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spk02: Good morning, ladies and gentlemen. Thanks for standing by and welcome to Aesthetic Medical International first quarter 2021 earnings conference call. During today's presentation, all parties will be in a listen-only mode. As a reminder, today's conference call is being recorded. On the call today from Aesthetic Medical International are Dr. Peng Wu-Zhou, Chairman and Chief Executive Officer, and Mr. Toby Wu, Chief Financial Officer. Dr. Joe will review the business operations and the company highlights, followed by Mr. Wu, who will discuss financials performance. There will be a Q&A session that follows. Before we get started, I'd like to remind you that some of the information discussed will include forward business 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 findings with the SEC, which includes today's press release. You should not rely on our forward-looking statements as predictions of future events. All 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 EBITDA, adjusted profit, and adjusted EBITDA. You should not consider EBITDA, adjusted EBITDA, and adjusted profit as a substitute for or superior to net income prepared in accordance with IFRS. Furthermore, because non-IFRS measures are not determined In accordance with IFRS, they are susceptible to varying calculations and may not be comparable to other similarly titled measures presented by other companies. You are encouraged to review the company's financial information in its entirety and not rely on a single financial measure. At this time, I would like to turn the call over to Dr. Peng Wu Zhou, Chairman and CEO of Aesthetic Medical International. Dr. Zhou, please go ahead.
spk04: Thank you, host. Thank you, everyone, for attending today's meeting. We have just announced that our company's strong financial and financial performance in the first quarter of 2021 will increase by 131.4% in terms of revenue, and will recover from the economic downturn in China since the COVID-19 pandemic. Thank you, operator, and everyone for joining the call today.
spk05: We are pleased to announce that we recorded a strong financial and operating result in the first quarter of 2021, with revenue increased 131.4% year-on-year. thanks to the economic recovery of China from the COVID-19 pandemic and our dedicated team members who seized every opportunity to help us weather the storm.
spk04: There are about 26 different-scale medical hospitals in Beijing, Shanghai, Shenzhen, and other cities. We hope to provide services to customers of all ages and with different beauty standards, and serve the people who love beauty for the rest of their lives. With our professional and comprehensive services, every customer can achieve their desired
spk05: In a bid to culture people's strong pursuit of beauty, we are committed to integrating the aesthetic medical industry. With the overall multi-continuous expand and government policy to support standardization, we will further radiate our non-surgical aesthetic medical services across different regions in China. Recently, we plan to accelerate the establishment of satellite and community hospitals in the southern and eastern China regions to meet the local demand for non-aesthetic medical services and to provide more standardized services to clients. As of the first quarter of 2021, we own about 26 aesthetic medical clinics across regions including Beijing, Shanghai, and Shenzhen. We hope our services can be inclusive to anyone at any age with any beauty preferences. With our professional and comprehensive services, everyone can achieve the ideal form they desire. 2021年5月,我們與拉方佳化股份有限公司簽訂股份認購協議。拉方佳化為一家從事個人副理產品生產 In May 2021, we have entered into a definitive share subscription agreement with LaFont China Company Limited. In May, LaFont is a company engaged in production and sells personal tier products. The private placement is subject to cosmetic closing conditions and expected to close within four months from the execution of the agreement. We intend to utilize the proceeds from this private placement to fund our business development and working capital. I believe this will benefit our future growth and will cherish the abundant resources provided by this opportunity and further upgrade our products and services.
spk04: Due to the good financial and business performance of the first quarter of 2021, plus the impact of the Chinese economic situation and social activities from the COVID-19 pandemic, we believe that the demand for medical services by the market will continue to grow. Although the world is still shrouded in the shadow of the pandemic, Going forward.
spk05: In light of the promising financial and operating results in the first quarter of 2021 and the recovery of China's economic condition and people's social interaction from the impact of COVID-19, we believe that the demand of the aesthetic medical services will continue to increase. Although the world is still shrouded under hate brought by the pandemic, we preach to strive our best and continue providing more more quality services to our customers and garner fruitful returns to our shareholders. Thank you again for all your support and attention. And I would like to turn the call to our CFO, Toby Wu, to discuss the first quarter financials. Toby, please go ahead.
spk07: Okay. Thank you, Dr. Zhou, and hello, everyone. I will summarize some of the key financial results and operating results for the first quarter ended March 31st, 2021. In the Q1 of 2021, our total revenue growth 131.3% to RMB 210.5 million or USD 32.1 million. Similarly, due to an increase of 98.2% of our number of achievements results from raising customer demands as China gradually recovers from the aftermath of the COVID-19 pandemic. Revenue from non-surgical assistive medical services in the first quarter was RMB 109 million or USD 16.6 million, increased by 128.5% year-on-year from RMB 47.7 million in the first quarter of 2020. Revenue from minerally invasive assistive treatments was RMB 51.8 million or USD 7.9 million, representing an increase of 98.5% from RMB 26.1 million in the first quarter of 2020. Revenue from energy basis treatment was RMB 157.2 million or USD 8.7 million, representing an increase of 164.8% from RMB 21.6 million in the first quarter of 2020. Revenue from surgical assistive medical service was RMB 86.8 million or USD 13.2 million, representing an increase of 118.1% from RMB 39.8 million in the first quarter of 2020. Revenue from general healthcare service and other assisted medical service was RMB 14.7 million or USD 2.2 million, representing an increase of 320% from RMB 3.5 million in the first quarter of 2020. Cost property was RMB 122.1 million or USD 18.6 million, representing an increase of 249.9% from RMB 134.9 million in the first quarter of 2020, primarily as a result of a significant growth in the revenue. Gross profit margin was 158.0%, representing an increase of 19.7% from 138.3% in the first quarter of 2020, as a portion of the cost of sales are fixed costs, which remained relatively stable during the first quarter of 2021. Together with an increase of 39.1% year-over-year in the selling price of surgical-accessible medical service for the first quarter of 2021. Cost of sales and service remained great at a slower rate than our revenue in the first quarter of 2021. Cost profit of a non-surgical-accessible medical service was RMB 151.1 million or USD 7.8 million, representing an increase of $198.8 from RMB 17.1 million in the first quarter of 2020. Gross profit margin was 46.9% compared with a 35.8% in the first quarter of 2020. Gross profit of a minerally invasive assistive treatment was RMB 13.1 million or USD 4.6 million, representing an increase of $117.6 from RMB 10.9 million in the first quarter of 2020. Ghost profit margin was 58.1% compared with 41.8% in the first quarter of 2020. Ghost profit of energy basis treatment was RMB 21 million or USD 3.2 million representing an increase of 238.7% from 6.2 million in the first quarter of 2020. Gross profit margin was 36.7% compared with 28.7% in the first quarter of 2020. Gross profit of surgical assisted medical service was RMB 61.4 million or USD 9.4 million. representing an increase of 246.9% from RMB 17.7 million in the first quarter of 2020. Cost-profit margin was 17.7% compared with 14.5% in the first quarter of 2020. Cost-profit of general health care service and other assistive medical services raised significantly from RMB 0.1 million in the first quarter of 2020 to RMB 9.6 million or USD 1.5 million in the first quarter of 2021. Cost profit margin was 65.3% compared with 2.9% in the first quarter of 2020. RMB 94.4 million or 14.3 million, representing 44.6% of the company's total revenue at the same period, compared to the selling expenses of RMB 178.1 million in the first quarter of 2020, which representing 85.8% of the company's total revenue of the same period. Selling expenses increased on the year-over-year basis. PMIR because of the company launched more marketing initiatives after the graduate regime operation in the first quarter of 2021. Consistently with PMIR's marketing strategy, the company enhanced the marketing effort before the Chinese New Year and incurred higher advertising and expenses in March 2021. Adjust customer and boost sales. G&A expenses was RMB 42.1 million or USD 6.4 million representing a decrease of 17.3% from 15.9 million in the first quarter of 2020. Primarily due to decrease of RMB 10.5 million in the share-based compensation expenses compared with the share-based compensation expenses of RMB 21.6 million in the first quarter of 2020. As a result of foregoing, the company recorded a loss for the first quarter of 2021 of RMB 20.3 million, or USD 3.1 million, compared with a loss RMB $83.1 million in the first quarter of 2020. Basic loss per share was RMB $0.28 or USD $0.04, compared with a base loss of RMB $1.22 in the first quarter of 2020. Diluted loss per share was RMB $0.28 or USD $0.04. compared with diluted loss per share of RMB 1.22 in the first quarter of 2020. For the first quarter of 2021 was RMB 8.2 million or USD 1.2 million, compared with a loss of RMB 17.6 million in the first quarter of 2020. Adjusted loss for the first quarter of 2021 was RMB 8 million. or USD 1.2 million, compared with adjusted North RMB 158.2 million in the first quarter of 2020. Adjusted EBITDA for the first quarter of 2021 was a profit of RMB 20.5 million or USD 3.1 million, compared with a loss of RMB 45.7 million in the first quarter of 2020. Operational results. In terms of operating performance, repeat customers defined as active customers who have previously received at least one procedure from the company accounted for 61.8% of the company's active customers based in the first quarter of 2021. Number of treatments, the company conducted a total of 132,676 treatments including 22,828 surgical treatments and 109,815 non-surgical treatments in the first quarter of 2021, representing an increase of 98.2%, 15.7%, and 109.6%. From 16,946 total treatments 14,541 surgical treatments and 52,405 non-surgical treatments in the first quarter of 2020. As of March 31, 2021, we have RMB $15.5 million and USD $2.5 million in cash compared with RMB $44.4 million as of December 31, 2020. Looking ahead, we will continue to execute our strategy throughout the year. This is not only to provide better and quality service to our customers, but provide substantial growth to our shareholders. This concludes our prepared remarks. Thank you for joining us on today's call. We will now open the call to questions. Operator, please go ahead.
spk02: Thank you. As a reminder, to ask a question, you need to press power 1 on your telephone. To withdraw your question, please press the power button. Please stand by while we compile the Q&A roster. Once again, please press power 1 for your questions. for your questions on your telephone keypad, please press star 1 and wait for your name to be announced. Once again, please press star 1 for your questions. Thank you. Our first question comes from the line of Lisa Lee. Your line is open. Please go ahead.
spk03: Hi, dear management. Thank you so much for the presentation today. I actually have two questions here. First question would be, previously you have mentioned that we are actually developing those satellite clinics to facilitate a venture and also the expansion of our network in China. And do you have a plan or target for the number of satellite clinics that are going to establish in this year? That's the first question. And my second question is about our collaboration with LaFont. I saw that because LaFont, shall we consider LaFont as a passive financial investor or shall we consider LaFont as a strategic investor? Are we going to have any strategic collaborations or a strategic plan to co-develop any business with LaFont in the future? Thank you very much.
spk07: Okay, thank you, Ms. Ni. Thank you for your question. For the Satellite Clinic, actually we are planning to set up, we will be around, the first stage we will build up those clinics in the Shenzhen city. So in the Shenzhen and also in the Guangzhou or nearby somewhere the cities. So the number of Satellite Clinic set up for this year, we're planning to set up 10 to 20 clinics. This is our plan. But for the future, we will build up about 100 clinics for three to five years. So we'll be around Shanghai and Shenzhen, Guangzhou, this area to set up those centralized clinics. So this is the first question. For the second, the collaboration with LaFont, We define LaFont as a strategic investor for us because we still want, as I mentioned that we will set up more than 100 clinics, other satellite clinics in China. So what they are selling, not only the energy-based treatment in selling in this clinic, also we want to have some medical products for the skin or for the for some after treatment for the recovery of those treatments. So we are still negotiating with LaFont on those areas.
spk03: Thank you. Can I also add one more question? So what would be the K-PACs or the expected K-PACs for each of those satellite clinics? Or do you have a total number of K-PACs that we are going to invest in this year?
spk02: Go ahead. Hello?
spk03: Sorry, shall I repeat my question?
spk02: Please go ahead. Go ahead with the question.
spk07: I'm sorry, I missed me. My phone just disconnected just now. So for the CAPTAC, for each clinic, we plan to invest about $2 million to $3 million of RMB for each of the clinics. So for this year, we're planning to have about $60 million to invest on those clinics.
spk03: Okay, I see. Thank you very much. Thanks a lot.
spk07: You're welcome.
spk02: Thank you. Once again, for those who wish to ask a question, please press Taiwan on your telephone.
spk01: Once again, please press Taiwan on your telephone keypad.
spk02: Once again, please press power 1 on your telephones and wait for your name to be announced. If you have questions, please press the power 1 on your telephones. Yes, we have a question from the line of Tom Zhang. Your line is open. Please go ahead.
spk06: Thank you, management, for your presentation. Could you please provide some guidance on the Q2 performance? And also appreciate if you could provide some color on both the top line and margin trend in the coming quarter. Thank you.
spk07: Okay, Mr. Tao, thank you for your question. So as you know that now we are talking about the Q1 results, so I cannot give you the specific numbers of Q2 results. Also, you know that I have one week to go to finish for the Q2. What I can say is like that, at the top line, we can say that we will have at least double-digit growth compared with Q1. And also if we compare to the Q2 at the same period of 2020, there will be a huge number. So normally I just want to go back to 2019. If I have a Q2 on Q2 compared with 2019, I still believe that we can have a double digit in terms of a percentage on the growth of sales. veterinary, because the sales growth, the gross profit margin will be, I think, will be slightly better than Q1 as well. So also, we actually, I believe, on that, so in the Q2, we may can make king profit for that. So this is what I believe, the result of Q2.
spk06: Thank you. You're welcome.
spk02: Thank you. Once again, please press star 1 on your telephones and wait for your name to be announced.
spk01: If you have questions, please press star 1 and wait for your name to be announced.
spk02: As there are no further questions, I'd like to hand the conference back to Mr. Toby Wu. Please go ahead.
spk07: Thank you. Thank you, operator. 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.tungi.com.cim or reach our IR Consult DLK Advisory at irdlkadvisory.com. We appreciate your interest and support in Aesthetic Medical International and look forward to speaking with you again next time. Operator, please go ahead.
spk02: Thanks, everyone, again for attending Aesthetic Medical International's first quarter 2021 unaudited training conference call. This concludes our call today, and we thank you all for listening in. Goodbye.
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