6-K 1 tm2421786d1_6k.htm FORM 6-K

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

Form 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of August 2024

 

Commission File Number: 001-39088

 

Aesthetic Medical International Holdings Group Limited

 

1122 Nanshan Boulevard

Nanshan District, Shenzhen

Guangdong Province, China 518052

(Address of principal executive offices)

 

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

 

Form 20-F  x   Form 40-F  ¨

 

 

 

 

 

 

Aesthetic Medical International Reports First Half of 2024 Unaudited Financial Results

 

Shenzhen, China, August 16, 2024 — Aesthetic Medical International Holdings Group Limited (OTCQX: PAIYY) (the “Company” or “AIH”), a leading provider of aesthetic medical services in China, announced its unaudited financial results for the six months ended June 30, 2024.

 

Mr. Zhang Chen, the Chairman of the Company, commented, “Looking back at the first half of 2024, we are pleased with the positive feedback received on our operational optimization and service quality improvements over the past period. The ratings for our 10 medical institutions on Dianping, China’s largest online local service platform, are all above 4.8 out of 5. This reflects the widespread recognition and appreciation of our “Pengai” brand among consumers in first-tier cities and select second-tier cities across mainland China. To continue maintaining a high level of customer satisfaction, we have introduced the NPS (Net Promoter Score) metric across our medical institutions, under the leadership of our COO, Ms. Hu Qing. This tool measures customer satisfaction with our services and reflects the overall perception of our brand. By collecting customer feedback, we can promptly address service issues within 24 hours, thereby increasing repeat purchases and enhancing the likelihood of existing customers referring new ones. We have set specific targets and corresponding rewards for employees to collect NPS surveys. As of now, we have gathered a substantial amount of customer feedback, which has clarified our direction for service improvement and created a positive feedback loop.”

 

Mr. Zhang Chen continued, “In the first half of this year, our revenue increased by 13.8% year-on-year, and the total number of treatment cases rose by 28.9% compared to the same period last year. Achieving such growth amid a challenging market environment and intense industry competition is a testament to the dedication and hard work of every employee. To accommodate a larger volume of traffic, we have implemented the 7S On-Site Management Method, which stands for the initials of seven Japanese and English terms: Seiri (Sort), Seiton (Set in Order), Seiso (Shine), Seiketsu (Standardize), Shitsuke (Sustain), Service, and Saving. By introducing this management system, we have significantly improved the cleanliness and organization of various functional areas, including public spaces, consultation rooms, doctors’ examination rooms, and treatment rooms. As a result, our customers can experience an orderly and comfortable environment even during peak times. Looking ahead, we aim to lead in healthcare excellence by embracing innovation, enhancing customer care, building lasting relationships with our customers, and setting new standards for quality and compassion.”

 

First Half 2024 Financial Highlights

 

· Total revenue was RMB363.4 million (USD50.0 million), an increase of 13.8% from RMB319.3 million in the first half of 2023.

 

· Gross profit was RMB159.5 million (USD22.0 million), an increase of 5.1% from RMB151.8 million in the first half of 2023.

 

· Selling, general and administrative (“SG&A”) expenses together were RMB177.2 million (USD24.4 million), an increase of 10.9% from RMB159.8 million in the first half of 2023, and SG&A expenses as a percentage of revenue decreased from 50.0% to 48.8%.

 

· EBITDA1 was RMB13.9 million (USD1.9 million), compared with RMB22.4 million in the first half of 2023.

 

· Adjusted EBITDA1 was RMB16.0 million (USD2.2 million), compared with RMB26.7 million in the first half of 2023.

 

1 EBITDA and adjusted EBITDA are not prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standard Board, or IFRS. For more information regarding non-IFRS financials, please refer to “Non-IFRS Financial Measures” and “Reconciliations of IFRS and Non-IFRS Results” appearing elsewhere in this report.

 

 

 

 

First Half 2024 Operational Highlights

 

New and repeat customers

 

   For the Six Months Ended June 30, 
   2023   2024     
   Number   % of
Total		   Number   % of
Total		   %
Change		 
New Customers   32,685    31.4%   55,636    41.8%   70.2%
Repeat Customers   71,488    68.6%   77,329    58.2%   8.2%
Total Active Customers   104,173    100.0%   132,966    100.0%   27.6%

 

· As a result of the increased advertising expenditures and marketing campaigns centered on experienced senior physicians in the first half of 2024, the Company recorded an increase of 27.6% year-on-year in total active customers.

 

Number of aesthetic medical treatment cases

 

   For the Six Months Ended June 30, 
   2023   2024     
   Number   % of
Total		   Number   % of
Total		   %
Change		 
Energy-based Treatments   177,603    69.3%   242,118    73.2%   36.3%
Minimally Invasive Aesthetic Treatments   43,414    16.9%   50,897    15.4%   17.2%
Surgical Treatments   22,054    8.6%   14,956    4.5%   -32.2%
General healthcare services and other aesthetic medical services   13,378    5.2%   22,688    6.9%   69.6%
Total number of treatment cases   256,449    100.0%   330,659    100.0%   28.9%

 

· As a result of the increased advertising expenditures and the hiring and training of more experienced senior physicians to efficiently deliver aesthetic treatment services in the first half of 2024, the Company recorded an increase in the number of treatment cases of 28.9% year-on-year.

 

· Total number of non-surgical aesthetic medical treatments as a percentage of the total number of aesthetic treatments increased by 2.4 percentage points.

 

Average spending per customer

 

· Average spending per customer decreased by 11.7% from RMB1,245 in the first half of 2023 to RMB1,099 in the first half of 2024, primarily attributed to the implementation of more promotional activities, including discounted live streaming e-commerce, designed to stimulate customer spending.

 

 

 

 

First Half 2024 Unaudited Financial Results

 

    For the Six Months Ended June 30,  
(RMB millions, except per share data and percentages)   2023     2024     %
Change		  
Revenue     319.3       363.4       13.8 %
Non-surgical aesthetic medical services     229.9       264.4       15.0 %
Minimally invasive aesthetic treatments     114.2       116.2       1.7 %
Energy-based treatments     115.7       148.2       28.1 %
Surgical aesthetic medical services     57.8       66.3       14.7 %
General healthcare services and other aesthetic medical services     31.6       32.7       -11.9 %
Gross profit     151.8       159.5       5.1 %
Gross margin     47.5 %     43.9 %     -3.6 p.p.2
(Loss) for the period     (11.4 )     (22.4 )     N.M. 3 
(Loss) margin     (3.6 )%     (6.2 )%     N.M. 3 
EBITDA4      22.4       13.9       -38.0 %
Adjusted EBITDA4      26.7       16.0       -40.0 %
Adjusted EBITDA margin     8.4 %     4.4 %     -4.0 p.p.2
Adjusted profit/(loss)4      (7.0 )     (20.3 )     N.M. 3 
Adjusted profit/(loss) margin     (2.2 )%     (5.6 )%     N.M. 3 
Basic (loss) per share     (0.08 )     (0.15 )     -14.3 %
Diluted (loss) per share     (0.08 )     (0.15 )     -14.3 %

 

Notes:

2 p.p. represents percentage points

3 N.M. represents not meaningful

4 Refer to below “Non-IFRS Financial Measures”

 

Revenue

 

Total revenue was RMB363.4 million (USD50.0 million), representing an increase of 13.8% from RMB319.3 million in the first half of 2023, primarily attributable to increased advertising expenditures and promotional activities in the first half of 2024, which effectively acquired new customers and thus increased revenue.

 

Cost of sales and services rendered

 

Cost of sales and services rendered was RMB203.9 million (USD28.1 million), representing an increase of 21.7% from RMB167.5 million in the first half of 2023, primarily attributable to the increase in treatment cases and, consequently, higher medical consumable costs.

 

Gross profit

 

Gross profit was RMB159.5 million (USD22.0 million), representing an increase of 5.1% from RMB151.8 million in the first half of 2023. Gross profit margin was 43.9%, a decrease of 3.6 percentage points from 47.5% in the first half of 2023. The decrease in gross profit margin was primarily due to the higher proportion of non-surgical aesthetic treatments, which led to lower average spending per customer and increased costs for medical consumables.

 

Selling expenses

 

Selling expenses were RMB116.9 million (USD16.1 million), representing 32.2% of the Company’s total revenue in the first half of 2024, compared with RMB105.1 million in the first half of 2023, which represented 32.9% of the Company’s total revenue of the first half of 2023. Selling expenses as of revenue decreased by 0.7 percentage points year-on-year. The increase in selling expenses and the stable percentage of selling expenses relative to revenue were mainly due to the Company’s strategic investments in acquiring new customers and reinforcing its market leadership to strengthen its competitive position.

 

 

 

 

General and administrative expenses

 

General and administrative expenses were RMB60.2 million (USD8.3 million), representing an increase of 10.2% from RMB54.7 million in the first half of 2023, primarily due to our ongoing investment in the CRM (“Customer Relationship Management”) system, which forms the foundation of our advanced data analysis.

 

Other gains/(losses), net

 

Other gains/(losses), net was a loss of RMB2.2 million (USD0.3 million), compared with a loss of RMB3.9 million in the first half of 2023, primarily due to the divestment of non-core business subsidiaries.

 

Loss for the period

 

As a result of the foregoing, the Company recorded a loss of RMB22.4 million (USD3.1 million) for the first half of 2024, compared with a loss of RMB11.4 million in the first half of 2023. Basic and diluted loss per share were both loss of RMB0.15 (loss of USD0.02 per share) in the first half of 2024, compared with basic and diluted loss per share of RMB0.08 in the first half of 2023. The increase in losses was primarily due to a decrease of average spending per customer and a rise in SG&A expenses. Although this resulted in higher costs in the short term, acquiring more new customers and implementing a more advanced CRM system are expected to yield long-term benefits for our future operations.

 

Certain Non-IFRS items5

 

EBITDA for the first half of 2024 was RMB13.9 million (USD1.9 million), compared with RMB22.4 million in the first half of 2023.

 

Adjusted EBITDA for the first half of 2024 was RMB16.0 million (USD2.2 million), compared with RMB26.7 million in the first half of 2023.

 

Adjusted loss after tax for the first half of 2024 was a loss of RMB20.3 million (USD2.8 million), compared with a loss of RMB7.0 million in the first half of 2023.

 

5 EBITDA, adjusted EBITDA, and adjusted profit/(loss) are not prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standard Board, or IFRS. For more information regarding non-IFRS financials, please refer to “Non-IFRS Financial Measures” and “Reconciliations of IFRS and Non-IFRS Results” appearing elsewhere in this report.

 

Cash and cash equivalents

 

Cash and cash equivalents amounted to RMB44.5 million (USD6.1 million) as of June 30, 2024, compared with RMB87.9 million as of June 30, 2023. The decrease in cash and cash equivalents was primarily attributable to the repayment of bank borrowings, which is reflected under “Current liabilities - Borrowings” on our Consolidated Balance Sheet.

 

Liquidity and capital resources

 

The Company had a net current asset of deficit of RMB315.5 million (USD43.4 million) as of June 30, 2024, which included current borrowings of RMB81.8 million.

 

 

 

 

Recent Developments

 

Cash Sales Growth and Market Insights in Non-Surgical Aesthetic Treatments

 

In the first half of 2024, seven out of ten medical institutions reported a two-digit percentage increase in cash sales from non-surgical aesthetic treatments compared to the previous year. Notably, our leading revenue distributor, Shenzhen Pengcheng, achieved a remarkable 20.2% year-on-year growth in total cash sales, with a corresponding 20.9% increase specifically in non-surgical aesthetic treatments. This growth was bolstered by a significant 27.5% year-on-year rise in energy-based treatments. Our third and fourth leading revenue distributors, Shenzhen Xiuqi and Shanghai Pengai, also demonstrated strong year-on-year growth in total cash sales. Shenzhen Xiuqi achieved an impressive 26.5% increase, with a notable 14.5% rise specifically in non-surgical aesthetic treatments. Similarly, Shanghai Pengai reported an 18.9% growth in total cash sales, driven by a significant 19.4% increase in non-surgical aesthetic treatments. Looking ahead, the strong growth in non-surgical aesthetic treatments highlights a promising trend for the sector, suggesting opportunities for further development in the future.

 

Pengcheng Hospital’s Strategic Advancements in Marketing and Patient Care

 

In the first half of 2024, Shenzhen Pengcheng Hospital, the flagship hospital of our Company, intensified its marketing efforts by increasing adverstising spending and refining its deployment strategy. The focus was on leveraging efficient e-commerce platforms to showcase medical treatments online and improve offline service delivery, boosting conversion rates. This approach led to substantial growth in new customers from platforms like Meituan and So Young. The hospital also prioritized enhancing customer satisfaction, with repeat visits increasing by 14.8% year-on-year. This was achieved through prompt feedback mechanisms and VIP service enhancements. Additionally, Pengcheng Hospital explored new online channels and targeted marketing to attract customers from Hong Kong, while also creating medical content on platforms like Xiaohongshu (Little Red Book). In the second half of this year, Shenzhen Pengcheng Hospital aims to maintain operational efficiency and unified goals across its management team, continuing to execute strategic plans effectively. 

 

Achievements in Medical Quality Control

 

Recently, the Shenzhen Municipal Health Commission released the 2023 evaluations for medical quality and legal practice. Shenzhen Pengai Hospital, our flagship institution, received a grade B in the comprehensive evaluation and was recognized by the Health Commission—one of only seven aesthetic medical institutions in Shenzhen to be honored. Notably, as of this report, Shenzhen Pengai Hospital has had no administrative penalties, warnings, or records of malpractice from the Health Commission throughout the year. These commendable results highlight our strong performance in medical quality control and enhanced risk management capabilities.

 

Exchange Rate

 

This report contains translations of certain Renminbi (RMB) amounts into U.S. dollars (USD) solely for the convenience of the reader. Unless otherwise specified, all translations of Renminbi amounts into U.S. dollar amounts in this report are made at RMB7.2672 to USD1.0, as announced by the Board of Governors of the Federal Reserve System of the United States on June 28, 2024.

 

Non-IFRS Financial Measures

 

EBITDA represents profit before income tax, adjusted to exclude finance costs and amortization and depreciation. Adjusted EBITDA represents EBITDA, adjusted to exclude professional fee, loss on disposal of subsidiaries, and government grant.

 

Adjusted profit/(loss) represents profit/(loss) for the period, adjusted to exclude professional fee, loss on disposal of subsidiaries, and government grant.

 

 

 

 

EBITDA, adjusted EBITDA and adjusted profit/(loss) are non-IFRS financial measures. You should not consider EBITDA, adjusted EBITDA and adjusted profit/(loss) 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.

 

The Company presents EBITDA, adjusted EBITDA and adjusted profit/(loss) as supplemental performance measures because it believes that such measures provide useful information to the investors in understanding and evaluating the Company’s results of operations, and facilitate operating performance comparisons from period to period and company to company.

 

About Aesthetic Medical International Holdings Group Limited

 

AIH, known as “Peng’ai” in China, is a leading provider of aesthetic medical services in China. AIH operates through treatment centers that are spread across major cities in mainland China, with a major focus on the Guangdong-Hong Kong-Macau Greater Bay area and the Yangtze River Delta area. Leveraging over 20 years of clinical experience, AIH provides one-stop aesthetic service offerings, including surgical aesthetic treatments, non-surgical aesthetic treatments, general medical services, and other aesthetic services. For more information regarding the Company, please visit https://ir.aihgroup.net/.

 

Cautionary Statements

 

This report contains “forward-looking statements.” These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will”, “expects”, “anticipates”, “aims”, “future”, “intends”, “plans”, “believes”, “estimates”, “likely to” and similar statements. Statements that are not historical facts, including statements about the Company’s beliefs, plans and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. These risks and uncertainties and others that relate to the Company’s business and financial condition are detailed from time to time in the Company’s SEC filings, and could cause the actual results to differ materially from those contained in any forward-looking statement. These forward-looking statements are made only as of the date indicated, and the Company undertakes no obligation to update or revise the information contained in any forward-looking statements, except as required under applicable law.

 

Investor Relations Contacts

 

For investor and media inquiries, please contact:

Aesthetic Medical International Holdings Group Limited

Email: ir@pengai.com.cn

Website: https://ir.aihgroup.net

 

 

 

 

AESTHETIC MEDICAL INTERNATIONAL HOLDINGS GROUP LIMITED

CONSOLIDATED BALANCE SHEETS

 

   30 June   30 June   30 June 
   2023   2024   2024 
    RMB’000    RMB’000    USD’000 
ASSETS               
Non-current assets               
Property, plant and equipment   303,848    275,106    37,856 
Investment properties   23,065    22,911    3,153 
Intangible assets   36,500    36,842    5,070 
Prepayments and deposits   11,434    8,010    1,102 
Deferred income tax assets   69,482    81,881    11,267 
    444,329    424,750    58,448 
                
Current assets               
Inventories   23,710    14,419    1,984 
Trade receivables   7,379    11,408    1,570 
Other receivables, deposits and prepayments   33,121    25,992    3,577 
Amounts due from related parties   2,873    1,500    206 
Amounts due from non-controlling interests   -    656    90 
Restricted cash   2,049    49    7 
Asset held-for-sale   1,083    -    - 
Cash and cash equivalents   87,877    44,458    6,118 
    158,092    98,482    13,552 
Total assets   602,421    523,232    72,000 
                
EQUITY AND LIABILITIES               
Equity attributable to owners of the Company               
Share capital   873    978    135 
Treasury shares   (2,023)    (2,023)   (278)
Accumulated losses   (1,150,846)    (1,199,268)   (165,025)
Other reserves   1,197,885    1,228,175    169,003 
    45,889    27,862    3,835 
Non-controlling interests   (14,025)    (17,591)   (2,421)
Total equity   31,864    10,271    1,414 

 

 

 

 

AESTHETIC MEDICAL INTERNATIONAL HOLDINGS GROUP LIMITED

CONSOLIDATED BALANCE SHEETS (CONTINUED)

 

   30 June   30 June   30 June 
   2023   2024   2024 
    RMB’000    RMB’000    USD’000 
LIABILITIES               
Non-current liabilities               
Borrowings   29,545    30,732    4,229 
Lease liabilities   85,450    68,257    9,393 
    114,995    98,989    13,622 
                
Current liabilities               
Trade payables   36,414    43,646    6,006 
Accruals, other payables and provisions   36,857    36,711    5,052 
Contingent consideration and consideration payable   3,592    -    - 
Contract liabilities   165,390    184,628    25,406 
Borrowings   111,937    81,837    11,261 
Lease liabilities   27,391    34,657    4,769 
Current income tax liabilities   9,416    12,987    1,787 
Convertible note   64,565    19,506    2,684 
    455,562    413,972    56,964 
Total liabilities   570,557    512,961    70,586 
                
Total equity and liabilities   602,421    523,232    72,000 

 

 

 

 

AESTHETIC MEDICAL INTERNATIONAL HOLDINGS GROUP LIMITED

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

   30 June   30 June   30 June 
   2023   2024   2024 
    RMB’000    RMB’000    USD’000 
Revenue   319,303    363,383    50,003 
Cost of sales and services rendered   (167,547)    (203,851)    (28,051)
                
Gross profit   151,756    159,532    21,952 
Selling expenses   (105,113)    (116,944)   (16,092)
General and administrative expenses   (54,668)    (60,248)   (8,290)
Finance income   78    78    11 
Finance costs   (9,650)    (6,800)   (936)
Other gains/(losses), net   (3,878)    (2,174)   (299)
(Loss) before income tax   (21,475)    (26,556)   (3,654)
Income tax credit   10,124    4,126    568 
(Loss) for the period   (11,351)    (22,430)   (3,086)
Other comprehensive income/(loss):               
Currency translation differences   (379)   41    5 
Total other comprehensive income/(loss) for the year, net of tax   (379)   41    5 
Total comprehensive (loss)/income for the period   (11,730)   (22,389)   (3,081)
                
(Loss)/profit attributable to:               
Owners of the Company   (10,078)   (21,067)   (2,898)
Non-controlling interests   (1,273)   (1,363)   (188)
(Loss)/profit for the period   (11,351)   (22,430)   (3,086)

 

 

 

 

AESTHETIC MEDICAL INTERNATIONAL HOLDINGS GROUP LIMITED

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (CONTINUED)

 

   30 June   30 June   30 June 
   2023   2024   2024 
    RMB’000    RMB’000    USD’000 
(Loss)/earnings per share for (loss)/profit attributable to owners of the Company (in RMB per share)               
—Basic   (0.08)   (0.15)   (0.02)
—Diluted   (0.08)   (0.15)   (0.02)
                
Total comprehensive (loss)/income attributable to:               
Owners of the Company   (10,457)   (21,026)   (2,893)
Non-controlling interests   (1,273)   (1,363)   (188)
Total comprehensive (loss)/income for the year   (11,730)   (22,389)   (3,081)
EBITDA   22,361    13,866    1,908 
Adjusted EBITDA   26,728    16,031    2,206 
Adjusted profit/(loss)   (6,984)   (20,265)   (2,789)

 

AESTHETIC MEDICAL INTERNATIONAL HOLDINGS GROUP LIMITED

RECONCILIATIONS OF IFRS AND NON-IFRS RESULTS

 

EBITDA and Adjusted EBITDA   For the Six Months Ended June 30,  
    2023     2024     2024  
      RMB’000       RMB’000       USD’000  
(Loss)/profit before income tax for the period     (21,475 )     (26,556 )     (3,654 )
Adjustments                        
+ Finance costs     9,650       6,800       936  
+ Amortization and depreciation     34,186       33,622       4,626  
EBITDA     22,361       13,866       1,908  
                         
+ Professional fees     1,476       1,709       235  
+ Loss on disposal of subsidiaries     2,891       2,106       290  
- Government grant     -       (1,650 )     (227 )
Adjusted EBITDA     26,728       16,031       2,206  

 

 

 

 

AESTHETIC MEDICAL INTERNATIONAL HOLDINGS GROUP LIMITED

RECONCILIATIONS OF IFRS AND NON-IFRS RESULTS (CONTINUED)

 

Adjusted Profit/(Loss)   For the Six Months Ended June 30,  
    2023     2024     2024  
      RMB’000       RMB’000       USD’000  
(Loss)/profit for the period     (11,351 )     (22,430 )     (3,086 )
Adjustments                        
+ Professional fees     1,476       1,709       235  
+ Loss on disposal of subsidiaries     2,891       2,106       290  
- Government grant     -       (1,650 )     (227 )
Adjusted profit/(loss)     (6,984 )      (20,265 )     (2,789 )

 

 

 

 

SIGNATURES

 

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

 

  Aesthetic Medical International Holdings Group Limited
   
  By: /s/ Guanhua Wu
  Name: Guanhua Wu
  Title: Chief Financial Officer

 

Date: August 16, 2024