Aesthetic Medical Reports Halved Revenue

Deloitte and CITIC Securities project a booming Chinese medical aesthetic market, expecting 20% annual growth.

Author: Belinda Zhou   

Aesthetic Medical International Holdings Group Ltd. (Nasdaq: AIH), known as "Peng'ai" in China, dropped 2% on plummeting demand in China in the first quarter. 

The Shenzhen-based plastic surgery company said in a statement today that revenue in the three months through March was $12.9 million, down 50% year-over-year. AIH said in a Q4 earnings release in April that the company would likely take a hit in the first quarter.

AIH reported $11.7 million, or 17 cents per share, in a net loss in the first quarter, compared with income of $3.2 million, or 5 cents per share in the same period the previous year. 

The company temporarily shut down its treatment centers in February and March due to the Covid-19 outbreak.

"As COVID-19 began to spread globally in the first quarter of 2020, our businesses encountered a great deal of uncertainty," Pengwu Zhou, the chief executive officer of AIH, said in the statement.

AIH has developed a ‘one-stop' aesthetic service offering, including both surgical and non-surgical aesthetic treatments in mainland China, Hong Kong and Singapore. AIH's total treatments dropped 3% in the first quarter to 67,000, including 14,541 surgical treatments and 52,405 non-surgical treatments.

The total active customers dropped to approximately 36,000 in the first quarter, down 13% year-over-year. Repeat customers accounted for 61% of the active customer base.

In March 2020, AIH entered into definitive agreements to acquire a controlling interest in two treatment centers: Shanghai Mingyue Aesthetic Medical and Xi'an New Pengai Yueji Aesthetic Medical Clinic.

"The timely and proactive measures we took ensured that our business operations remained resilient and allowed us to deliver solid performance after our aesthetic treatment centers resumed operations, in spite of the challenging environment," Zhou added.

Deloitte wrote in its analysis that the medical aesthetic market size in China reached 192.5 billion yuan ($27.4 billion) in 2017 with a growth rate of 22% from 2013 to 2017. The consulting firm also expects the industry to expand at 20% per year from 2018 to 2022 and hit 481 billion yuan ($69 billion) in 2022.

According to CITIC Securities, the medical aesthetic market is expected to grow 25% annually in China and be worth 300 billion yuan ($43 billion) by 2020,

Going forward, AIH said it expects that its revenue will gradually recover in the second quarter but didn't offer specific guidance.  

Shares in AIH closed at $6.11 per share, down 2% on Friday.