雍禾医疗(02279) - 2025 - 中期财报

Company Overview Yonghe Medical Group is China's leading one-stop hair medical service provider, expanding its market presence and enhancing core competitiveness through strategic acquisitions and R&D collaborations - Yonghe Medical Group is China's leading hair medical service provider, offering one-stop services including hair transplantation, medical hair care, routine maintenance, and other related services[5][7] - The Group expanded its business footprint beyond mainland China by acquiring Svenson's mainland China business and Prominent Hair Transplant's Hong Kong business[5][8] - Established a joint hair laboratory with Peking University People's Hospital to promote standardized diagnosis and treatment research for hair loss diseases, fostering industry-academia-research development[5][8] - The Group effectively controls costs, improves efficiency, and enhances profitability through its standardized, highly scalable business model and industry-leading operational capabilities[6][9] - Actively promotes new technologies such as data application and analysis, AI services, and online services to improve medical services and accelerate business development[6][9] Company Information This section provides detailed company information for Yonghe Medical Group, including board members, committee compositions, registered office, headquarters, auditors, legal counsel, stock code, and listing date - Board members include Executive Directors Zhang Yu (Chairman and CEO), Zhang Hui, Han Zhimei, Non-executive Director Geng Jiaqi, and Independent Non-executive Directors Liang Jihong, Chen Bingjun, Li Xiaopei[11] - The Audit Committee Chairman is Mr. Chen Bingjun, Remuneration Committee Chairman is Mr. Chen Bingjun, and Nomination Committee Chairman is Mr. Zhang Yu[11][12] - The company's registered office is in the Cayman Islands, its principal place of business in Hong Kong is in Lee Garden One, Causeway Bay, and its headquarters are in Chaoyang District, Beijing, China[13][14] - Auditor is PricewaterhouseCoopers, and legal advisors include Stephenson Harwood (Hong Kong law), Jingtian & Gongcheng (PRC law), and Campbells (Cayman Islands law)[15][17][18] - Stock code is 02279, and the listing date is December 13, 2021[18] Financial Highlights For the six months ended June 30, 2025, Yonghe Medical Group achieved RMB 861.6 million in revenue, RMB 550.3 million in gross profit, a 3.9% year-on-year increase, and a gross margin of 63.9%, successfully turning a profit of RMB 27.9 million with a net profit margin of 3.2%, while cash and cash equivalents increased to RMB 555.9 million For the Six Months Ended June 30, 2025 Financial Highlights | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue from contracts with customers | 861,550 | 900,203 | -4.3% | | Gross profit | 550,323 | 529,437 | +3.9% | | Profit/(Loss) before income tax | 37,809 | (146,699) | Turned to profit | | Profit/(Loss) for the period | 27,855 | (138,648) | Turned to profit | | Gross profit margin | 63.9% | 58.8% | +5.1 percentage points | | Net profit/(loss) margin | 3.2% | -15.4% | +18.6 percentage points | Financial Position (as at period end): | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total assets | 1,614,463 | 1,726,180 | | Total equity | 741,638 | 713,805 | | Total liabilities | 872,825 | 1,012,375 | | Cash and cash equivalents | 555,885 | 487,842 | Management Discussion and Analysis This section details Yonghe Medical Group's business performance, operational strategies, financial position, and future outlook for the reporting period, highlighting a successful turnaround driven by improved efficiency, cost control, and refined marketing Business Review Yonghe Medical Group, China's leading hair medical service provider, has built a comprehensive brand matrix covering hair transplantation, medical hair care, and routine maintenance, serving 64,845 consumers across 63 hair transplant clinics and 6 Svenson hair care centers in 61 cities, achieving a turnaround and improved gross margin through optimized operations - The Group has built a full-chain brand matrix with "Yonghe Medical" at its core, including "Yonghe Hair Transplant", "Svenson", "Yonghe Fazhichu", and "Hafada"[21][22] - As of June 30, 2025, the Group operates 63 hair transplant medical institutions in 61 cities nationwide and 6 Svenson hair care centers in Shenzhen, Shanghai, and Guangzhou, making it China's largest and most widely covered chain hair medical group[21][22] - During the reporting period, the total number of consumers served reached 64,845[21][22] - Through optimizing its clinic network layout and upgrading its independently developed chain medical management system "Hefan", the Group achieved refined management, leading to improved efficiency, quality control, and cost reduction[28][29] Key Financial Indicators for the Reporting Period | Indicator | 2025 (RMB million) | 2024 (RMB million) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | 861.6 | 900.2 | -4.3% | | Gross profit | 550.3 | 529.4 | +3.9% | | Gross profit margin | 63.9% | 58.8% | +5.1 percentage points | Number of Yonghe Hair Transplant Medical Institutions (by City Tier) | City Tier | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Tier 1 Cities | 5 | 6 | | New Tier 1 Cities | 17 | 17 | | Tier 2 Cities | 26 | 29 | | Tier 3 Cities | 14 | 13 | | Hong Kong | 1 | 1 | | Subtotal | 63 | 66 | | Svenson Independent Stores (Shenzhen, Guangzhou, Shanghai) | 6 | 8 | | Total | 69 | 74 | Hair Transplant Services During the reporting period, hair transplant services generated RMB 662.1 million in revenue, accounting for 76.8% of total revenue; despite a decrease in average spending, the number of consumers receiving hair transplant procedures significantly increased by 14.5% to 33,504, with the Group focusing on aesthetic design and female client needs Hair Transplant Services Revenue and Proportion | Indicator | 2025 (RMB thousand) | % of Total Revenue | 2024 (RMB thousand) | % of Total Revenue | | :--- | :--- | :--- | :--- | :--- | | Hair transplant medical services revenue | 662,061 | 76.8% | 672,885 | 74.8% | - Hair transplant services revenue was RMB 662.1 million, accounting for 76.8% of total revenue[32][33] - Implemented a "Good Doctor" multi-level service system and integrated aesthetic design to meet female clients' demand for aesthetic-oriented hair transplant solutions[32][33] Key Operating Data for Hair Transplant Medical Services | Indicator | 2025 | 2024 | Year-on-year Change | | :--- | :--- | :--- | :--- | | Number of consumers receiving hair transplant medical services | 33,504 | 29,272 | +14.5% | | Average spending per hair transplant consumer (RMB) | 19,761 | 22,987 | -14.0% | Number of Consumers by Service Level and Proportion: | Service Category | 2025 Number of Consumers | 2025 Proportion | 2024 Number of Consumers | 2024 Proportion | | :--- | :--- | :--- | :--- | :--- | | Business Director Service | 24,293 | 72.5% | 19,637 | 67.1% | | Business President Service | 7,458 | 22.3% | 7,935 | 27.1% | | "Yongxiang" Service | 1,753 | 5.2% | 1,700 | 5.8% | Medical Hair Care Services During the reporting period, medical hair care services generated RMB 187.9 million in revenue, representing 21.8% of total revenue; despite a decrease in consumer numbers, the Group strategically upgraded its product structure, transitioning hair care services towards high-value medical-grade packages to optimize resource allocation and enhance service added value Medical Hair Care Services Revenue and Proportion | Indicator | 2025 (RMB thousand) | % of Total Revenue | 2024 (RMB thousand) | % of Total Revenue | | :--- | :--- | :--- | :--- | :--- | | Medical hair care services revenue | 187,891 | 21.8% | 215,176 | 23.9% | - Medical hair care services revenue was RMB 187.9 million, accounting for 21.8% of total revenue[38][39] - The Group established "Svenson Medical Hair Care Centers" as a "store-within-a-store" model in each hair transplant medical institution, offering professional diagnosis and customized treatment services[38][39] - Strategically upgraded product structure, promoting the transformation of hair care services towards high-value medical-grade packages to improve resource utilization efficiency and service added value[38][39] Key Operating Data for Medical Hair Care Services | Indicator | 2025 | 2024 | Year-on-year Change | | :--- | :--- | :--- | :--- | | Number of consumers receiving medical hair care services | 44,912 | 49,683 | -9.6% | | Average spending per medical hair care consumer (RMB) | 4,184 | 4,311 | -3.0% | | Repurchase rate | 29.9% | 29.0% | +0.9 percentage points | Business Progress The Group significantly improved operational efficiency and service quality by enhancing supply chain synergy, optimizing medical service processes, and iterating technology, reducing per-surgery resource consumption; it also focused on the female hair health market with specialized clinics and VIP services, strengthening customer loyalty - Continuously promoted supply chain synergy and optimization of full-chain medical service processes, significantly improving operational efficiency and medical service quality[44][45] - Significantly reduced per-surgery resource consumption through technological iteration, consumable upgrades, and lean processes[44][45] - Focused on the female market by establishing independent clinics and launching specialized technical services, leading to a significant increase in customer satisfaction[44][46] - Enhanced private domain customer loyalty and repurchase performance through a VIP service system and membership ecosystem development[44][46] Number of Hair Transplant Medical Institutions by Development Stage | Development Stage | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Mature Clinics | 52 | 52 | | Developing Clinics | 11 | 13 | | New Clinics | – | 1 | | Total | 63 | 66 | Strengthening Medical Foundation and Upholding Medical Essence The Group adheres to a medical-centric service philosophy, continuously enhancing its professional medical talent system and service quality through systematic talent development, comprehensive diagnostic skill training, a tiered hair transplant doctor system, and strengthened post-operative management, supported by a team of 1,320 medical professionals and collaborations with industry partners and renowned medical schools - Newly recruited doctors must complete standardized training and pass strict quality assessments to ensure consistency and safety of medical services[51] - Built a comprehensive diagnostic skill training system covering aesthetic design capabilities to fully enhance service levels[51] - Implemented a tiered hair transplant doctor system, refined to 24 surgical quality assessment dimensions, continuously improving doctors' technical skills and surgical quality[51] - Strengthened post-operative management and full-cycle services, providing comprehensive hair health services to enhance core competitiveness[51] Professional Medical Team Composition (As of June 30, 2025) | Team Category | Number of People | | :--- | :--- | | Total Professional Team | 1,320 | | – Doctors | 226 | | – Nurses | 1,008 | | – Other Medical Professionals | 86 | - Actively collaborates with excellent upstream and downstream pharmaceutical companies in the hair industry to deepen cooperation in hair loss prevention and hair transplantation, promoting industry innovation and upgrading[53][54] - Continuously strengthens cooperation with renowned medical schools and top-tier hospitals, driving development in the hair medical field through academic seminars and joint research projects[53][54] Full-Chain Synergy and Refined Marketing Strategies The Group enhances full-process efficiency from lead generation to customer conversion through refined marketing strategies, strengthening private domain ecosystem development and intelligent tool application, optimizing media placement, and deepening brand-content-traffic synergy to precisely convert high-intent audiences, while innovating a "linkage complex" model to dynamically allocate resources to high-conversion channels and strategically target female and out-of-town markets for structural cost optimization - Promoted refined marketing strategies, strengthening private domain ecosystem development and intelligent tool application to enhance full-process efficiency from lead generation to customer conversion[56][58] - Significantly improved user loyalty and conversion efficiency through customer segmentation management and optimized membership benefits; built standardized service processes based on AI detection technology[56][58] - Optimized media placement structure, deepened brand-content-traffic synergy, and promoted precise conversion of high-intent audiences by co-building audience models on core content platforms[56][59] - Built a full-domain KOS matrix covering the entire user decision-making cycle, establishing a professional trust barrier with in-depth content and implementing a tiered operational strategy[56][60] - Innovatively created a "linkage complex" model, deploying diverse touchpoints at the front end to lower decision thresholds, and enhancing conversion efficiency at the back end through digital tools[57][61] - Strategically targeted female and out-of-town markets to achieve structural cost optimization, enhancing the resilience of the marketing system and sustained conversion capabilities[57][61] Technology-Driven Digital Transformation The Group is firmly advancing its "digitalization and intelligence" strategy, focusing on AI technology to enhance operational management efficiency and customer service experience, integrating an AI knowledge base engine into its "Hefan" system, building a "one item, one code" material traceability system, launching a mobile clinic business system, and promoting new-generation scalp detection equipment and intelligent scalp recognition technology for smart diagnosis and treatment, while refining its membership growth system and upgrading intelligent quality inspection mechanisms to ensure data security - Firmly advancing the "digitalization and intelligence" strategy, focusing on systematic construction with AI technology at its core to improve operational management efficiency and customer service experience[62][64] - The independently developed chain medical management system "Hefan" integrates an AI knowledge base engine, applied in core processes such as user tagging and intent recognition, significantly improving business link identification efficiency and per capita productivity[62][65] - Built a "one item, one code" material traceability system to strengthen medical safety, and launched a mobile clinic business system to enhance terminal operational responsiveness[62][65] - Promoted new-generation scalp detection equipment, combining image recognition with large medical models to create a visualized diagnosis and treatment system, driving hair medical care towards precision medicine[62][66] - Improved the private domain ecosystem's membership growth system, enhancing in-store conversion and repurchase rates through benefit design and referral mechanisms[63][67] - Upgraded the intelligent quality inspection protection mechanism, establishing a dynamic monitoring system covering the entire data lifecycle to ensure enterprise and customer data security[63][67] Future Outlook China's hair health market is projected to reach RMB 116.54 billion by 2028, and the Group plans to capitalize on this growth by refining operations, solidifying central functions, and strengthening AI empowerment, including enhancing single-store growth, optimizing female clinics, launching early hair loss products, improving remuneration, strengthening internet hospital functions, integrating online sales, establishing a three-tier product system, and deepening AI integration in medical scenarios Refining Operations for Business Growth Momentum The Group will focus on enhancing single-store growth capabilities of existing mature clinics, optimizing cost structures, and accelerating refined operational layouts for multi-department and appropriately sized clinics, while solidifying its leading position in high-tier cities and strategically expanding with light-asset smaller clinics in lower-tier cities, optimizing female clinics, launching early hair loss medical care products, and improving remuneration systems to attract and motivate talent - China's hair health market is expected to reach RMB 116.54 billion by 2028, and the Group will seize market opportunities[69][71] - Will focus on enhancing the single-store growth capabilities of existing mature clinics, optimizing cost structures, and accelerating the refined operational layout of multi-department and appropriately sized clinics[70][72][73] - Will solidify its leading position in high-tier cities and mature clinics, and strategically deploy light-asset smaller clinics in lower-tier cities to expand market share[70][73] - Further optimize female clinic construction, increasing the penetration rate of female aesthetic design and non-shaving hair transplant procedures to meet segmented market demands[74][75] - Launch medical hair care products targeting early-stage hair loss, mild hair loss, and young clients unsuitable for hair transplantation, shortening treatment cycles and enhancing customer experience[74][76] - Continuously optimize remuneration, performance appraisal, and internal development systems to attract outstanding talent, motivate employees, and promote a flatter management structure[74][77] Solidifying Central Functions and Building an Ecosystem Loop The Group will continuously strengthen the central function of its internet hospital, building a full-scenario online diagnosis and treatment matrix to achieve a closed-loop for user full-cycle health management, integrating online sales processes, connecting private domain e-commerce, internet hospitals, and core CRM systems for order synergy, establishing a three-tier product system from home self-testing to in-clinic deep examination, and upgrading its hair health membership system to enhance customer loyalty - Continuously strengthen the central function of the internet hospital, building a full-scenario online diagnosis and treatment matrix that integrates intelligent consultation, cloud-based testing, and digital service modules to achieve a closed-loop for user full-cycle health management[80][81] - Promote the online integration of sales processes, connecting private domain e-commerce, internet hospitals, and core CRM systems for order synergy, achieving closed-loop management of online product ordering and offline service fulfillment[82][83] - Establish a three-tier product system covering home self-testing to in-clinic deep examination, meeting diverse hair loss management needs and extending the service chain for home-based and light medical solutions[82][84] - Upgrade the hair health membership system, enhancing customer loyalty through medical points benefits and customized health content, and optimizing service synergy between private domains and offline clinics[82][84] Adhering to Technology Orientation and Strengthening AI Empowerment The Group will continue to promote the integration and application of Artificial Intelligence (AI) technology in hair medical scenarios, building a technology ecosystem centered on intelligent diagnosis and treatment systems, upgrading AI medical models to enhance precision and professionalism across the entire diagnosis and treatment process, strengthening intelligent service capabilities in the private domain ecosystem, advancing the application of smart hardware, and continuously developing an intelligent quality inspection system for quality control and risk prevention - Continuously deepen the integration and application of AI technology in medical scenarios, building a technology ecosystem centered on intelligent diagnosis and treatment systems to enhance the precision and professionalism of the entire hair medical process[85][86] - Strengthen the intelligent service capabilities of the private domain ecosystem, deeply integrating AI technology into the customer operation chain to improve service response efficiency and personalization[85][86] - Promote the application of smart hardware, achieving digital management of medical records through innovative equipment, providing technical support for precise diagnosis and treatment[85][86] - Continuously advance the construction of an intelligent quality inspection system, relying on AI technology to achieve quality control management and risk prevention throughout the diagnosis and treatment process, building a dynamic quality inspection capability system covering the entire business chain[85][86] Financial Review During the reporting period, the Group's revenue decreased by 4.3% year-on-year to RMB 861.6 million, but gross profit increased by 3.9% to RMB 550.3 million, with gross margin rising to 63.9%; selling and service costs, general and administrative expenses, and selling and marketing expenses all decreased due to clinic consolidation, team optimization, and refined marketing strategies, resulting in a successful turnaround with a net profit of RMB 27.9 million and a significant 226.7% increase in EBITDA, alongside stable cash flow and a substantially reduced gearing ratio Revenue For the six months ended June 30, 2025, the Group's total revenue was RMB 861.6 million, a 4.3% year-on-year decrease; hair transplant medical services revenue was RMB 662.1 million, down 1.6% primarily due to lower average spending, while medical hair care services revenue was RMB 187.9 million, down 12.7% mainly due to fewer patients Revenue Breakdown by Business Line | Business Line | 2025 (RMB thousand) | Proportion | 2024 (RMB thousand) | Proportion | | :--- | :--- | :--- | :--- | :--- | | Hair transplant medical services | 662,061 | 76.8% | 672,885 | 74.8% | | Medical hair care services | 187,891 | 21.8% | 215,176 | 23.9% | | Others | 11,598 | 1.4% | 12,142 | 1.3% | | Total | 861,550 | 100% | 900,203 | 100% | - Hair transplant medical services revenue decreased by 1.6% year-on-year, primarily due to a 14.0% decrease in average spending per hair transplant patient to RMB 19,761, despite a 14.5% increase in patient numbers to 33,504[92][93] - Medical hair care services revenue decreased by 12.7% year-on-year, mainly due to a 9.6% decrease in patient numbers to 44,912[94][95] - Other services revenue decreased by 4.5% year-on-year to RMB 11.6 million[96][99] Costs During the reporting period, selling and service costs were RMB 311.2 million, a 16.1% year-on-year decrease, with both staff costs and amortization and depreciation expenses declining, primarily due to clinic consolidation, optimization of the professional medical team structure, and the strategy of closing and integrating inefficient clinics Selling and Service Costs Breakdown (by Nature) | Cost Category | 2025 (RMB thousand) | Proportion | 2024 (RMB thousand) | Proportion | | :--- | :--- | :--- | :--- | :--- | | Staff costs | 125,701 | 40.4% | 142,032 | 38.3% | | Amortization and depreciation expenses | 112,318 | 36.1% | 152,677 | 41.2% | | Inventory and consumable costs | 52,518 | 16.9% | 50,549 | 13.6% | | Operating-related expenses | 14,391 | 4.6% | 19,596 | 5.3% | | Other expenses | 6,299 | 2.0% | 5,912 | 1.6% | | Total | 311,227 | 100% | 370,766 | 100% | - Total costs were RMB 311.2 million, a 16.1% decrease compared to RMB 370.8 million in the same period of 2024[102][105] - The decrease in staff costs was mainly due to clinic consolidation and optimization of the professional medical team structure[102][105] - The decrease in amortization and depreciation expenses was mainly due to the strategy of closing and integrating inefficient clinics[102][105] Gross Profit and Gross Margin For the six months ended June 30, 2025, the Group's gross profit was RMB 550.3 million, a 3.9% year-on-year increase, with gross margin significantly improving by 5.1 percentage points to 63.9% Gross Profit and Gross Margin | Indicator | 2025 (RMB million) | 2024 (RMB million) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Gross profit | 550.3 | 529.4 | +3.9% | | Gross profit margin | 63.9% | 58.8% | +5.1 percentage points | Other Income During the reporting period, the Group's other income, primarily from government grants and VAT super deduction, totaled RMB 0.7 million, remaining largely consistent with the prior year Other Income | Indicator | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Other income | 0.7 | 0.8 | General and Administrative Expenses For the six months ended June 30, 2025, general and administrative expenses were RMB 112.1 million, a 20.4% year-on-year decrease, primarily attributable to improved management efficiency and a streamlined Group organizational structure General and Administrative Expenses Breakdown (by Nature) | Expense Category | 2025 (RMB thousand) | Proportion | 2024 (RMB thousand) | Proportion | | :--- | :--- | :--- | :--- | :--- | | Staff costs | 78,648 | 70.2% | 97,483 | 69.1% | | Amortization and depreciation expenses | 7,017 | 6.3% | 9,441 | 6.7% | | Operating-related expenses | 6,965 | 6.2% | 9,096 | 6.5% | | Professional and consulting service fees | 6,126 | 5.5% | 6,757 | 4.8% | | Travel and entertainment expenses | 4,723 | 4.2% | 4,952 | 3.5% | | Others | 8,613 | 7.6% | 13,241 | 9.4% | | Total | 112,092 | 100% | 140,970 | 100% | - General and administrative expenses decreased by 20.4% year-on-year, mainly due to improved management efficiency and a streamlined Group organizational structure[110] Selling and Marketing Expenses During the reporting period, selling and marketing expenses were RMB 381.4 million, a 17.5% year-on-year decrease, primarily due to the Group's optimized resource allocation and refined marketing strategies, leading to reduced marketing and promotion expenses Selling and Marketing Expenses Breakdown (by Nature) | Expense Category | 2025 (RMB thousand) | Proportion | 2024 (RMB thousand) | Proportion | | :--- | :--- | :--- | :--- | :--- | | Marketing and promotion expenses | 254,047 | 66.6% | 322,749 | 69.7% | | Staff costs | 109,966 | 28.8% | 119,716 | 25.9% | | Amortization and depreciation expenses | 5,817 | 1.5% | 6,457 | 1.4% | | Travel expenses | 4,967 | 1.3% | 5,892 | 1.3% | | Operating-related expenses | 2,417 | 0.6% | 3,101 | 0.7% | | Others | 4,194 | 1.2% | 4,658 | 1.0% | | Total | 381,408 | 100% | 462,573 | 100% | - Selling and marketing expenses decreased by 17.5% year-on-year, with marketing and promotion expenses decreasing mainly due to optimized resource allocation and refined marketing strategies[114] Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) For the six months ended June 30, 2025, the Group's EBITDA was RMB 169.8 million, a significant 226.7% increase from RMB 52.0 million in the prior year, indicating substantial improvement in operating efficiency EBITDA and Reconciliation Items | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Profit/(Loss) | 27,855 | (138,648) | Turned to profit | | Income tax expense/(credit) | 9,954 | (8,051) | | | Finance income | (5,882) | (5,524) | | | Finance costs | 12,768 | 21,574 | | | Depreciation of right-of-use assets | 62,687 | 81,302 | | | Depreciation of property, plant and equipment | 60,137 | 85,862 | | | Impairment loss on property, plant and equipment | – | 14,064 | | | Amortization of intangible assets | 2,328 | 1,411 | | | Earnings Before Interest, Tax, Depreciation and Amortization | 169,847 | 51,990 | +226.7% | Income Tax Expense / (Credit) For the six months ended June 30, 2025, the Group's income tax expense was RMB 10.0 million, compared to an income tax credit of RMB 8.1 million in the prior year, primarily due to the turnaround from loss to profit in the current period Income Tax Expense / (Credit) | Indicator | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Income tax expense/(credit) | 10.0 | (8.1) | - The increase in income tax expense is mainly due to the turnaround from loss to profit in the current period[119][122] Net Profit / (Loss) and Net Profit / (Loss) Margin For the six months ended June 30, 2025, the Group achieved a net profit of RMB 27.9 million, successfully reversing a net loss of RMB 138.6 million in the prior year, with the net profit margin significantly improving to 3.2% from a net loss margin of 15.4% Net Profit / (Loss) and Net Profit / (Loss) Margin | Indicator | 2025 (RMB million) | 2024 (RMB million) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Net profit/(loss) | 27.9 | (138.6) | Turned to profit | | Net profit/(loss) margin | 3.2% | -15.4% | +18.6 percentage points | - The turnaround is mainly attributed to increased gross profit margin driven by improved operational efficiency, and cost savings from optimized marketing and human resources[120][123] Cash and Cash Equivalents As of June 30, 2025, the Group's cash and cash equivalents increased to RMB 555.9 million from RMB 487.8 million at the end of 2024, indicating robust cash flow Cash and Cash Equivalents | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Cash and cash equivalents | 555.9 | 487.8 | - The Group maintains robust cash flow, sufficient to meet daily working capital needs and future clinic expansion plans[121][124] Cash Flows For the six months ended June 30, 2025, net cash from operating activities significantly increased to RMB 208.5 million, while net cash used in investing and financing activities both decreased, with cash and cash equivalents increasing to RMB 555.9 million at period-end Selected Data from Consolidated Cash Flow Statement | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net cash from operating activities | 208,484 | 73,974 | | Net cash used in investing activities | (8,294) | (18,282) | | Net cash used in financing activities | (132,105) | (125,169) | | Cash and cash equivalents at beginning of period | 487,842 | 603,215 | | Cash and cash equivalents at end of period | 555,885 | 533,780 | Liquidity and Capital Resources As of June 30, 2025, the Group's cash and cash equivalents were RMB 555.9 million, with bank borrowings of RMB 5.0 million, indicating ample liquidity Liquidity Position | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Cash and cash equivalents | 555.9 | 487.8 | | Bank borrowings | 5.0 | 50.1 | Capital Expenditures For the six months ended June 30, 2025, the Group's capital expenditures were RMB 8.5 million, primarily for purchasing property, plant and equipment and intangible assets, a decrease from RMB 18.4 million in the prior year Capital Expenditures Breakdown | Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Payments for property, plant and equipment | 7,712 | 13,966 | | Payments for intangible assets | 800 | 4,398 | | Total | 8,512 | 18,364 | - Capital expenditures decreased by 53.7% year-on-year, reflecting a slowdown in the Group's investments in fixed assets and intangible assets[133] Indebtedness As of June 30, 2025, the Group's total indebtedness significantly decreased to RMB 521.0 million from RMB 667.1 million at the end of 2024, with bank borrowings falling from RMB 50.1 million to RMB 5.0 million and lease liabilities also reducing Indebtedness Breakdown | Category | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Current | | | | Bank borrowings | 5,004 | 50,051 | | Lease liabilities | 129,291 | 150,551 | | Non-current | | | | Lease liabilities | 386,693 | 466,531 | | Total | 520,988 | 667,133 | - Bank borrowings significantly decreased by 90.0%, from RMB 50.1 million to RMB 5.0 million, with annual interest rates ranging from 2.8% to 3.2%[138][142] - Total lease liabilities were RMB 516.0 million, a decrease from RMB 617.1 million at the end of 2024[139][143] Material Acquisitions and Disposals For the six months ended June 30, 2025, the Group did not undertake any material acquisitions or disposals of subsidiaries, associates, or joint ventures, nor did it hold any material investments - During the reporting period, the Group had no material acquisitions or disposals of any subsidiaries, associates, or joint ventures[140][144] - As of June 30, 2025, the Group held no material investments[140][144] Plans for Material Investments or Capital Asset Purchases As of June 30, 2025, the Group had no plans for material investments or capital asset purchases, other than those disclosed in the prospectus - As of June 30, 2025, the Group had no plans for material investments or capital asset purchases, other than those disclosed in the prospectus[141][145] Pledge of Assets As of June 30, 2025, the Group had no pledge of assets - As of June 30, 2025, the Group had no pledge of assets[147][152] Gearing Ratio As of June 30, 2025, the Group's gearing ratio was 0.7%, a significant decrease from 7.0% at the end of 2024, indicating a substantial reduction in financial leverage Gearing Ratio | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Gearing ratio | 0.7% | 7.0% | Exchange Rates and Any Related Hedges The Group has no significant foreign currency risk as its operations, assets, and liabilities are primarily denominated in RMB; as of June 30, 2025, foreign currency-denominated cash and cash equivalents amounted to RMB 6.0 million, and the Group will monitor foreign exchange risk and consider hedging when necessary - The Group has no significant foreign currency risk as its operations, assets, and liabilities are primarily denominated in RMB[149][154] - As of June 30, 2025, foreign currency (primarily USD) denominated cash and cash equivalents amounted to RMB 6.0 million[149][154] Contingent Liabilities As of June 30, 2025, the Group had no material contingent liabilities - As of June 30, 2025, the Group had no material contingent liabilities[150][155] Employees and Remuneration Policy As of June 30, 2025, the Group had 3,228 employees, including 1,320 professional medical team members, with staff costs of RMB 323.1 million during the reporting period; the Group offers competitive remuneration, promotion opportunities, training, and participates in social security schemes for its employees Employees and Remuneration Policy | Indicator | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total number of employees | 3,228 | - | | Number of professional medical team members | 1,320 | - | | Staff costs (RMB million) | 323.1 | 371.3 | - The Group provides competitive remuneration packages, promotion opportunities, diverse training programs, and a professional working environment[151][157] - Remuneration packages primarily include basic salary, performance bonuses and/or discretionary bonuses, and employees participate in various social security schemes[151][157] Corporate Governance and Other Information This section outlines Yonghe Medical Group's corporate governance practices, including compliance with the Corporate Governance Code and Model Code for Securities Transactions, Audit Committee responsibilities, and the use of global offering proceeds, along with disclosures on changes in directors' information, equity interests of directors and substantial shareholders, and updates on contractual arrangements, share incentive schemes, and share repurchases, confirming no material non-compliance and no interim dividend declared Compliance with Corporate Governance Code The Company is committed to high standards of corporate governance and has applied the Corporate Governance Code, with a deviation from Code Provision C.2.1 (separation of Chairman and CEO roles), as the Board believes the current arrangement benefits management and maintains a highly independent board composition - The Company has applied all applicable principles and code provisions of the Corporate Governance Code, with a deviation from Code Provision C.2.1 (separation of Chairman and CEO roles)[158][162] - Mr. Zhang Yu serves as both Chairman and Chief Executive Officer, responsible for the Group's overall strategic planning, business direction, and operational management[158][162][163] - The Board believes the dual role benefits the Group's management, and the Board's composition of three executive directors, one non-executive director, and three independent non-executive directors ensures high independence[158][162] Compliance with Model Code for Securities Transactions The Company has adopted the Model Code for Securities Transactions as set out in Appendix C3 of the Listing Rules, and all Directors confirmed compliance with the Code during the reporting period - The Company has adopted the Model Code for Securities Transactions as set out in Appendix C3 of the Listing Rules for Directors' dealings in the Company's securities[160][164] - All Directors confirmed compliance with the Model Code for the six months ended June 30, 2025[160][164] Audit Committee The Audit Committee, comprising two independent non-executive directors and one non-executive director, chaired by Mr. Chen Bingjun, assists the Board in reviewing financial information, risk management, internal control systems, internal audit functions, and the appointment of external auditors - The Audit Committee comprises Mr. Chen Bingjun (Chairman), Mr. Li Xiaopei (Independent Non-executive Director), and Mr. Geng Jiaqi (Non-executive Director)[166][169] - Its primary responsibilities include reviewing financial information and reporting procedures, risk management and internal control systems, the effectiveness of the internal audit function, audit scope, and the appointment of external auditors[166][170] Review of Interim Results and Interim Report The Audit Committee, in conjunction with management and the independent auditor, reviewed the Company's adopted accounting principles and policies, and discussed internal controls and financial reporting matters, including the unaudited condensed consolidated interim financial information for the six months ended June 30, 2025 - The Audit Committee, in conjunction with management and the independent auditor, reviewed the Company's adopted accounting principles and policies, and discussed internal controls and financial reporting matters[167][171] - The unaudited condensed consolidated interim financial information for the six months ended June 30, 2025, has been reviewed by the independent auditor in accordance with Hong Kong Standard on Review Engagements 2410[167][171] Use of Proceeds from Global Offering and Changes in Use of Proceeds The Company's global offering generated net proceeds of approximately HKD 1,526.2 million; the Board resolved on March 30, 2023, and August 22, 2024, to change the use of unutilized net proceeds, with HKD 159.0 million actually used for product and service innovation, R&D investment, and integrating industry resources to enhance brand awareness for the six months ended June 30, 2025 - Net proceeds from the global offering amounted to approximately HKD 1,526.2 million[172] - The Board resolved on March 30, 2023, and August 22, 2024, to change the use of unutilized net proceeds[173] Actual Use of Proceeds for the Six Months Ended June 30, 2025 | Use of Proceeds | Planned Application Amount (HKD million) | Unutilized Funds as of December 31, 2024 (HKD million) | Actual Use During Period (HKD million) | Unutilized Funds as of June 30, 2025 (HKD million) | Expected Full Utilization Timeline | | :--- | :--- | :--- | :--- | :--- | :--- | | Expansion and upgrading of existing hair transplant medical institutions | – | – | – | – | Not applicable | | Product and service innovation | 88.6 | 78.3 | 20.3 | 58.0 | Before December 2025 | | Investment in R&D, enhancing service system | 38.2 | 30.2 | 8.6 | 21.6 | Before December 2025 | | Integration of industry resources to enhance brand awareness | 122.3 | 112.4 | 41.7 | 70.7 | Before December 2025 | | Settlement of acquisition consideration for Prominent Hair Transplant | – | – | – | – | Not applicable | | Working capital and general corporate purposes | 251.0 | 88.4 | 88.4 | – | Not applicable | | Total | 500.1 | 309.3 | 159.0 | 150.3 | | Compliance with Relevant Laws and Regulations The Group complied with all material aspects of relevant laws and regulations significantly affecting its business and operations during the reporting period, with no material non-compliance; it implemented internal control policies and procedures to promote compliance, continuously rectifying non-compliance issues, ensuring all operating medical institutions hold practice licenses, actively addressing fire safety and drainage permits, and obtaining local health department approvals for all medical advertisements - The Group complied with all material aspects of relevant laws and regulations significantly affecting its business and operations during the reporting period, with no material non-compliance[178][179] - A series of internal control policies, measures, and procedures have been adopted and implemented, and are regularly reviewed and improved to strengthen corporate governance practices and the effectiveness of internal control procedures[178][180] - As of now, all operating medical institutions hold practice licenses[181] - Some medical institutions in Quanzhou and Lanzhou are actively applying for fire safety control procedures and drainage permits, while others have been properly completed[181] - All medical institutions obtained approval certificates for medical advertisements from local health authorities when publishing relevant advertisements[181] - Strict standards are applied to the review of leased properties, ensuring no title defects for new properties; 42 leased properties have been registered, with the remainder undergoing filing and registration[187] - During the reporting period, all surgeries performed in medical institutions were conducted by or under the supervision of doctors holding medical aesthetic principal qualifications[187] Changes in Directors' Information As of the report date, Non-executive Director Mr. Geng Jiaqi resigned as a non-executive director of Beauty Farm Medical and Health Industry Inc. effective August 18, 2025; no other changes in directors' information requiring disclosure occurred during the reporting period - Non-executive Director Mr. Geng Jiaqi resigned as a non-executive director of Beauty Farm Medical and Health Industry Inc. effective August 18, 2025[183][184] - Save for the above disclosure, there were no other changes in Directors' information required to be disclosed under Rule 13.51B(1) of the Listing Rules during the reporting period and up to the date of this interim report[183][185] Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company or its Associated Corporations As of June 30, 2025, Directors and the Chief Executive held interests in the Company's shares, with Mr. Zhang Yu holding 30.74% and 3.81% through a discretionary trust and controlled corporation, Mr. Zhang Hui holding 4.57% and 0.05% through a discretionary trust and as beneficial owner, Mr. Geng Jiaqi holding 0.13% through a controlled corporation, and Ms. Han Zhimei beneficially owning 0.07% Directors' and Chief Executive's Share Interests (As of June 30, 2025) | Director Name | Capacity/Nature of Interest | Number of Issued Shares Held | Approximate % of Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Zhang Yu | Founder of a discretionary trust | 161,531,916 (L) | 30.74% | | | Interest in a controlled corporation | 20,000,000 (L) | 3.81% | | Mr. Zhang Hui | Founder of a discretionary trust | 24,000,000 (L) | 4.57% | | | Beneficial owner | 285,766 (L) | 0.05% | | Mr. Geng Jiaqi | Interest in a controlled corporation | 658,668 (L) | 0.13% | | Ms. Han Zhimei | Beneficial owner | 362,564 (L) | 0.07% | - Shareholding percentages are calculated based on the total number of 525,472,416 shares issued by the Company as of June 30, 2025[191] Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares As of June 30, 2025, substantial shareholders held interests in the Company's shares, with ZY Investment Capital Ltd and its affiliates holding 30.74%, Yonghe Hair Service Holdings Limited and its affiliates holding 17.48%, Panmao (Shanghai) Investment Center (Limited Partnership) and its affiliates holding 34.97%, CITIC Securities Company Limited and its affiliates holding 35.09% long position and 0.12% short position, and Frandor Limited and its affiliates holding 35.31% Substantial Shareholders' Share Interests (As of June 30, 2025) | Substantial Shareholder Name | Capacity/Nature of Interest | Number of Issued Shares Held | Approximate % of Issued Share Capital | | :--- | :--- | :--- | :--- | | ZY Investment Capital Ltd | Beneficial owner | 161,531,916 (L) | 30.74% | | ZY Ventures Ltd | Interest in a controlled corporation | 161,531,916 (L) | 30.74% | | Yonghe Hair Service Holdings Limited | Beneficial owner; jointly interested with another person | 91,866,668 (L) | 17.48% | | Panmao (Shanghai) Investment Center (Limited Partnership) | Interest in a controlled corporation | 183,733,336 (L) | 34.97% | | Shanghai Pan Nuo Enterprise Management Service Co., Ltd. | Interest in a controlled corporation | 183,733,336 (L) | 34.97% | | CITIC Private Equity Funds Management Co., Ltd. | Interest in a controlled corporation | 183,733,336 (L) | 34.97% | | CYH Cosmetic Medical Holdings Limited | Beneficial owner; jointly interested with another person | 91,866,668 (L) | 17.48% | | CYH Cosmetic Medical Investment Limited | Interest in a controlled corporation | 183,733,336 (L) | 34.97% | | CPEChina Fund II, L.P. | Interest in a controlled corporation; jointly interested with another person | 183,733,336 (L) | 34.97% | | CPEChina Fund IIA, L.P. | Interest in a controlled corporation; jointly interested with another person | 183,733,336 (L) | 34.97% | | Citron PE Associates II, L.P. | Interest in a controlled corporation | 183,733,336 (L) | 34.97% | | Citron PE Funds II Limited | Interest in a controlled corporation | 183,733,336 (L) | 34.97% | | Citron PE Holdings Limited | Interest in a controlled corporation | 183,733,336 (L) | 34.97% | | CITIC Securities Company Limited | Interest in a controlled corporation | 184,388,336 (L) | 35.09% | | | | 655,000 (S) | 0.12% | | Frandor Limited | Interest in a controlled corporation | 185,531,916 (L) | 35.31% | | Trident Trust Company (Singapore) Pte Limited | Interest in a controlled corporation | 185,531,916 (L) | 35.31% | - Shareholding percentages are calculated based on the total number of 525,472,416 shares issued by the Company as of June 30, 2025[199] Contractual Arrangements Due to foreign investment equity restrictions in Chinese medical institutions, the Group effectively controls the operations and receives economic benefits from its Variable Interest Entities (VIE Entities) through a series of contractual arrangements with Beijing Xunyii and its registered shareholders; the Board confirmed no material changes to these arrangements or their adoption status, and no termination events - The Group primarily engages in hair transplant medical services and medical hair care services, which fall under the "Restricted Category" of China's "Special Administrative Measures for Foreign Investment Access (Negative List) (2021 Edition)"[202][204] - As a foreign entity, the Company's equity in medical institutions in Sichuan Province may not exceed 90%, and in other provinces, it may not exceed 70%[202][205] - The Group effectively controls the operations and receives economic benefits from its Variable Interest Entities (VIE Entities) through a series of contractual arrangements with Beijing Xunyii and its registered shareholders[202][205] - The Board confirmed no material changes to the contractual arrangements and/or their adoption status and impact on the Group, nor any termination of the contractual arrangements[207][210][211] Share Incentive Schemes The Company established the "8% Employee Share Scheme" and "6% Employee Share Scheme" on March 31, 2020; under the 8% scheme, shares awarded to Mr. Zhang Yu have fully vested, while those for eligible employees will vest upon completion of service, with no shares granted, cancelled, or lapsed during the reporting period; under the 6% scheme, shares issued to ZY Investment Capital Ltd have fully vested - The "8% Employee Share Scheme" and "6% Employee Share Scheme" were established on March 31, 2020[208][212] - Under the 8% Employee Share Scheme, Mr. Zhang Yu and eligible employees were granted 5,000,000 shares and 3,000,000 shares, respectively[208][213] - Shares granted to Mr. Zhang Yu fully vested in May 2021, while shares for eligible employees will vest upon completion of their service period[208][213] - During the reporting period, no shares were granted, cancelled, or lapsed under the 8% Employee Share Scheme[214] - Under the 6% Employee Share Scheme, the Company issued 6,382,979 shares to ZY Investment Capital Ltd on April 26, 2021, which have fully vested[214] 2022 Restricted Share Unit Scheme The Board approved and adopted the 2022 Restricted Share Unit Scheme on July 26, 2022, to incentivize and retain contributors to the Group's development; the scheme has a ten-year validity, with total shares that can be granted not exceeding 10% of the Company's issued share capital, and no restricted share units had been granted as of June 30, 2025 - The Board approved and adopted the 2022 Restricted Share Unit Scheme on July 26, 2022, aiming to incentivize and retain transferees who contribute to the Group's development[215][217] - The scheme is valid for ten (10) years from the adoption date[215][217] - The total number of shares that can be granted under the scheme does not exceed 10% (52,551,941 shares) of the Company's issued share capital[215][217] - As of June 30, 2025, no restricted share units had been granted by the Group[215][217] Repurchase, Sale or Redemption of the Company's Listed Securities For the six months ended June 30, 2025, the Company repurchased a total of 100,000 shares on the Stock Exchange, representing 0.019% of total share capital, for approximately HKD 90,125, which the Board believes demonstrates confidence in business development; 47,000 shares were cancelled on June 5, 2025, reducing issued shares, while 248,000 repurchased shares remained uncancelled and held as treasury shares with no intention of use - For the six months ended June 30, 2025, the Company repurchased a total of 100,000 shares on the Stock Exchange, representing 0.019% of the total share capital[216][218] Monthly Share Repurchase Report (April 2025) | Repurchase Month | Number of Shares Repurchased | Highest Price Per Share (HKD) | Lowest Price Per Share (HKD) | Total Amount (HKD) | | :--- | :--- | :--- | :--- | :--- | | April 2025 | 100,000 | 0.91 | 0.90 | 90,125 | - The Board believes that the share repurchases demonstrate the Company's confidence in its business development and prospects, aligning with the overall interests of the Company and its shareholders[221][224] - On June 5, 2025, the Company cancelled 47,000 shares, reducing the number of issued shares to 525,472,416[221][225] - As of June 30, 2025, 248,000 repurchased shares remained uncancelled, held by the Company as treasury shares, with no intention of use[221][225] - During the reporting period, neither the Group nor any of its subsidiaries repurchased, sold, or redeemed any of the Company's listed securities (including the sale of treasury shares)[226] Interim Dividend The Board resolved not to declare an interim dividend for the six months ended June 30, 2025 - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025[222][227] Events After Reporting Period Save for those disclosed in this report, there were no material events after the reporting period that could affect the Group - Save for those disclosed in this report, there were no material events after the reporting period that could affect the Group[223][228] Review Report on Interim Financial Information PricewaterhouseCoopers reviewed Yonghe Medical Group's interim financial information for the six months ended June 30, 2025, in accordance with Hong Kong Standard on Review Engagements 2410; the review scope is less than an audit, thus no audit opinion is expressed, and no matters were found to suggest the interim financial information was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" - PricewaterhouseCoopers reviewed Yonghe Medical Group's interim financial information for the six months ended June 30, 2025[230][233] - The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity", with a scope less than an audit, thus no audit opinion is expressed[231][234] - The auditor found no matters that would lead them to believe the interim financial information was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting"[232][235] Interim Condensed Consolidated Statement of Comprehensive Income For the six months ended June 30, 2025, Yonghe Medical Group achieved RMB 861.6 million in revenue and RMB 550.3 million in gross profit, successfully turning a profit of RMB 27.9 million for the period, compared to a loss of RMB 138.6 million in the prior year, with basic and diluted earnings per share both at RMB 0.06 Summary of Interim Condensed Consolidated Statement of Comprehensive Income | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue from contracts with customers | 861,550 | 900,203 | | Cost of sales and services | (311,227) | (370,766) | | Gross profit | 550,323 | 529,437 | | Selling and marketing expenses | (381,408) | (462,573) | | General and administrative expenses | (112,092) | (140,970) | | Research and development expenses | (9,053) | (12,425) | | Operating profit/(loss) | 44,695 | (130,649) | | Profit/(Loss) before income tax | 37,809 | (146,699) | | Profit/(Loss) for the period | 27,855 | (138,648) | | Basic earnings/(loss) per share attributable to equity holders of the Company (RMB) | 0.06 | (0.28) | | Diluted earnings/(loss) per share attributable to equity holders of the Company (RMB) | 0.06 | (0.28) | Interim Condensed Consolidated Statement of Financial Position As of June 30, 2025, Yonghe Medical Group's total assets were RMB 1,614.5 million, total equity RMB 741.6 million, and total liabilities RMB 872.8 million; cash and cash equivalents increased to RMB 555.9 million, while non-c