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spk01: Good morning, ladies and gentlemen. Thank you for standing by, and welcome to Aesthetic Medical International third quarter 2022 earnings conference call. During today's presentation, all parties will be in listen-only mode. As a reminder, today's conference call is being recorded. On the call today from Aesthetic Medical International are Dr. Pengu Zhou, Chairman and Chief Executive Officer, Mr. Toby Wu, Chief Financial Officer, and Mr. Derek Shih, Investor Relations Associate Director. Dr. Joe will review the business operations and the company highlights, followed by Mr. Toby Wu, who will introduce the company's financial performance. They will all be available to answer your questions during the Q&A session that follows. Before we get started, I'd 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 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 loss, and adjusted EBITDA. You should not consider EBITDA, adjusted EBITDA, or adjusted loss as a substitute for or superior to net income prepared in accordance with IFRS. Furthermore, because of non-IFRS, Measures are not prepared in accordance with IFRS. They're susceptible to varying calculations and may not be comparable to other similarly titled measures presented by other companies. You're 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 Gujo, Chairman and CEO of Aesthetic Medical International. His opening remarks will be delivered in English by Investor Relations Associate Director, Mr. Derek Shi. Dr. Zhou, please go ahead.
spk05: In order to reduce the impact on people's daily life and business operations, the country has adjusted the prevention and control strategy from the original wide wind control in a certain area to now more accurately implement specific area of control and shorten the control period. Even so, the company is still affected by the wind control measures in the third quarter. Thank you everyone for joining the call today. The third quarter of 2022 was still clouded by the
spk19: the uncertainties arising from the resurgence of COVID-19 pandemic. To mitigate the impact on people's daily living and business operations, the country has adjusted its strategy of prevention and control measures from a broad coverage of a region to a more precise implementation of specific areas with shortened lockdown periods. Yet Shenzhen was placed under lockdown and three of the group's treatment centers were forced to close temporarily in September, which affected our customer traffic. As a result, revenue of this quarter slightly decreased by 0.3% year-over-year.
spk05: We are working hard to improve business efficiency. In terms of marketing, we have already started to cooperate with opinion leaders and expand their live broadcast business. The joint activities of opinion leaders successfully and effectively expanded the company's goal of self-improvement and aesthetic consumption to the young generation with strong needs. From financial data,
spk19: During the period, the company has strived to enhance its operating efficiency by adjusting marketing strategies and streamlining business operations. In terms of marketing, we have started collaborating with key opinion leaders and tapped into live streaming e-commerce. This was successful and effective in expanding target audience to younger generation who had strong demand in self-care and aesthetic-related consumption. This is reflected by a 27.8% year-on-year decrease in selling expenses during the third quarter. 在运营方面,我们进一步强化了在二季度推出的集训计划。
spk05: In addition to the most comprehensive standardized operation process for employee training, we also further help them understand the trend and trend of the latest medical-medicine market and upstream products to ensure that all employees provide first-class services for our customers. In order to better evaluate the quality of service, we also invited a mysterious visitor this year to visit all the branches and provide We believe that the project will be completed by the end of this year. In terms of operation, we have further strengthened our training program, which was launched in the second quarter. Besides offering them with the latest standardized operating procedures, we have further equipped them with the latest
spk19: aesthetic medical market trends, and product offerings, ensuring the best-in-class services are provided to our customers. We have also engaged mid-three shoppers in this quarter to better evaluate the service quality, of which they will discreetly visit each treatment center and provide assessment on user experience for management review. As of today, 25 mid-three shoppers' assessments and feedback have been received. During the time being, we have also begun the renovation of the first floor of one of our flagship hospitals, Shenzhen Penghai Aesthetic Medical Hospital, which is expected to be completed by the end of this year. We believe that these measures will provide customers with a better service experience, laying a strong foundation to support our business scalability and sustainable growth in the long run.
spk05: The company is determined to become a professional and trustworthy light medical service provider. We still carefully conduct regular assessments of each clinic and isolate low-income institutions. In the past three seasons, we have isolated Changsha Peng'an Medical Medical Hospital and Langchang Peng'an Xiuqi Medical Medical Hospital, and we expect to get a good result
spk19: The company is committed to becoming a professional and reliable non-surgical aesthetic medical service provider. We remain prudent to conduct regular assessment on treatment centers and divest non-performing centers. During this quarter, we divested the Changsha Peng'ai Aesthetic Medical Hospital and Nanchang Peng'ai Xiuqi Aesthetic Medical Hospital. and expect to receive cash inflows of 4.6 million RMB and 3.0 million RMB from Changsha Penglai and Nanchang Penglai, respectively. 我们相信通过上述策略可以进一步增强我们的核心竞争力,提高品牌价值,并最终推动盈利能力。 We believe with the aforementioned strategies, we can further enhance our core competencies, improve brand equity, and eventually drive profitability.
spk05: 再次感谢大家的关注和支持。 现在我把电话交给我们的首席财务官Toby, 让他介绍2022年第三季度的财务和运营情况。 谢谢。
spk19: Thank you again for all your support and attention. And I would like now to turn the call to our CFO, Toby Wu, to introduce the financials and operations for the third quarter of 2022. Toby, please go ahead.
spk06: Okay. Thank you, Dr. Zhou, and thank you, Director.
spk03: Hi, everyone. I will summarize some of our key unaudited financial results and operation results for the third quarter ended September 13, 2022. In the third quarter of 2022, total revenue decreased 0.3% year-on-year to RMB 167 million, primarily attributable to the diversification of unperforming assess in the 2021. And the first three, 2022, temporary closure of several treatment center due to the pandemic policy requirement in the third quarter of 2022. Cost property was RMB 186.6 million, representing an increase of 22.5% year-on-year. Gross profit margin was increased 9.6% to 51.8%. The increase was attributable to the implementation of strict cost control of an assistive medical consumable, as well as the value-added service provided by the group's professional doctor to enhance the service quality of non-surgical assistive medical business. Selling expenses was RMB 61.5 million, representing 36.8% of the company's total revenue in the third quarter of 2022. Selling expenses of revenue decreased by 14 percentage points year-on-year. The reduction in the selling expenses and its contribution was mainly as a result of the company's strategy shifts of marketing focused on lower-cost online marketing channels, such as private domain, customer, and social media planning training, as to raising customer acquisition costs under the impact of the COVID-19 pandemic. General and admin expenses were RMB 45.5 million, representing a decrease of 12.6 mean 12.6% primarily due to the divestment of underperforming asset in the 2021 and the first three quarter of 2022. As a result of the foregoing, the company recorded a loss of RMB 15.4 million for the third quarter of 2022, compared with a loss of RMB 13.3 million in the third quarter of 2021. Basic and diluted north per share was both north of RMB 0.6 in the third quarter of 2020, compared with a basic and diluted north per share of RMB 0.22 in the third quarter of 2021. EBITDA for the third quarter of 2022 was a loss of RMB 38.1 million. compared with a loss of RMB 43.1 million in the third quarter of 2021. Adjusted EBITDA for the third quarter of 2022 was RMB 10.6 million, rebound from a loss of RMB 13 million in the third quarter of 2021. Adjusted loss after test for the third quarter of 2020 narrowed to RMB 3.7 million, compared with a loss of RMB 17.2 million in the third quarter of 2021. In terms of operating performance, as a result of temporary business suspension of several treatment centers in the third quarter of 2022, the company recorded a decrease of 13.5% year-on-year in the total active customers. The company recorded an increase in the number of treatment cases of 4.7% year-on-year, and the number of treatment cases in the return treatment center increased by 37% year-on-year. The increase was primarily derived by the increasing demand of non-surgical assisted medical treatment around the young generation as well as the effectiveness of a company's newly introduced package promotion. Total number of non-surgical assistive medical treatments as a percentage of a total number of assistive treatments increased by 5.8 percentage points. Average spending per customer increased by 15.2%. from RMB 2,529 in the quarter of 2021 to RMB 2,915 in the third quarter of 2022, primarily driven by the sales of high-end viral-diminishing bitums. As of September 13, 2022, cash and cash equivalent was RMB 20.4 Looking ahead, we will continue to implement our first mentioned strategy. We will dedicate to provide better and quality service to our customers and delivering sustainable long-term growth. This concludes our prepared remarks. Thank you for joining us today's call. We will now open the call to the questions. Operator, please go ahead.
spk01: Thank you. We will now begin our question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. At this time, we'll pause momentarily to assemble our roster.
spk06: Again, if you have a question, that's star then one.
spk01: Our first question comes from Jasper Wong from Saugatree Capital. Please go ahead.
spk13: Hi, I'm Jasper's colleague. Just wanted to thank you, management, for their sharing. I actually have two questions. My first question is about customers. So we noticed that the number of customers have decreased. what were the reasons for the decrease and is there any strategy to acquire new customers and to retain existing customers? Thank you.
spk19: Hi, Jasper. This is Derek. And thank you for your question. Yes, we have seen that the number of customers have been decreasing in comparison with the quarter in 2021. The main reason of the decreasing is that we have invested some agencies in 2021 and also in the first three quarters in 2022. And the other reason is that we tend to allocate more resources in our treatment center in Greater Bay Area. So we have allocated more cash in training the employees instead of spending in advertising. And the strategies that we are trying to retain our customers is that we will introduce SOP training to our employees and then inculcate core values to them. And the last is to do the renovation for one of our flagship hospitals. so that we could provide better customer experience to retain those customers. Thank you.
spk09: Thank you. Am I still with you guys?
spk06: Again, if you have a question, please press star, then 1. No further questions. Let me turn the call over to Mr. Derek Shih for closing remarks.
spk19: Thank you, operator. On behalf of our entire management team, I would like to thank everyone again for joining us today. If you have any questions, please contact us through email at irfpengai.com.cn. or reach our IR Council, DLK Advisory at irfdlkadvisory.com. We appreciate your interest and support in Aesthetic Medical International and look forward to speaking with you again next time. And I have one more advertisement for our company that we provide one-stop aesthetic medical treatment with genuine equipment and consumables. So welcome all the investors and analysts to visit our hospital all over China and hope you have a great experience here. And thank you. Operator, please go ahead.
spk01: Pardon me. I was just advised we do have a follow-up question from Jasper Wong. Jasper, your line is now open.
spk13: Perfect. Thank you. Sorry about that. I actually... I have one more following question. So we all noticed that the COVID situation remains uncertain and there's lockdowns and that could potentially affect the company's business. So we just want to know, is there any measures in place to alleviate the risk?
spk11: Thank you.
spk19: Okay. Thank you, Jesper. Yes, we noticed that the attitude of government is to limit the spread of COVID-19. So firstly, we will actually coordinate with government pandemic prevention measures. For example, we will set a front desk to guide the customers, scan the site code, and measure their body temperature to prevent the customer affected by COVID. And then we will take advantage of our online marketing while our face-to-face consultation is impacted. For example, we will use a video call between our doctors and customers. And lastly, we will provide improving expansion during this period so we won't have many loss-making agencies in comparison to the previous time.
spk18: Thank you.
spk10: Thank you. Am I still with you guys?
spk17: Yes, we can hear you.
spk13: Thank you. Actually, one last question, please. We saw the Chinese government actually has introduced quite a lot of policies on how aesthetic medical industry should operate and advertise. So what's the company's view on these regulations and how will they affect our business operation? Thank you.
spk19: Thank you, Jasper. Yes, the good thing is that we know the bottom line of the government and how they will regulate our industry. And we know their attitude and we will have the target to conduct our business in a healthy and long-term way. And as you know, the AIH was founded by Dr. Zhou. And so we have been at the forefront of industry in terms of compliance. So we are confident that we will be impacted much will have much smaller impact than our competitors.
spk18: And that's it. Thank you.
spk13: Thank you, management. That will be my last question, too. Thank you.
spk06: Again, if you have a question, please press star, then 1.
spk01: Our next question comes from Eva from Lumiere Capital. Please go ahead. Hello.
spk07: Hi, management. Thanks for the presentation. And we just learned from that you guys have a plan to further dispose the centers in Shenzhen. But I mean, Shenzhen is our core area. And why should we make such a decision for the two potential centers? to be divested. We want to know, apart from these, do we have other targets to further dispose of other assets? Thanks.
spk19: Hello, Eva. Thank you for your question. Yes, we have disclosed that we are planning to devise one of our clinics in Shenzhen. And we think the main reason is that that clinic is located in Fujian District, where It is frequently affected by COVID-19 lockdown. And we are unable to waive the rental from our private landlord. So in consideration of the cash flow and the healthy development of our financial aspect, we decide to divest it in the next few months. We do not have further disposal plans. And that's it. Thank you.
spk07: Okay. Thank you. Just one question. So how many clinics and hospitals do we have as of today?
spk19: Thank you. We have 10 clinics and hospitals in total as of today.
spk08: All right. Thank you so much. Thanks.
spk06: Again, if you have a question, please press star, then 1. Again, that's star, then 1. All right.
spk01: Seeing there are no further questions, let me turn the call back once again to Mr. Derek Shee to repeat his closing remarks.
spk19: Okay. Thank you, operator. Thank you, everyone, for joining the call today. And thank you, Jasper and Eva, for your helpful questions. And I think that's it for today's call. And operator, please go ahead.
spk01: Thank you, everyone, for attending Aesthetic Medical International's third quarter of 2022 earnings conference call. This concludes our call today. We thank you all for listening.
spk06: Goodbye. That sucked. Thank you. Thank you. you Thank you. Thank you. Thank you.
spk01: Good morning, ladies and gentlemen. Thank you for standing by, and welcome to Aesthetic Medical International third quarter 2022 earnings conference call. During today's presentation, all parties will be in listen-only mode. As a reminder, today's conference call is being recorded. On the call today from Aesthetic Medical International are Dr. Pengu Zhou, Chairman and Chief Executive Officer, Mr. Toby Wu, Chief Financial Officer, and Mr. Derek Shih, Investor Relations Associate Director. Dr. Joe will review the business operations and the company highlights, followed by Mr. Toby Wu, who will introduce the company's financial performance. They will all be available to answer your questions during the Q&A session that follows. Before we get started, I'd 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 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 loss, and adjusted EBITDA. You should not consider EBITDA, adjusted EBITDA, or adjusted loss as a substitute for or superior to net income prepared in accordance with IFRS. Furthermore, because of non-IFRS, Measures are not prepared in accordance with IFRS. They're susceptible to varying calculations and may not be comparable to other similarly titled measures presented by other companies. You're encouraged to review the company's financial information in its entirety and not rely on a single financial measure. At this time, I'd like to turn the call over to Dr. Peng Gujo, Chairman and CEO of Aesthetic Medical International. His opening remarks will be delivered in English by Investor Relations Associate Director, Mr. Derek Shi. Dr. Zhou, please go ahead.
spk05: In order to reduce the impact on people's daily life and business operations, the country has adjusted the prevention and control strategy from the original wide control of a certain area to now more accurately implement specific area of control and shorten the control cycle. Even so, the company is still affected by the control measures in the third quarter. Thank you everyone for joining the call today. The third quarter of 2022 was still clouded by the
spk19: the uncertainties arising from the resurgence of COVID-19 pandemic. To mitigate the impact on people's daily living and business operations, the country has adjusted its strategy of prevention and control measures from a broad coverage of a region to a more precise implementation of specific areas with shortened lockdown periods. Yet Shenzhen was placed under lockdown and three of the group's treatment centers were forced to close temporarily in September, which affected our customer traffic. As a result, revenue of this quarter slightly decreased by 0.3% year-over-year. 在三季度内,集团继续调整营销策略和精简的业务运作。
spk05: From financial data point of view,
spk19: During the period, the company has strived to enhance its operating efficiency by adjusting marketing strategies and streamlining business operations. In terms of marketing, we have started collaborating with key opinion leaders and tapped into live streaming e-commerce. This was successful and effective in expanding target audience to younger generation who had strong demand in self-care and aesthetic-related consumption. This is reflected by a 27.8% year-on-year decrease in selling expenses during the third quarter. 在运营方面,我们进一步强化了在二季度推出的集训计划 。
spk05: In addition to the most comprehensive standardized operation process for employee training, we also further help them understand the trend and trend of the latest medical-medicine market and upstream products to ensure that all employees provide first-class services for our customers. In order to better evaluate the quality of service, we also invited mysterious visitors this year to visit all the clinics and provide We believe that the project will be completed by the end of this year.
spk19: In terms of operation, we have further strengthened our training program, which was launched in the second quarter. Besides offering them with the latest standardized operating procedures, we have further equipped them with the latest aesthetic medical market trends, and product offerings, ensuring the best-in-class services are provided to our customers. We have also engaged mid-three shoppers in this quarter to better evaluate the service quality, of which they will discreetly visit each treatment center and provide assessment on user experience for management review. As of today, 25 mid-three shoppers' assessments and feedback have been received. During the time being, we have also begun the renovation of the first floor of one of our flagship hospitals, Shenzhen Penghai Aesthetic Medical Hospital, which is expected to be completed by the end of this year. We believe that these measures will provide customers with a better service experience, laying a strong foundation to support our business scalability and sustainable growth in the long run.
spk05: The company is determined to become a professional and trustworthy medical service provider. We still carefully conduct regular assessments of each clinic and isolate low-income institutions. In the past three seasons, we have isolated Changsha Peng'an Medical Medical Hospital and Langchang Peng'an Xiuqi Medical Medical Hospital, and we expect to get a good result
spk19: The company is committed to becoming a professional and reliable non-surgical aesthetic medical service provider. We remain prudent to conduct regular assessment on treatment centers and divest non-performing centers. During this quarter, we divested the Changsha Peng'ai Aesthetic Medical Hospital and Nanchang Peng'ai Xiuqi Aesthetic Medical Hospital. and expect to receive cash inflows of 4.6 million RMB and 3.0 million RMB from Changsha Penglai and Nanchang Penglai, respectively. 我们相信通过上述策略可以进一步增强我们的核心竞争力,提高品牌价值,并最终推动盈利能力。 We believe with the aforementioned strategies, we can further enhance our core competencies, improve brand equity, and eventually drive profitability.
spk05: 再次感谢大家的关注和支持。 现在我把电话交给我们的首席财务官Toby, 让他介绍2022年第三季度的财务和运营情况。 谢谢。
spk19: Thank you again for all your support and attention. And I would like now to turn the call to our CFO, Toby Wu, to introduce the financials and operations for the third quarter of 2022. Toby, please go ahead.
spk06: Okay. Thank you, Dr. Zhou, and thank you, Director.
spk03: Hi, everyone. I will summarize some of our key unaudited financial results and operation results for the third quarter ended September 13, 2022. In the third quarter of 2022, total revenue decreased 0.3% year-on-year to RMB 167 million, primarily attributable to the diversification of unperforming assets in 2021, and the first three in 2022, the temporary closure of several treatment centers due to the pandemic-related requirements in the third quarter of 2022. The gross profit was RMB 186.6 million, representing an increase of 22.5% year-on-year. Gross profit margin was increased 9.6% to 51.8%. The increase was attributable to the implementation of strict cost control of an assistive medical consumable, as well as the value-added service provided by the group's professional doctor to enhance the service quality of non-surgical assistive medical business. Selling expenses was RMB 61.5 million, representing 36.8% of the company's total revenue in the third quarter of 2022. Selling expenses of revenue decreased by 14% each year-on-year. The reduction in the selling expenses and its contribution was mainly as a result of the company's strategy shifts of marketing focused on lower cost online marketing channels, such as private domain, customer, and social media planning training, as to raising customer acquisition costs under the impact of COVID-19 pandemic. General and admin expenses were RMB 45.5 million, representing a decrease of 12.6 mean a 12.6% primary due to the divestment of an underperforming asset in 2021 and the first three quarters of 2022. As a result of the foregoing, the company recorded a loss of RMB 15.4 million for the third quarter of 2022, compared with a loss of RMB 13.3 million in the third quarter of 2021. Basic and diluted loss per share was both loss of RMB 0.6 in the third quarter of 2020 compared with a basic and diluted loss per share of RMB 0.22 in the third quarter of 2021. EBITDA for the third quarter of 2022 was a loss of RMB 38.1 million. compared with a loss of RMB 43.1 million in the third quarter of 2021. Adjusted EBITDA for the third quarter of 2022 was RMB 10.6 million rebound from a loss of RMB 13 million in the third quarter of 2021. Adjusted loss after test for the third quarter of 2020 narrowed to RMB 3.7 million, compared with a loss of RMB 17.2 million in the third quarter of 2021. In terms of operating performance, as a result of temporary business suspension of several treatment centers in the third quarter of 2022, the company recorded a decrease of 13.5% year-on-year in the total active customers The company recorded an increase in the number of treatment cases of 4.7% year-on-year. And the number of treatment cases in the return treatment center increased by 37% year-on-year. The increase was primarily derived by the increasing demand of non-surgical assisted medical treatment around the young generation as well as the effectiveness of a company's newly introduced package promotion. Total number of non-surgical assistive medical treatments as a percentage of total number of assistive treatments increased by 5.8 percentage points. Average spending per customer increased by 15.2%. from RMB 2,529 in the third quarter of 2021 to RMB 2,915 in the third quarter of 2022. Timing rate dropped by the sales of high-end viral intimidating victims. As of September 13, 2022, cash and cash equivalent was RMB 20.4 Looking ahead, we will continue to implement our first mentioned strategy. We will dedicate to provide better and quality service to our customers and delivering sustainable long-term growth. This concludes our prepared remarks. Thank you for joining us today's call. We will now open the call to the questions. Operator, please go ahead.
spk01: Thank you. We will now begin our question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. At this time, we'll pause momentarily to assemble our roster.
spk06: Again, if you have a question, that's star, then one.
spk01: Our first question comes from Jasper Wong from Saga Tree Capital. Please go ahead.
spk13: Hi, I'm Jasper's colleague. Just wanted to thank you, management, for their sharing. I actually have two questions. My first question is about customers. So we noticed that the number of customers have decreased. what were the reasons for the decrease and is there any strategy to acquire new customers and to retain existing customers? Thank you.
spk19: Hi, Jasper. This is Derek. And thank you for your question. Yes, we have seen that the number of customers have been decreasing in comparison with the quarter in 2021. The main reason of the decreasing is that we have invested some agencies in 2021 and also in the first three quarters in 2022. And the other reason is that we tend to allocate more resources in our treatment center in Greater Bay Area. So we have allocated more cash in training the employees instead of spending in advertising. And the strategies that we are trying to retain our customers is that we will introduce SOP training to our employees and then inculcate core values to them. And the last is to do the renovation for one of our flagship hospitals. so that we could provide better customer experience to retain those customers. Thank you.
spk09: Thank you. Am I still with you guys?
spk06: Again, if you have a question, please press star, then 1. No further questions. Let me turn the call over to Mr. Derek Shih for closing remarks.
spk19: Thank you, operator. On behalf of our entire management team, I would like to thank everyone again for joining us today. If you have any questions, please contact us through email at irfpengai.com.cn. or reach our IR Council, DLK Advisory at irfdlkadvisory.com. We appreciate your interest and support in Aesthetic Medical International and look forward to speaking with you again next time. And I have one more advertisement for our company that we provide one-stop aesthetic medical treatment with genuine equipment and consumables. So welcome all the investors and analysts to visit our hospital all over China and hope you have a great experience here. And thank you. Operator, please go ahead.
spk01: Pardon me. I was just advised we do have a follow-up question from Jasper Wong. Jasper, your line is now open.
spk13: Perfect. Thank you. Sorry about that. I actually... I have one more follow-up question. So we all noticed that the COVID situation remains uncertain and there's lockdowns and that could potentially affect the company's business. So we just want to know, is there any measures in place to alleviate the risk?
spk11: Thank you.
spk19: Okay. Thank you, Jesper. Yes, we noticed that the attitude of government is to limit the spread of COVID-19. So firstly, we will actively coordinate with government pandemic prevention measures. For example, we will set a front desk to guide the customer, scan the site code, and measure their body temperature to prevent the customer affected by COVID. And then we will take advantage of our online marketing while our face-to-face consultation is impacted. For example, we will use a video call between our doctors and customers. And lastly, we will provide improved expansion during this period so we won't have many loss-making agencies in comparison to the previous time.
spk18: Thank you.
spk10: Thank you. Am I still with you guys?
spk17: Yes, we can hear you.
spk13: Thank you. Actually, one last question, please. We saw the Chinese government actually has introduced quite a lot of policies on how aesthetic medical industry should operate and advertise. So what's the company's view on these regulations and how will they affect our business operation? Thank you.
spk19: Thank you, Jasper. Yes, the good thing is that we know the bottom line of the government and how they will regulate our industry. And we know their attitude and we will have the target to conduct our business in a healthy and long-term way. And as you know, the AIH was funded by Dr. Zhou. And so we have been at the forefront of industry in terms of compliance. So we are confident that we will be impacted much will have much smaller impact than our competitors.
spk18: And that's it. Thank you.
spk13: Thank you, management. That will be my last question, too. Thank you.
spk06: Again, if you have a question, please press star, then 1.
spk01: Our next question comes from Eva from Lumiere Capital. Please go ahead. Hello.
spk07: Hi, management. Thanks for the presentation. And we just learned from that you guys have a plan to, you know, further dispose the centers in Shenzhen. But, I mean, Shenzhen is our core area, and why should we make such a decision for the two potential centers? to be divested. We want to know, apart from these, do we have other targets to further dispose other assets? Thanks.
spk19: Hello, Eva. Thank you for your question. Yes, we have disclosed that we are planning to devise one of our clinics in Shenzhen. And we think the main reason is that that clinic is located in Fujian District, where It is frequently affected by COVID-19 lockdown. And we are unable to waive the rental from our private landlord. So in consideration of the cash flow and the healthy development of our financial aspect, we decide to divest it in the next few months. We do not have further disposal plans. And that's it. Thank you.
spk07: Okay. Thank you. Just one question. So how many clinics and hospitals do we have as of today?
spk19: Thank you. We have 10 clinics and hospitals in total as of today.
spk08: All right. Thank you so much. Thanks.
spk06: Again, if you have a question, please press star, then 1. Again, that's star, then 1. All right.
spk01: Seeing there are no further questions, let me turn the call back once again to Mr. Derek Shih to repeat his closing remarks. Okay. Thank you, operator.
spk19: Thank you, everyone, for joining the call today. And thank you, Jasper and Eva, for your helpful questions. And I think that's it for today's call. And operator, please go ahead.
spk01: Thank you, everyone, for attending Aesthetic Medical International's third quarter of 2022 earnings conference call. This concludes our call today. We thank you all for listening. Goodbye.
Disclaimer