRS financial measures, including a visa requirement adjusted profit, and adjusted EBITA. You should not consider EBITA or adjusted EBITA 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 single financial measures. At this time, I would like to turn the call over to Mr. Feng-Wei Zhou, Chairman and CEO of Aesthetic Medical International. His opening remarks will be delivered in English by IRD Mr. Chung Yik Wong. Mr. Zhou, please go ahead.

Thank you, host. Thank you all for attending EMEI International's 4th quarter of 2020 and the entire year's financial performance. First of all, I would like to summarize the company's response to the COVID-19 pandemic in 2020, and the performance of the company in 2020. Then, our investor relations director, Mr. Jiang, will give a more detailed interpretation and explanation of our financial statements, the operating situation of the company, Thank you, Officer, and everyone for joining Athletic Electrical International's fourth quarter at fiscal year 2020 and on the earning call today.

I will begin my remarks by providing an overview of the company's response to the COVID-19 outbreak during the fiscal year 2020, followed by a summary of the company's fiscal year 2020 performance. Then, Mr. Janik Wong, our RRD, will review our financial results and operation performance in more detail, and he will elaborate a few other items related to our outlooks and the approaches that we are taking to implement our core initiatives in the next fiscal year.

Although the COVID-19 pandemic has been effectively controlled in China, we are still implementing strict and thorough COVID-19 prevention and control measures, including a limited period of time to disinfect the company facilities, We take strict protective measures to protect our first-tier employees and customers, delay the lunch time of employees, monitor the body temperature of employees and customers, and record the employees and their personal travel history and health status.

Despite the fact that COVID-19 is under effective control in China at the current stage, we are implementing a COVID-19 prevention scheme and measures, including and not limited to regularly sterilizing and ventilating companies' facilities, taking strict protective measures to protect our frontline employees and customers, segregating employees' lunchtime, monitoring the body temperature of our employees and customers, and keeping records of the travel history and help of our employees and their immediate family members.

In 2020, we actively take preventive measures. On the basis of ensuring customer and employee safety, we insist on high-standard medical technology, strong medical teams, and high-quality services

In 2020, we actively took initiative to contain the COVID-19 pandemic and carry out aesthetic medical service on the transmission of ensuring the safety of our customers and employees. We insist on meeting our customers' aesthetic medical needs with high standard medical technologies, strong medical teams, and high quality service, and building trust with our customers.

In 2021, we will continue to promote the development of the medical industry, expand our medical team, focus on medical technology research to meet We will continue to expand the needs of the customer community. Safety and beauty are always our end goal. This end goal will continue to lead us in the forward direction of the medical industry. With years of experience in the industry, we will continue to play a natural advantage in the field of plastic surgery. We will seize the opportunity to clean the medical field. using technology and services as the core, implementing products and services to optimize and upgrade. The COVID-19 pandemic is still uncertain, but we are confident and will do our best to overcome the difficulties. We will continue to serve and provide excellent services to our customers, and will also bring long-term value to our shareholders and investors.

In 2021, we will continue to promote the development of the aesthetic medical service, strengthen our medical team, and focus on the research and development of the aesthetic medical technology to meet the different needs of an expanding customer base. Safety and beauty has always been our purpose, and this purpose will continue to lead us in the right direction of the aesthetic medical industry. We will continue to leverage the advantage of traditional plastic surgery with our accumulating industry experience for many years. Seize the huge opportunities of aesthetic medical education and realize the optimization and upgrade of products and service with technology and service at the core. There are still uncertainties about the COVID-19 pandemic, but we have confidence and we will do our best to overcome difficulties. We will continue to provide customers with high-quality service, as well as bring long-term value to our shareholders and investors.

The following are the results of our 2020 financial year. Our revenue increased from RMB 8.691 billion in 2019 to RMB 9.016 billion in 2020. The contract amounted to US$1.382 billion, with an increase of about 3.7%.

Turning back quickly to our fiscal year 2020 on audit results, our total revenue increased by 3.7% to RMB 901.6 million, approximately equal to USD 138.2 million in 2020 from RMB 869.1 million in 2019.

Thank you for your attention and support. Next, Our investor relations director, Mr. Jiang, on behalf of the management team, will report on our fourth quarter and the year-round operations and financial performance, as well as future plans. Please, Mr. Jiang.

Thank you again for all your support and attention. Next, I will turn the call over to Mr. Tony Vuong, our IRD, who will review our operational results and financial results for the fourth quarter and fiscal year end, December 31st, 2020, as well as our business outlook on behalf of the management team. Mr. Sun, please go ahead. So thank you, Dr. Zhou, and good morning, everyone. Next, on behalf of the management team, I will summarize some of the key financial results and operation results for fourth quarter 2020 and fiscal year end December 31st, 2020. So let me begin with the fourth quarter 2020. In fourth quarter 2020, our total revenue increased by 52.3% to RMB 362.6 million, which is about $55.6 million, excluding the impact from the consolidation of Guangdong-Hanxi investment management co-limit results. the company entered into agreement to purchase a 51% equity interest of Guangdong Hanfei Investment Management on the July 14, 2020, but subsequently entered into an agreement to dispose of the 51% of the equity interest of Hanfei on December 25th of the same year. The disposal was mainly due to slower than expectation recovery of COVID-19 and the overall less than satisfactory performance of Hansei during the post acquisition period. As the companies obtained controls over Hansei from August 4th, 2020 to December 25th, 2020. The company consolidate the result of Hanfei during the period for purpose of comparatively in the analysis of the unordered financial result law. The information provided below exclude the impact of the consolidation of Hanfei's result. So the total revenue would have increased by 3.1% to RMB 245.6 million or USD 37.6 million in fourth quarter 2020. Primarily due to an increased demand for service with higher price partially offset by a decrease in the total number of customers during the period. The gross profit was RMB 235 million representing an increase of 44.9% from RMB 162.2 million in the fourth quarter of 2019. The gross profit margin was 64.8% representing a decrease of 3.3% 68.1% in the fourth quarter of 2019. Excluding the impact from the consolidation of hundreds without, the gross profit would have been RMB 150.1 million, representing a decrease of 7.4% from the fourth quarter of 2019. And the gross profit margin we're having 61.1%, representing a decrease of 7%. The gross profit of non-surgical aesthetic medical service was RMB 118.2 million, representing an increase of 23.4% from RMB 95.8 million to the fourth quarter. of 2019. The gloss proper margin was 64.3% representing a decrease from 66.7 in the 12th quarter of 2019. Excluding the impact of the consolidation of sun phase result, gloss proper of non-surgical aesthetic medical service would have been IMB 84.1 million representing a decrease of 12.2% from the fourth quarter of 2019. And the gross profit margin, we're having 61.5%, representing a decrease of 5.2%. So the gross profit of mineral invasive aesthetic treatment was RMB 62.7 million, representing an increase of 36.3% from RMB 46 million in the fourth quarter of 2019. The gross profit margin was 65.8%, representing a 66.8% decrease in the fourth quarter of 2019, excluding the impact of the consolidation of Hanfei's results. The gross profit of minimal invasive aesthetic treatments we have seen are the 39.1 million, representing a decrease of 15%. And the gross profit margin we have in 61.4%, representing a decrease of 5.4% decrease compared to the fourth quarter of 2019. The gross profit of energy-based treatment was RMB 55.5 million, which is about USD 8.5 million, representing an increase of 11.4% from RMB 49.8 million in the fourth quarter of 2019. The gross profit margin was 62.7%, representing a decrease from 66.5% in the fourth quarter of 2019, excluding the impact from consolidation of Hanfei. As a result, gross profit of energy-based treatment will have been RMB 44.9 million which is a 9.8% increase, and the gross profit margin we're having 61.5%, which is a 5% decrease from the fourth quarter of 2019. The gross profit of surgical athletic treatment was on the 107.9%. We're presenting an increase of 78.3% from RMB 60.5 billion in the fourth quarter of 2019. The gross profit margin was 66.7%, which is a decrease from 74.8% compared to the fourth quarter of 2019. Excluding the impact from the consolidation of Hanse's results, The gross profit of surgical aesthetic treatment service would have been R&D 58 million, which is a 4.1% decrease compared to the fourth quarter of 2019. And the gross profit margin is a 12.4% decrease. And gross profit, Of the general healthcare service and other athletic treatment service with RMB 8.9 million, representing an increase of 58.8% from RMB 5.9 million in the fourth quarter of 2019. The gross profit margin was 52%, which representing an equal increase from 43.7%. compared to the previous year, excluding the impact from the consolidation of hundreds results, the gross profit margin of general healthcare service and other aesthetic medical treatment would have seen RMB 8.1 million, representing an increase of 37.3% compared to the fourth quarter of 2019. And the gross profit margin would have been 51.3%, which is a 7.6% increase compared to the previous year. Selling expenses with RMB 200 million, 200.1 million, which is about 30.7 million U.S. dollars. representing a 55.2% of the company's total revenue of the same period compared to the selling expenses of RMB 1.43 million in the fourth quarter of 2019, which represent 60.6 of the company's total revenue of the same period. Selling expenses increase on a year-over-year basis Because of the one-off impact from Hanfei, excluding the impact from Hanfei, the selling expenses in the fourth quarter will have decreased by 10.5%, a 10.5%. From RMB 129.2 million in the fourth quarter of 2020, from RMB 144.3 million in the same period of 2019. primarily due to the reduced price and level in marketing expenses in relation to the COVID-19 outbreak. So the general and administrative expenses was R&D 61.8 million, representing a decrease of 19.3%. 19.3% decrease. Excluding the impact from Hansei, the number decreased by 30% in the fourth quarter of 2020 from R&D 76.6 million in the same period of 2019, which is primarily due to a decrease in employee benefit expenses. We recognize impairment of non-current asset of RMB 33 million in the fourth quarter 2020, representing a significant increase from RMB 1.4 million in the fourth quarter 2019. During the fourth quarter of 2020, the company decided to strategically focus on the treatment center in East Asia and South Asia. in East China and South China, and the Southwest China regions, and devote much less resources to treatment centers in other regions in China. We performed asset impairment assessment and recognized impairment of Goodwill's trade name and properties, plans, equipment with respect to certain treatment centers in other regions of China. As a result of, as a result for the foregoing, the company's record a loss for the fourth quarter of 2020 of RMB 81.7 million, which is about 12.5 million US dollar. compared to a loss of RMB 60.6 million in the fourth quarter of 2019. Hanfei's contributes forwards of RMB 4.3 million, which is about 0.7 million during the fourth quarter and the loss on disposal of Hanfei was 0.8 million RMB. Basic loss per share was RMB 1.18, which is about a 0.18 US dollar, compared with basic loss per share of RMB 0.99 in the fourth quarter of 2019. Diluted loss per share was RMB 1.18, compared with diluted loss per share of RMB 0.99 in the fourth quarter of 2019. The EBITDA for the fourth quarter of 2020 was a loss for RMB 25.9 million, representing a decrease of 26.4% from a loss of RMB 35.2 million in the fourth quarter of 2019. Adjusted profit for the fourth quarter of 2020 was a loss of RMB 28.5 million, representing a decrease of 507% from the profit of RMB 7 million in the fourth quarter of 2019. Adjusted EBITDA for the fourth quarter of 2020 was RMB 27.3 million, representing a decrease of 14.2% from a profit of RMB 31 million in the fourth quarter of 2019. Now, I will talk about the fiscal year 2020 unaudited financial results. For the fiscal year 2020, our total revenue increased by 3.7%, so RMB 901.6 million, which is about 138.2 million US dollar. Excluding the impact from the consolidation of Hanfei's result, the total revenue will have decreased by 17.1%. to RMB $720.2 million, which is about $110.4 million in U.S. dollars in 2020, primarily due to the impact of the COVID-19 pandemic that caused the temporary shutdown of the treatment centers all over China. A close part of it was RMB 554.8 million, representing a decrease of 8.1%. The gross profit margin was 60.4%, representing a decrease of 7.8%. Excluding the impact on the consolidation of Hanfei, the gross profit would have been IB 416.3 million gross margin, which has been 57.8%, representing a decrease of 10.4% compared to 2019, primarily due to our enhanced promotion effort in response to the COVID-19 pandemic that needs to decrease revenue to treatment. The gross profit of non-surgical aesthetic treatment service was R&B 269 million, which is a decrease of 23.2% from R&B 350.3 million in 2019. The gross profit margin was 59.4%, representing a decrease from 71.5% in 2019, excluding the impact from the Hanfei. Gross profit of non-surgical aesthetic medical service would have been 220.6 million, representing a decrease of 33% compared to the previous year. And the gross profit margin would have been 7.5%, representing a decrease of 14%. Growth over of minimal invasive treatment was RMB 145.8 million, which is a decrease of 5.8% compared to the previous year. Growth over margin was 62.1%. representing a decrease from 69% in 2019. Excluding the impact from the consolidation of Hanfei's result, the gross forward of minimal invasive athletic treatment would have been 1.2 million RMB, representing a decrease of 28.2% from the 2019, and gross profit margin would have been 59.5%, representing a decrease of 9.5% from 2019. The gross profit of energy-based treatment was RMB 1 to 3.2 million, representing a decrease of 37%. compared to the previous year. Gross profit margin was 56.5%, representing a decrease from 73.7% in 2019. Excluding the impact from Hanfei, the gross profit of energy-based treatments would have been RMB 109.4 million, representing a decrease of 44% compared to the previous year. And the gross profit margin would have the 55.6%, which is a 18.1% decrease. Gross profit margin of medical service was RMB 253.1 million, which is an increase of 19.9%. And the gross profit margin was 63%, representing a decrease from 66.1% in 2019, excluding the impact from the consolidation of Hanfei's result, gross profit of surgical aesthetic medical service would have been RMB 174.7 million, representing a decrease of 17.2% from the previous year. And the gross profit larger will have been 59.9%, which is a 6.2% decrease. The gross profit of general healthcare service and other medical service was R&D 22.7 million, representing a decrease of 28.4 million R&D in the same period of 2019. Gross profit margin was 48%, representing a decrease from 52.6% in the same period of 2019. And excluding the impact from Hanfei, The general healthcare service would have been RMB 21.2 million, which is a 33.1% decrease from the 2019. And the gross profit margin would have been 47.3%, which is a 5.3% decrease. Seller expenses was RMB 5.1. 510.6 million RMB representing 56.6% of the company's total revenue compared to the selling expenses of RMB 413.1 million in 2019, which represents 47.5% of the company's total revenue of 2019. Selling expenses increased by a 23.6%, primarily due to a one-off contribution of RMB 110.3 million from Hanfei. Excluding the impact from Hanfei, selling expenses in 2020 will have been decreased by 3.1%, and which is due to a decrease Employees' benefit expenses as a result decreased in sales caused by COVID-19 pandemic and our decreased spending during the Double 11 season, which is a Chinese shopping season in the 2020s. General and administrative expenses was RMB 230.6 million, representing an increase of 17.5% from RMB 196.3 million in 2019, excluding the impact from Hanfei. General and administrative expenses in 2020 would have increased by 10.9%. due to an increase in the vesting of options under ESOP's plan. We recognize impairment of non-current asset of RMB 33 million in 2020, representing an increase of RMB 30.6 million from RMB 1.4 million in 2019. During the fourth quarter of 2020, the companies decided to strategically focus on treatment centers in East China, South China, and Southwest China, regions that devote much less resources to treatment centers than other regions of China. We performed asset impairment assessment and recognized impairment of goodwill trade names and property plans and equipment with respect to certain treatment centers in other regions of China. As a result of foregoing, the companies record a loss of RMB 246.9 million for 2020 compared to a profit of 138.3 million in 2019. Hanfei contributed profit of RMB 40 million during the post acquisition period and a lot of disposal time frame was RMB 0.8 million. Basic loss to share was RMB 3.61, which is about $0.55 US dollar, compared with basic earnings share of RMB 2.96 2019. The diluted loss per share was R&D 3.61 compared to diluted loss per share of R&D 0.78 in 2019. The EBITDA for 2020 was a loss of R&D 1 to 3.9 million, representing a decrease of 147.6 from a profit of IMB 260.5 million in 2019. Adjusted profit for fiscal year of 2020 was a loss of IMB 111 million representing a decrease of 260.6 from a profit of 60 from IMB 69.1 million in the same period of 2019. Adjusted EBITDA for Our fiscal year 2020 was RMB 12 million, representing a decrease of 93.6% from a profit of RMB 187.1 million in the same period of 2019. Now I will talk about operational results, repeat results. customers defined as active customers who had previously received at least one procedure from the company account for 62.9% of the company's active customer base in fourth quarter of 2020 without considering the one-off impact from Hanfei. Without considering the one-off impact from Hanfei, the company conducted a total of including 25,194 surgical treatments and 146,435 known surgical treatments in the fourth quarter of 2020, representing an increase of 9.9% and 5.4% percent and an increase of 3.8 percent respectively from 176,062 to the treatment and 23,910 surgical treatments and 141,000 and 81 non-surgical tumors in the fourth quarter of 2019. Repeated customers account for about 64.5% of the company's active customers based in 2020 without considering the one-off impact from Hanfei. Without considering the impact from Hanfei, the company conducted a total 55721A treatments including 92922 surgical treatments and 413235 non-surgical treatments in 2020. Representing an increase of 3.9% and 2.5% and increase of 2.2% respectively from 53646 nine total treatments uh nine zero six five eight surgical treatments and 404 316 non-surgical treatments in the same period of 2019. now for a quick uh summary of our balance sheet and cash flows uh as of uh december 20th uh december 31st 2020 We had cash and cash equivalents of 44.4 million, which is about 6.8 million U.S. dollar, compared to 154.5 million as of December 31st previous year. Net cash used in operating activities was 2.8 million in 2020. compared to net cash generated from operating activities of RMB 86.8 million in 2019. The net cash used in investing activity was RMB 127.4 million. The net cash generated from financing activity was RMB 17.7 million. And for the other developments of our company, on the 14th of July 2020, the company entered into a share purchase agreement to acquire 51% equity interest of Hansei with its original shareholder. On December 25th of the same year, the company entered into an agreement to dispose of the 51% equity interest of Hanfei with the seller. The disposal mainly due to the slower than expected recovery of COVID-19 and the overall less satisfactory performance of the Hanfei during the post-acquisition period. On December 13, 2020, the company announced that its board of directors has approved a share repurchase program with the companies authorized to repurchase in the open market up to $6 million worth of its ADF from time to time until October 12, 2020. Depending on general markets condition, trade price and other factors as well as subject to the ethical laws and company's securities trading policy. As of the date of this release, 45,000 ADS were repurchased with a total consideration of profit relief about $0.3 million. In October 2020, the company entered into agreement to acquire 95% of the total equities of Beijing, Aomei, Yixing Investment and Consultancy Limits, which is Beijing Aomei, for a consideration of RMB 11, The transaction was completed in January 2021, and Beijing Aomei has become a subsidiary of the company. On February 9th, 2021, the company and Forbes China has jointly released the Chinese Aesthetic Treatment Industry White Paper 2020, which is the first white paper on aesthetic treatment industry in China. For the business outlook, as China gradually recover from the aftermath of COVID-19 outbreak, the company's experience recovery in the business operation While the duration of COVID-19 pandemic and its negative impact to the market demand of the company's business operation 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 first quarter of 2021. Such expectation reflects the current and preliminary views of the company's management team based on the information available at the time and may be subject to change. The company will continue to monitor and evaluate the development of the pandemic and resulting financial impact on the company. Now I would like to talk about the liquidity and capital resources. The company has net current liability of RMB 96 million as of the December 31st, 2020. and which includes current borrowings of IMB 136 million and operating loss of 247 million and net operating cash outflow of IMB 0.8 million for the year. Then from the year end, December 31st, 2020. During the year end, the company, completed four acquisitions, which has a result in potential cash flow of approximately RMB 5 million for the remaining acquisition consideration in the next 12 months after the date of this release during the first quarter of 2020. The outbreak of COVID-19, the company temporarily shut down its athletic treatment center This caused material and adverse impact on its revenue and cash flow for the first half of 2020, with potential continuing impact on the subsequent period after considering the gradual recovery of the business during the post-COVID-19 outbreak. It's expected cash flow from future operations sticking to consideration costs expensive management funds from the bank borrowing and other sources of financing. The company concludes that it's sufficient financial resources to meet its financial obligations as when they fall due and continue its operation in the next 12 months, subjects to any uncertainty of the development of COVID-19. At last, I would like to add some color regarding our company's strategy in the year of 2021. We plan to stay focused on integrating the aesthetic medical industry chain. During the past few years, the aesthetic medical industry has been evolving from niche to mass market consumption with higher consumption demands more standardized and diversified products and services and higher level of brand recognition. To adapt to this market trend, we strive to become an aesthetic medical company with more competitive medical capacity. the ability to provide a full circle service, and more importantly, well-recognized friends and large business scale. To that end, we need to quickly increase our business scale to improve our competitive strength, our market share, and accordingly, our profitability. Our strategy is crystal clear. It's to make good use of our of our funding capacity to consolidate good targets with attractive valuation. Now, I would like to turn the discussion over to the operator, Kate, for any questions. Kate?

We will now begin the question and answer session. To ask a question, you may press star, then run, on your touch-tone phone. If you're using a speaker phone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. Our first question today is from Carolyn Yang, a private investor. Go ahead.

Thank you for taking my question. I have three related questions. The first one is, was this year's performance largely influenced by COVID-19? How do you assess the impact of the pandemic? Thank you.

Okay. Yes. Actually, this year's performance is largely influenced by COVID-19 because some of our treatment centers and hospitals shut down for the first couple months of the year, so we simply cannot do any treatment. And so that is the reason that we record a loss. We've done very good in the previous year, which is 2019, and we

uh actually look forward uh to 2021. yeah thank you for the question okay thank you and uh my second question is uh whether the overall operations this year will be adjusted in the future thank you um yes the uh

The strategy, as I just reported and shared, the general strategy we will say remains the same, but we will adjust some of our strategies. For example, we are now more focusing on the eastern part and southern part of China instead of doing M&A and expanding business all over China. So we are more focused now. Thank you for the question.

Okay, thank you. And my last question is with COVID-19 improving, what's your expectation of this year? Is the performance of 2021 worth looking forward to?

Yeah, thank you for the question. Yeah. We actually are very optimistic about 2021. I don't have the exact number with me right now, but we are expecting a increase of revenue and a number of treatments and a number of customers, basically everything based on the result of 2019 instead of 2020. You know, 2020 was a very special year. So we are expecting a good year this year. Thank you.

Okay, thank you.

Our next question, our next question is from Tammy Wong from Sense Green Capital. Go ahead.

Hi there. I have like three questions. And the first one, let's begin with the operation side. Does the number of non-surgical customers shows any like upward trend? I mean, my nail was expected annual grace rate. This is the first one.

Yes. Yes. Thank you. Thank you. Let me answer the first question first. Yes, we, We actually do see an upward trend for the non-surgical customers because the industry is more acceptable and popular among the younger customers. So the teenagers and the young adults are more acceptable to this treatment. We actually see a trend in both surgical and non-surgical treatment in our company. But yeah, we do see a trend. And the expected growth rate annually, I think it's about 25% or even more.

Okay, cool. The second question is, Yeah, we can see that the repurchase rate of the company is relatively high, mainly from which kind of projects? May I know that?

Yeah, yeah, of course. The repurchase rate mainly comes from the laser treatment and the minimal invasive treatments. And because the laser treatment and the minimally invasive treatment, you can do it on a monthly or maybe quarterly basis. So we do see a very good rate on these reprocess rate on these treatments.

Okay. And the last question is, will the company continue to increase the investment in the non-surgical medical projects in the coming year to 2021?

Yes. We are actually planning to increase more investment in this part of the game because we do see a trend of the younger customers who are more likely and who are more friendly to these non-surgical medical treatments. So, I mean, nobody likes surgeries. Nobody likes doctors cutting off your skin and doing surgeries. These non-surgical treatments are more and more popular in Asia, basically.

I see. Okay, thank you. That's all questions.

Yep, thank you.

Again, if you have a question, please press star, then one. Seeing no further questions, let me turn the call back over to Mr. Chung Ying Wang for closing remarks.

Thank you, Kate. On behalf of our entire management team, I would like to thank everyone again for joining us today for our conference call. If you have any questions, please contact us through email at ir.chungai.com.cn. or reach our IR Council, Accent Investor Relations, at tinaxiao.accentir.com. Management will respond to your question as soon as possible. We appreciate your interest and support in Athletic Medical International and look forward to speaking with you again next time. Kate, please go ahead.

Thank you, everyone. Attending Aesthetic Medical International Fourth Quarter and Fiscal Year 2020 Unaudited Earnings Conference Call. This concludes our call today, and we thank you for listening. Goodbye.