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spk07: Good morning, ladies and gentlemen. Thank you for standing by and welcome to the Aesthetic Medical International first quarter 2023 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 Mr. Toby Wu, Chief Financial Officer, and Mr. Derek Shee, Investor Relations Associate Director. Mr. Derek Shee will review 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 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 predictions of future events. All forward-looking statements that we make during the call will be 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, adjusted loss as a substitute or superior to net income performance or net income prepared in accordance with IFRS. Furthermore, because non-IFRS measures are not prepared 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'd like to turn the call over to Mr. Derek Shih, Investor Relations Associate Director of Aesthetic Medical International. Mr. Derek Shih, please go ahead.
spk03: Thank you, operator, and everyone for joining the call today. We are excited to share our first quarter 2023 earnings and operational highlights with our stakeholders. In the first month, a majority of our treatment centers were temporarily closed due to the widespread infection of COVID-19. resulting in a total revenue of RMB 148.9 million, representing a decrease of 7.3% from 160.7 million RMB in the first quarter of 2022. However, we were able to recover and achieve a net profit of RMB 182,000, rebounded from a loss of RMB 2.5 million in the first quarter of As of the date of this report, we successfully divested two underperforming treatment centers. This was part of our ongoing strategy to optimize our portfolio and ensure sustainable growth. As a result of our divestment efforts, SG&A, which means selling general and administration as a percentage of revenue decreased by 7.4 percentage points compared to the previous year. This is a positive indication that our strategy is working and that we are on track to achieving our goals. In April 2023, Shenzhen Hongsheng Hospital initiated the renovation of its Department of Energy-Based Equipment and the exterior facade. This redevelopment is aimed at providing a modern and refreshed look to the building. The renovation project was launched after the successful renovation of Shenzhen Penghai, another flagship hospital, and it is expected to be completed by June. In May 2023, the share purchase agreement is closed in July 2022, is expected to be closed. This agreement was entered into by and among the company, Australia Wanda International Company Limited, CIFAR Global Holdings Limited, Jubilee SEP Investment Limited, Dr. Zhou Peng Wu, and Ms. Ding Wen Ting. Upon the closing of the agreement, Peak Asia Investment Holdings Limited has undertaken to convert its convertible nodes outstanding principal amount of USD 5 million as well as interest into the company's ordinary shares at the price of RMB 4.203 per share, which will further strengthen our financial position. To protect our customers and employees from the second wave of COVID-19 and influenza A, we strengthened our medical management personnel, implemented new safety protocols, and adapted to the new working conditions to ensure that our customers continue to receive safe and stable services. As the economy begins to recover, we believe that the consumers will be more willing to invest in self-care and personal appearance as their financial situations improve. With this in mind, we are optimistic about the future of the aesthetic medical industry and our performances in 2023. 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 first quarter of 2023. Toby, please go ahead.
spk05: Thank you, Derek. Hello, everyone. I will summarize some of the key and audit the financial results and cooperation results for the first quarter of 2023. ended March 13. In the first quarter of 2023, total revenue decreased by 7.3% year-on-year to RMB 148.9 million, primarily attributable to the divestment of underperforming assets in 2022 as well as the temporary closing of a treatment center in January 2023. Profit was RMB 72.6 million, representing a decrease of 18.4% year-on-year. Gross profit margin decreased 6.6% to 48.8%. The decrease was attributable to the temporary close of a treatment center in January 2023. Selling expenses were RMB 42.4 million, representing 28.5% of the company's total revenue in the first quarter of 2023. Selling expenses of revenue decreased by 4.4% from year-on-year. The reduction in the selling expenses and revenue Its contribution was mainly a result of the company's strategy reduction on the online advertising budget, as well as the divestment of underperforming assets in 2022. General and mean expenses was RMB 24.7 million, representing a decrease of 21.6%. The general and admin expenses of the revenue decreased by 3% year-on-year, primarily due to the divestment of an underperforming asset in 2022. As a result of foregoing, the company recorded a profit of RMB 0.2 million for the first quarter of 2023. Rebound from a loss of RMB 2.6 million in the first quarter of 2022. Basic and diluted loss per share were both earnings of RMB 0.04 in the first quarter of 2023, compared with the basic and diluted loss per share of RMB 0.05 in the first quarter of 2022. EBITDA for the first quarter of was a profit of RMB 19.9 million compared with RMB 20 million in the first quarter of 2022. Adjusted EBITDA for the quarter of 2023 was RMB 23.7 million compared with RMB 26.9 million in the first quarter of 2022. Adjusted profit after test for the first quarter of 2023 was RMB 4 million, compared with RMB 4.3 million in the first quarter of 2022. In terms of operating performance, as a result of a diversification of treatment centers, the company recorded a decrease of 8.7% year-on-year in the total active customers. The total number of non-surgical Assisted medical treatment as a percentage of the total number of assisted treatment decreased by 8.4 percentage points. Average spending per customer increased by 1.4% from RMB 2,967 in the first quarter of 2022 to RMB 3,009 in the first quarter of 2023. primarily driven by the strategic decision to remove most of the lower-priced treatment promotions from our service offering. Looking ahead, we will continue to implement a force management strategy. We are dedicated to providing better and quality service to our customers and diversifying sustainable long-term growth. This concludes our preparation remarks. Thank you for joining us on today's call. We will now open the call to questions. Operator, please go ahead.
spk07: Yes, thank you. If you wish to ask a question, please press star then one in your telephone and wait for your name to be announced. If you wish to cancel your request, please press star then two. If you are on a speakerphone, please pick up the handset to ask your question.
spk02: And once again, please press star then 1 if you would like to ask a question.
spk01: All right.
spk02: As there are no questions right now, I would like to return the floor to Mr. Derek Shih for any closing comments.
spk03: Okay. 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 ir.pengai.com.cn. We appreciate your interest in supporting Aesthetic Medical International I look forward to speaking with you again next time. Operator, please go ahead.
spk07: Thank you, everyone, again for attending Aesthetic Medical International's first quarter of 2023 earnings conference call. This concludes the call today, and we thank you for listening in.
spk01: Goodbye. Thank you. So, Thank you. Music. Thank you.
spk07: Good morning, ladies and gentlemen. Thank you for standing by and welcome to the Aesthetic Medical International first quarter 2023 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 Mr. Toby Wu, Chief Financial Officer and and Mr. Derek Shih, Investor Relations Associate Director. Mr. Derek Shih will review 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 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 predictions of future events. All forward-looking statements that we make during the call will be 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, adjusted loss as a substitute or superior to net income performance or net income prepared in accordance with IFRS. Furthermore, because non-IFRS measures are not prepared 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'd like to turn the call over to Mr. Derek Shih, Investor Relations Associate Director of Aesthetic Medical International. Mr. Derek Shih, please go ahead.
spk03: Thank you, operator, and everyone for joining the call today. We are excited to share our first quarter 2023 earnings and operational highlights with our stakeholders. In the first month, A majority of our treatment centers were temporarily closed due to the widespread infection of COVID-19, resulting in a total revenue of RMB 148.9 million, representing a decrease of 7.3% from 160.7 million RMB in the first quarter of 2022. However, we were able to recover and achieve a net profit of RMB 182,000 rebounded from a loss of RMB 2.5 million in the first quarter of 2022. As of the date of this report, we successfully divested two underperforming treatment centers. This was part of our ongoing strategy to optimize our portfolio and ensure sustainable growth. As a result of our divestment efforts, SG&A which means selling general and administration expense as a percentage of revenue decreased by 7.4 percentage points compared to the previous year. This is a positive indication that our strategy is working and that we are on track to achieving our goals. In April 2023, Shenzhen Hongcheng Hospital initiated the renovation of its department of energy-based equipment and the exterior packet. This redevelopment is aimed at providing a modern and refreshed look to the building. The renovation project was launched after the successful renovation of Shenzhen Penghai, another flagship hospital, and it is expected to be completed by June. In May 2023, the share purchase agreement is closed in July 2022 is expected to be closed. This agreement was entered into by and among the company Australia Wanda International Company Limited, CIFAR Global Holdings Limited, Jubilee SEP Investment Limited, Dr. Zhou Pengwu, and Ms. Ding Wenting. Upon the closing of the agreement, Peak Asia Investment Holdings Limited has undertaken to convert its convertible notes outstanding principal amount of USD 5 million as well as interest into the company's ordinary shares at the price of RMB 4.203 per share, which will further strengthen our financial position to protect our customers and employees from the second wave of COVID-19 and influenza A. We strengthened our medical management personnel, implemented new safety protocols, and adapted to the new working conditions to ensure that our customers continue to receive safe and stable services. As the economy begins to recover, we believe that the consumers will be more willing to invest in self-care and personal appearance as their financial situations improve. With this in mind, We are optimistic about the future of the aesthetic medical industry and our performances in 2023. 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 first quarter of 2023. Toby, please go ahead.
spk05: Thank you, Derek. Hello, everyone. I will summarize some of the key unaudited financial results and cooperation results for the first quarter of 2023, ended March 13th. In the first quarter of 2023, total revenue decreased by 7.3% year-on-year to RMB 148.9 million, primarily attributable to the divestment of underperforming assets in 2022 as well as the temporary closing of a treatment center in January 2023. Cost profit was RMB 72.6 million representing a decrease of 18.4% year-on-year. Cost profit margin decreased 6.6% to 48.8%. The decrease was attributable to the temporary close of a treatment center in January 2023. Selling expenses were RMB 42.4 million, representing 28.5% of the company's total revenue in the first quarter of 2023. Selling expenses as of revenue decreased by 4.4% year-on-year. The reduction in the selling expenses and Its contribution was mainly a result of the company's strategy reduction on the online advertising budget, as well as the divestment of underperforming assets in 2022. General and admin expenses was RMB $24.7 million, representing a decrease of 21.6%. The general and admin expenses of the revenue decreased by 3% year-on-year, primarily due to the divestment of underperforming assets in 2022. As a result of foregoing, the company recorded a profit of RMB 0.2 million for the first quarter of 2023. Rebound from a loss of RMB 2.6 million in the first quarter of 2022. Basic and diluted loss per share were both earnings of RMB 0.04 in the first quarter of 2023, compared with the basic and diluted loss per share of RMB 0.05 in the first quarter of 2022. EBITDA for the first quarter of was a profit of RMB 19.9 million compared with RMB 20 million in the first quarter of 2022. Adjusted EBITDA for the quarter of 2023 was RMB 23.7 million compared with RMB 26.9 million in the first quarter of 2022. Adjusted profit after test for the first quarter of 2023 was RMB 4 million, compared with RMB 4.3 million in the first quarter of 2022. In terms of operating performance, as a result of a diversification of treatment centers, the company recorded a decrease of 8.7% year-on-year in the total active customers. The total number of non-surgical assisted medical treatment as a percentage of the total number of assisted treatment decreased by 8.4 percentage points. Average spending per customer increased by 1.4% from RMB 2,967 in the first quarter of 2022 to RMB 3,009 in the first quarter of 2023. primarily driven by the strategic decision to remove most of the lower-priced treatment promotions from our service offering. Looking ahead, we will continue to implement a force management strategy. We are dedicated to providing better and quality service to our customers and diversifying sustainable long-term growth. This concludes our preparation remarks. Thank you for joining us on today's call. We will now open the call to questions. Operator, please go ahead.
spk07: Yes, thank you. If you wish to ask a question, please press star then one in your telephone and wait for your name to be announced. If you wish to cancel your request, please press star then two. If you are on a speakerphone, please pick up the handset to ask your question.
spk02: And once again, please press star then 1 if you would like to ask a question.
spk07: All right, as there are no questions right now, I would like to return the floor to Mr. Derek Shih for any closing comments.
spk03: Okay, 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 ir.pengai.com.cn. We appreciate your interest and support in Aesthetic Medical International's I look forward to speaking with you again next time. Operator, please go ahead.
spk07: Thank you, everyone, again for attending Aesthetic Medical International's first quarter of 2023 earnings conference call. This concludes the call today, and we thank you for listening in. Goodbye.
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