瑞丽医美(02135) - 2025 - 中期财报

Company Information Board of Directors and Committees This section details the composition of the Board of Directors and its Audit, Nomination, Remuneration, and Strategic Investment Committees - The Board of Directors includes executive directors such as Mr. Fu Haishu (Chairman), Mr. Song Jianliang (CEO), and Mr. Wang Ying, as well as independent non-executive directors like Mr. Cao Dequan, Mr. Liu Teng, and Ms. Yang Xiaofen[5] - Mr. Liu Teng chairs the Audit Committee, Mr. Fu Haishu chairs the Nomination and Strategic Investment Committees, and Mr. Cao Dequan chairs the Remuneration Committee[5] Registered Office and Principal Place of Business The company's registered office is in the Cayman Islands, with its headquarters and main China operations in Hangzhou, and its principal Hong Kong office in Tsuen Wan - The company's registered office is in the Cayman Islands, with its headquarters and principal place of business in China located at Civil Aviation Building, No. 290 Zhongshan North Road, Gongshu District, Hangzhou[5] - The principal place of business in Hong Kong is located at Workshop A2, 29/F, TML Tower, 3 Hoi Shing Road, Tsuen Wan[5] Other Corporate Information This section provides information on the company's auditor, legal counsel, share registrar, principal bankers, stock code, investor relations email, and website - The auditor is Ernst & Young and the Hong Kong legal counsel is Tian Yuan Law Firm[5][6] - The Hong Kong share registrar is Tricor Investor Services Limited[7] - The company's stock code is 2135, investor relations email is investor.relationship@raily.com, and company website is **http://www.raily.com**[7](index=7&type=chunk) Management Discussion and Analysis Business Review Raily Medical Aesthetic, a leading medical aesthetic service provider in China's Yangtze River Delta, primarily offers aesthetic surgery, minimally invasive aesthetic, and dermatology services, also engaging in management consulting and device sales/R&D. During the reporting period, revenue decreased by 28.0% to RMB 84.6 million and loss expanded to RMB 9.5 million due to market slowdown and increased competition. Active customer numbers declined by 23.7%, but average spending per customer rose by 18.3% - The Group's main businesses include aesthetic surgery, minimally invasive aesthetic services, and dermatology services, alongside medical aesthetic management consulting and device product sales, with a strategic focus on R&D and production of medical aesthetic devices, covering upstream, midstream, and downstream segments of the industry[8] 2025 H1 Key Financial and Operating Data | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 84.6 | 117.5 | (28.0) | | Loss | 9.5 | 3.0 | 216.7 | | Loss attributable to owners of the parent | 7.6 | 1.6 | 375.0 | | Active medical aesthetic customers (number) | 24,200 | 31,700 | (23.7) | | New customers (number) | 8,700 | 12,100 | (28.1) | | Repeat customers (number) | 15,500 | 19,600 | (20.9) | | Average spending per customer (RMB) | 3,100 | 2,621 | 18.3 | Development Plans and Strategic Layout The company is actively pursuing five key development plans and strategic layouts to address market challenges and strengthen its leading position, including enhancing non-surgical service capacity, optimizing cost and personnel structure, diversifying sales channels, building an advanced R&D platform for medical aesthetic devices, and expanding brand influence and corporate scale - Enhance non-surgical service capacity: Introduce the latest medical aesthetic technologies and equipment, increase investment in minimally invasive aesthetic and dermatology service departments, strengthen non-surgical service capabilities, and improve customer stickiness[11] - Control costs and optimize personnel structure: Regularly review costs and expenses, rationally plan procurement, optimize human resource allocation, and establish training programs and performance evaluation systems[13] - Diversify sales channels: Utilize internet platforms, social media, and third-party platforms for precise marketing, strengthen cooperation with suppliers, distributors, and agents, and establish partnerships with industry associations[14] - Build an advanced R&D and manufacturing platform for medical aesthetic devices: Suzhou Ruiquan Biomedical Technology Co., Ltd., a subsidiary, is dedicated to developing and producing dermal injectable products, expected to commence production in 2028, and actively applying for Class III medical device registration licenses[15] - Expand brand influence and corporate scale: Improve product and service quality, increase brand exposure, and flexibly adjust M&A strategies based on economic conditions, considering acquisitions of suitable medical aesthetic institutions or pharmaceutical and device operating companies[16] Financial Review During the reporting period, the company's total revenue decreased by 28.0% to RMB 84.6 million, primarily due to a 72.8% decline in medical aesthetic device product sales. Gross profit fell by 39.9% to RMB 29.1 million, with the gross profit margin dropping to 34.4%. While sales costs, selling and distribution expenses, administrative expenses, and other expenses all decreased, the comprehensive loss still expanded to RMB 9.5 million 2025 H1 Revenue by Service Segment | Service Segment | 2025 (RMB thousand) | % of Total Revenue | 2024 (RMB thousand) | % of Total Revenue | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Medical Aesthetic Services | 74,937 | 88.6 | 83,026 | 70.7 | (9.7) | | Aesthetic Surgery Services | 2,741 | 3.2 | 2,586 | 2.2 | 6.0 | | Minimally Invasive Aesthetic Services | 38,404 | 45.4 | 40,134 | 34.2 | (4.3) | | Dermatology Services | 33,110 | 39.2 | 39,772 | 33.9 | (16.8) | | Others | 682 | 0.8 | 534 | 0.4 | 27.7 | | Medical Aesthetic Device Product Sales | 9,359 | 11.1 | 34,420 | 29.3 | (72.8) | | Medical Aesthetic Management Consulting Services | 302 | 0.3 | 29 | – | 941.4 | | Total | 84,598 | 100.0 | 117,475 | 100.0 | (28.0) | - Total revenue decreased by 28.0% to RMB 84.6 million, primarily due to a 72.8% decline in medical aesthetic device product sales to RMB 9.4 million, and a 9.7% decrease in medical aesthetic service revenue to RMB 74.9 million[19][20] - Cost of sales decreased by 19.6% to RMB 55.5 million, mainly attributable to lower performance in medical aesthetic services and medical aesthetic device product sales[21] 2025 H1 Gross Profit and Gross Profit Margin | Service Segment | 2025 Gross Profit (RMB thousand) | 2025 Gross Profit Margin (%) | 2024 Gross Profit (RMB thousand) | 2024 Gross Profit Margin (%) | Gross Profit Change (%) | Gross Profit Margin Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Medical Aesthetic Services | 22,573 | 30.1 | 24,329 | 29.3 | (7.2) | 0.8 | | Medical Aesthetic Device Product Sales | 6,404 | 68.4 | 24,109 | 70.0 | (73.4) | (1.6) | | Medical Aesthetic Management Consulting Services | 158 | 52.3 | 29 | 100.0 | 444.8 | (47.7) | | Total | 29,135 | 34.4 | 48,467 | 41.3 | (39.9) | (6.9) | - Other income and gains significantly decreased by RMB 8.7 million to RMB 1.3 million, mainly due to a reduction in fair value gains from contingent consideration[27] - Selling and distribution expenses decreased by RMB 3.6 million to RMB 20.1 million, and administrative expenses decreased by RMB 4.4 million to RMB 15.8 million, primarily due to adjustments in online promotion platforms, group personnel integration, and reduced intermediary team service expenses[28][29] - Loss for the period was approximately RMB 9.5 million, and loss attributable to owners of the parent was approximately RMB 7.6 million, both showing an increase compared to the same period last year[33] Liquidity, Financial Resources, and Capital Structure As of June 30, 2025, the company's cash and bank balances were approximately RMB 35.9 million, with net current liabilities of approximately RMB 47.1 million. Total debt was approximately RMB 152.6 million, and the gearing ratio increased to 172.8%. The directors believe working capital is sufficient, with no significant interest rate risks or material contingent liabilities and guarantees 2025 H1 Liquidity and Financial Resources | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (RMB million) | | :--- | :--- | :--- | :--- | | Cash and bank balances and time deposits | 35.9 | 28.9 | 7.0 | | Net current liabilities | (47.1) | (33.2) | (13.9) | | Unutilized bank facilities | 7.0 | 13.0 | (6.0) | | Lease liabilities | 47.3 | 35.6 | 11.7 | | Interest-bearing bank borrowings | 20.0 | 13.0 | 7.0 | | Mortgage loans | 5.7 | 7.8 | (2.1) | | Total debt | 152.6 | 154.4 | (1.8) | | Gearing ratio | 172.8% | 161.7% | 11.1% | | Assets pledged | 1.5 | 1.5 | 0 | | Capital commitments | Nil | Nil | 0 | - The company adopts a prudent approach to treasury policy, mitigating credit risk through continuous credit assessment and closely monitoring liquidity to meet funding needs[41] - The Group has no significant interest rate risk as all borrowings are at fixed rates[45] Exchange Rate Fluctuation Risk The company faces exchange rate fluctuation risk between HKD and RMB due to HKD-denominated financial assets, currently without a foreign currency hedging policy, but management will monitor and consider measures to mitigate risk - The Group may be exposed to exchange rate fluctuation risk between HKD and RMB due to certain HKD-denominated financial assets held with licensed banks[46] - The Group currently has no foreign currency hedging policy, but management will closely monitor foreign exchange risk and consider proactive yet prudent measures to minimize related risks when necessary[46] Future Plans for Material Investments or Capital Assets As of June 30, 2025, the company has no other material investment or capital asset acquisition plans beyond those disclosed, and may continue to focus on medical aesthetic device product sales and consider further investments in related businesses - As of June 30, 2025, the Group had no plans for material investments or acquisitions of capital assets, other than those disclosed in this report and the prospectus[47] - Subsequently, the Group may continue to focus on medical aesthetic device product sales and may consider further investments in related businesses[47] Employees and Remuneration Policy As of June 30, 2025, the company had 289 employees in China, with total staff costs of approximately RMB 31.7 million, representing 37.5% of total revenue. The company offers competitive remuneration, medical education opportunities, and a professional work environment, attracting and retaining talent through performance reviews, training programs, and year-end bonuses Employee Count by Function | Function | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Management | 7 | 6 | | Doctors and Medical Staff | 115 | 121 | | Sales, Marketing, Customer Service and Other Business Personnel | 124 | 128 | | Finance and Administrative Personnel | 43 | 35 | | Total | 289 | 290 | 2025 H1 Staff Costs | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | % of Total Revenue | | :--- | :--- | :--- | :--- | | Staff costs | 30.3 | 31.0 | - | | Share option expenses | 1.4 | 3.7 | - | | Total Staff Costs | 31.7 | 34.7 | 37.5 | - The company reviews the performance of doctors and medical staff at least once a year, considering remuneration, bonus determination, and promotion assessments based on performance[50] - Remuneration is determined based on factors such as comparable market wages, job performance, time commitment, and individual responsibilities, with year-end bonuses awarded to high-performing employees[50] Use of Proceeds The company's 2020 listing raised net proceeds of approximately HKD 81.7 million, with HKD 8.4 million for organic development remaining unutilized. The 2024 rights issue raised net proceeds of approximately HKD 19.0 million, with HKD 7.6 million for medical aesthetic device product registration and filing remaining unutilized 2020 Listing Net Proceeds Utilization (as of June 30, 2025) | Purpose | % of Total Amount | Planned Use (HKD million) | Actual Used Proceeds (HKD million) | Unutilized Amount (HKD million) | Expected Time to Fully Utilize Remaining Proceeds | | :--- | :--- | :--- | :--- | :--- | :--- | | Expand medical aesthetic institution network | 71.0% | 58.0 | 49.6 | 8.4 | December 31, 2025 | | - Renovation and expansion of existing institutions | 28.0% | 22.9 | 22.9 | – | - | | - Organic development | 28.0% | 22.9 | 14.5 | 8.4 | December 31, 2025 | | - Strategic acquisitions | 15.0% | 12.2 | 12.2 | – | - | | Purchase new medical aesthetic service equipment and consumables | 11.0% | 9.0 | 9.0 | – | - | | Actively promote brand | 8.0% | 6.5 | 6.5 | – | - | | General working capital | 10.0% | 8.2 | 8.2 | – | - | | Total | 100.0% | 81.7 | 73.3 | 8.4 | - | 2024 Rights Issue Net Proceeds Utilization (as of June 30, 2025) | Purpose | % of Total Amount | Planned Use (HKD million) | Actual Used Proceeds (HKD million) | Unutilized Amount (HKD million) | Expected Time to Fully Utilize Remaining Proceeds | | :--- | :--- | :--- | :--- | :--- | :--- | | Purchase equipment and raw materials required to start production process | 50.0% | 9.5 | 9.5 | – | - | | Registration and filing of medical aesthetic device products with NMPA | 40.0% | 7.6 | – | 7.6 | March 31, 2026 | | General working capital | 10.0% | 1.9 | 1.9 | – | - | | Total | 100.0% | 19.0 | 11.4 | 7.6 | - | Outlook China's medical aesthetic industry is rapidly developing with an expanding market size and increasingly stringent government regulation, driving the industry towards standardization, professionalization, personalization, and technological advancement. Non-invasive treatments and personalized customization are key highlights, with more new materials expected to be approved for market. Despite challenges and fierce competition, the overall industry trend remains positive - China's medical aesthetic industry, though nascent, is rapidly developing with an expanding market size, and increasing government regulation is driving the industry towards standardization, professionalization, personalization, and technological advancement[56] - Non-invasive treatments and personalized customization are two core highlights in the medical aesthetic field, with more new materials expected to be approved for market, offering richer and safer options[56] - Despite numerous challenges and market competition, the overall development trend of the industry remains positive and promising for the future[56] Corporate Governance and Other Information Corporate Governance Practices The company upholds strong corporate governance principles, having adopted the Corporate Governance Code provisions in Appendix C1 of the Listing Rules, and has complied with all applicable code provisions during the reporting period - The company adheres to sound corporate governance principles, emphasizing transparency, accountability, and independence to achieve robust management and enhance shareholder value[57] - The company has adopted the code provisions of the Corporate Governance Code set out in Appendix C1 to the Listing Rules and has complied with all applicable code provisions during the reporting period[57] Directors' and Chief Executive's Interests in Shares As of June 30, 2025, Executive Director Mr. Fu Haishu holds 53.10% of the company's shares through his wholly-owned Ruid Consulting Management Co., Ltd., making him a substantial shareholder. Other than this, no other discloseable interests or short positions were held by directors and chief executives Directors' and Chief Executive's Long Positions in Shares of the Company (as of June 30, 2025) | Name | Capacity/Nature of Interest | Number of Shares Held | Approximate % of Interest in the Company | | :--- | :--- | :--- | :--- | | Mr. Fu Haishu | Interest in controlled corporation | 295,808,923 | 53.10% | - Mr. Fu Haishu's interest is held through Ruid Consulting Management Co., Ltd., which he wholly owns[58] - Save as disclosed above, none of the directors or chief executive of the company or their respective associates had any interests or short positions in the shares, underlying shares, and debentures of the company or any of its associated corporations as recorded in the register required to be kept under Section 352 of the Securities and Futures Ordinance, or as otherwise notified to the company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO[59] Substantial Shareholders' Interests in Shares As of June 30, 2025, Ruid Consulting Management Co., Ltd. holds 53.10% of the company's shares, with its spouse Ms. Jin Chunmiao also deemed to have the same interest. Youxin Management Co., Ltd. holds 8.28% of the shares. No other substantial shareholder interests require disclosure Substantial Shareholders' Long Positions in Shares of the Company (as of June 30, 2025) | Name/Company Name | Capacity/Nature of Interest | Number of Shares Held | Approximate % of Interest in the Company | | :--- | :--- | :--- | :--- | | Ruid Consulting Management Co., Ltd. | Beneficial owner | 295,808,923 | 53.10% | | Jin Chunmiao | Spouse interest | 295,808,923 | 53.10% | | Youxin Management Co., Ltd. | Beneficial owner | 46,133,008 | 8.28% | - Ms. Jin Chunmiao is the spouse of Mr. Fu Haishu and is therefore deemed to be interested in the shares which Mr. Fu Haishu is taken or deemed to be interested in under the SFO[64] Directors' Securities Transactions The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as its code of conduct for directors' securities transactions, and all directors have confirmed compliance with the code during the reporting period - The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as its code of conduct for directors' securities transactions[62] - All directors have confirmed that they have complied with the required standards set out in the Model Code during the reporting period[62] Directors' Rights to Acquire Shares or Debentures Except as disclosed, neither the company, its holding company, subsidiaries, nor fellow subsidiaries entered into any arrangements during the reporting period that would enable directors, chief executives, or their spouses or minor children to acquire benefits by subscribing for shares or debentures of the company or any other body corporate - Save as disclosed in this interim report and the prospectus, at no time during the reporting period was the company, any of its holding companies, subsidiaries, or fellow subsidiaries a party to any arrangement to enable the directors or chief executive of the company or any of their respective spouses or children under 18 years of age to acquire benefits by means of the acquisition of shares in or debentures of the company or any other body corporate[63] Share Option Scheme The company adopted a share option scheme on December 4, 2020. As of June 30, 2025, 47,276,437 share options remained unexercised, primarily granted to other employees and service providers with varying exercise prices and vesting periods. No new share options were granted during the reporting period - The company's shareholders adopted a share option scheme on December 4, 2020[65] Share Option Scheme Movement Details (as of June 30, 2025) | Grantee Category | Date of Grant | Balance at Jan 1, 2025 | Granted During Period | Exercised During Period | Lapsed During Period | Cancelled During Period | Balance at June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Other Employees | Aug 29, 2022 | 66,214 | – | – | – | – | 66,214 | | Other Employees | Aug 29, 2022 | 66,213 | – | – | – | – | 66,213 | | Other Employees | Aug 29, 2022 | 99,320 | – | – | – | – | 99,320 | | Other Employees | Aug 29, 2022 | 99,320 | – | – | – | – | 99,320 | | Other Employees | Jan 26, 2024 | 11,187,713 | – | – | – | – | 11,187,713 | | Other Employees | Feb 23, 2024 | 10,681,591 | – | – | – | – | 10,681,591 | | Other Employees | Feb 23, 2024 | 230,056 | – | – | – | – | 230,056 | | Service Providers | Aug 29, 2022 | 4,969,202 | – | – | – | – | 4,969,202 | | Service Providers | Aug 29, 2022 | 4,969,202 | – | – | – | – | 4,969,202 | | Service Providers | Aug 29, 2022 | 7,453,803 | – | – | – | – | 7,453,803 | | Service Providers | Aug 29, 2022 | 7,453,803 | – | – | – | – | 7,453,803 | | Total | | 47,276,437 | – | – | – | – | 47,276,437 | - No share options were available for grant under the share option scheme at the beginning and end of the reporting period[65] Purchase, Sale or Redemption of the Company's Listed Securities During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities (including the sale of treasury shares)[66] Interim Dividend During the reporting period, the Board of Directors resolved not to declare any interim dividend - During the reporting period, the Board resolved not to declare any interim dividend (six months ended June 30, 2024: nil)[67] Pre-emptive Rights There are no provisions for pre-emptive rights in the company's articles of association or the laws of the Cayman Islands that would require the company to offer new shares proportionally to existing shareholders - There are no provisions for pre-emptive rights in the company's articles of association or the laws of the Cayman Islands that would oblige the company to offer new shares proportionally to existing shareholders[68] Material Events During the Reporting Period During the reporting period, Suzhou Ruiquan (an indirect non-wholly owned subsidiary) agreed to acquire a property in Zhangjiagang, Suzhou, for RMB 21,437,012, a transaction approved by shareholders, aimed at establishing a medical aesthetic device R&D and manufacturing platform - On March 7, 2025, Suzhou Ruiquan (an indirect non-wholly owned subsidiary of the company) entered into an agreement with Suzhou Maidi Jinggang Technology Co., Ltd. to acquire a property with a gross floor area of approximately 4,660.22 square meters located at Building 7, 101, 201, 301, 401, No. 26 Jinxing Road, Jinfeng Town, Zhangjiagang, Suzhou, Jiangsu Province, China, for RMB 21,437,012[69] - The agreement was approved by the company's shareholders at the annual general meeting held on May 30, 2025, with the consideration funded by the Group's internal resources and external financing[69] Events After the Reporting Period After the reporting period, Hainan Beilifeier introduced an investor with a capital injection of RMB 5,005,000 and underwent capital reduction, decreasing the company's interest in Hainan Beilifeier from 100.00% to 30.00%, constituting a deemed disposal. Additionally, Hangzhou Beilifeier ceased its medical aesthetic service business, shifting strategic focus to medical aesthetic device product sales, involving equity transfer and agreement termination - On July 4, 2025, Hainan Beilifeier introduced an investor with a capital injection of RMB 5,005,000 and underwent a capital reduction of RMB 2,855,000, resulting in the company's interest in Hainan Beilifeier decreasing from 100.00% to 30.00%, constituting a deemed disposal[70] - On August 15, 2025, Hangzhou Beilifeier decided to focus its strategic efforts on the sale of medical aesthetic device products, ceasing its medical aesthetic service business and canceling its medical practice license[71] - Mr. Fu Haishu's entire equity interest in Hangzhou Beilifeier was transferred to Raily Beauty Consulting, and related agreements were terminated71 Changes in Directors' Information Since the publication of the company's 2024 annual report, no changes in directors' information requiring disclosure under Listing Rule 13.51B(1) have occurred - Since the publication of the company's 2024 annual report, no changes in directors' information requiring disclosure under Listing Rule 13.51B(1) have occurred[72] Audit Committee The Audit Committee, comprising three independent non-executive directors: Mr. Liu Teng (Chairman), Mr. Cao Dequan, and Ms. Yang Xiaofen, is responsible for overseeing financial reporting, audit processes, internal controls, and compliance with laws and regulations. The committee has reviewed and approved the Group's unaudited condensed consolidated financial information and interim report for the reporting period - The Audit Committee comprises independent non-executive directors Mr. Liu Teng (Chairman), Mr. Cao Dequan, and Ms. Yang Xiaofen[73] - The Audit Committee is primarily responsible for overseeing the financial reporting process, the audit process, internal control mechanisms, compliance with laws and regulations, the appointment of external auditors, and other duties and functions as assigned by the Board from time to time[73] - The Audit Committee has reviewed and approved the Group's unaudited condensed consolidated financial information for the reporting period and the Group's interim report and interim results announcement for the reporting period before their approval by the Board, with no disagreements on accounting treatments[73] Independent Review Report Introduction Ernst & Young has reviewed the interim financial information of Raily Medical Aesthetic International Holdings Limited and its subsidiaries for the six months ended June 30, 2025, in accordance with the Listing Rules of The Stock Exchange of Hong Kong Limited and International Accounting Standard 34. Directors are responsible for preparing the financial information, and the auditor is responsible for concluding based on the review - Ernst & Young has reviewed the interim financial information of Raily Medical Aesthetic International Holdings Limited and its subsidiaries for the six months ended June 30, 2025[77] - The interim financial information, prepared in compliance with relevant provisions of the Listing Rules and International Accounting Standard 34, is the responsibility of the company's directors for preparation and presentation[77] Scope of Review The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410 issued by the Hong Kong Institute of Certified Public Accountants, primarily involving inquiries and analytical procedures. The scope of a review is less than an audit, thus it does not guarantee awareness of all material matters, and no audit opinion is expressed - The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410 issued by the Hong Kong Institute of Certified Public Accountants, primarily involving inquiries of persons responsible for financial and accounting matters, and applying analytical and other review procedures[78] - The scope of a review is substantially less than that of an audit conducted in accordance with Hong Kong Standards on Auditing, and consequently, it does not assure that all material matters that might be identified in an audit will be known, thus no audit opinion is expressed[78] Conclusion Based on the review, the auditor found no matters that would lead them to believe the interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34 - Based on our review, we have not found any matters that lead us to believe that the interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34[79] Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Profit or Loss and Comprehensive Income Overview For the six months ended June 30, 2025, the company's revenue was RMB 84,598 thousand, a 28.0% decrease from RMB 117,475 thousand in the prior year. Cost of sales was RMB 55,463 thousand, resulting in a gross profit of RMB 29,135 thousand. Loss for the period expanded to RMB 9,462 thousand, with loss attributable to owners of the parent at RMB 7,570 thousand, and basic and diluted loss per share at RMB (1.36) cents Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (for the six months ended June 30, 2025) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 84,598 | 117,475 | | Cost of sales | (55,463) | (69,008) | | Gross profit | 29,135 | 48,467 | | Other income and gains | 1,302 | 9,950 | | Selling and distribution expenses | (20,115) | (23,687) | | Administrative expenses | (15,788) | (20,207) | | Research and development expenses | (807) | (446) | | Other expenses | (550) | (14,717) | | Finance costs | (1,398) | (1,577) | | Loss before tax | (8,284) | (2,257) | | Income tax expense | (1,178) | (740) | | Loss for the period | (9,462) | (2,997) | | Attributable to owners of the parent | (7,570) | (1,617) | | Non-controlling interests | (1,892) | (1,380) | | Basic and diluted loss per share (RMB) | (1.36) cents | (0.32) cents | Interim Condensed Consolidated Statement of Financial Position Assets and Liabilities Overview As of June 30, 2025, the company's total assets were RMB 240,890 thousand, a slight decrease from RMB 249,923 thousand on December 31, 2024. Net current liabilities increased to RMB 47,136 thousand from RMB 33,154 thousand. Total liabilities were RMB 152,573 thousand, and net assets were RMB 88,317 thousand Interim Condensed Consolidated Statement of Financial Position (as of June 30, 2025) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Non-current assets | | | | Property, plant and equipment | 41,514 | 45,951 | | Right-of-use assets | 42,325 | 32,365 | | Goodwill | 6,150 | 6,150 | | Other intangible assets | 42,198 | 43,906 | | Total non-current assets | 157,746 | 159,489 | | Current assets | | | | Inventories and supplies | 8,643 | 14,370 | | Trade receivables | 716 | 1,538 | | Cash and cash equivalents | 35,730 | 28,870 | | Total current assets | 83,144 | 90,434 | | Current liabilities | | | | Trade payables | 7,703 | 7,779 | | Other payables and accrued expenses | 25,435 | 35,515 | | Contract liabilities | 35,091 | 38,829 | | Interest-bearing bank and other borrowings | 24,451 | 17,282 | | Lease liabilities | 30,039 | 12,225 | | Total current liabilities | 130,280 | 123,588 | | Net current liabilities | (47,136) | (33,154) | | Non-current liabilities | | | | Lease liabilities | 17,271 | 23,389 | | Total non-current liabilities | 22,293 | 30,817 | | Net assets | 88,317 | 95,518 | | Total equity | 88,317 | 95,518 | Interim Condensed Consolidated Statement of Changes in Equity Equity Changes Overview As of June 30, 2025, total equity attributable to owners of the parent amounted to RMB 97,974 thousand, a decrease from RMB 104,134 thousand at the beginning of the period, primarily due to a loss for the period of RMB 7,570 thousand. Non-controlling interests were RMB (9,657) thousand. Equity-settled share option arrangements increased by RMB 1,410 thousand Interim Condensed Consolidated Statement of Changes in Equity (for the six months ended June 30, 2025) | Indicator | Share Capital (RMB thousand) | Capital Reserve (RMB thousand) | Share Option Reserve (RMB thousand) | Statutory Surplus Reserve (RMB thousand) | Accumulated Losses (RMB thousand) | Total Attributable to Owners of the Parent (RMB thousand) | Non-controlling Interests (RMB thousand) | Total Equity (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | At January 1, 2025 | 185,748 | – | 17,284 | 9,351 | (108,249) | 104,134 | (8,616) | 95,518 | | Loss for the period | – | – | – | – | (7,570) | (7,570) | (1,892) | (9,462) | | Capital injection from non-controlling shareholder of a subsidiary | – | – | – | – | – | – | 851 | 851 | | Equity-settled share option arrangements | – | – | 1,410 | – | – | 1,410 | – | 1,410 | | At June 30, 2025 | 185,748 | – | 18,694 | 9,351 | (115,819) | 97,974 | (9,657) | 88,317 | Interim Condensed Consolidated Statement of Cash Flows Cash Flow Overview For the six months ended June 30, 2025, net cash flow from operating activities was RMB 6,327 thousand, an increase from RMB 2,043 thousand in the prior year. Net cash flow used in investing activities was RMB 1,225 thousand, and net cash flow from financing activities was RMB 1,769 thousand. Cash and cash equivalents at period-end totaled RMB 35,730 thousand, an increase of RMB 6,871 thousand from the beginning of the period Interim Condensed Consolidated Statement of Cash Flows (for the six months ended June 30, 2025) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net cash flows from operating activities | 6,327 | 2,043 | | Net cash flows used in investing activities | (1,225) | (3,307) | | Net cash flows from financing activities | 1,769 | 19,684 | | Net increase in cash and cash equivalents | 6,871 | 18,420 | | Cash and cash equivalents at beginning of period | 28,870 | 15,930 | | Net effect of exchange rate changes | (11) | 126 | | Cash and cash equivalents at end of period | 35,730 | 34,476 | Notes to the Interim Condensed Consolidated Financial Information Basis of Preparation The interim condensed consolidated financial information is prepared in accordance with International Accounting Standard 34, excluding all annual financial statement disclosures, and should be read in conjunction with the annual consolidated financial statements. Despite net current liabilities of RMB 47,136 thousand, directors deem preparation on a going concern basis appropriate - The interim condensed consolidated financial information for the six months ended June 30, 2025, has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting"[87] - The Group had net current liabilities of RMB 47,136,000 as of June 30, 2025, but the directors consider it appropriate to prepare the financial statements on a going concern basis, taking into account unutilized bank facilities and expected cash flows from operating activities[87] Changes in Accounting Policies and Disclosures The accounting policies used to prepare this interim condensed consolidated financial information are consistent with those adopted for the annual consolidated financial statements for the year ended December 31, 2024, except for the initial adoption of revised International Financial Reporting Standards, with the amendments to IAS 21 having no impact on the Group - The accounting policies used to prepare this interim condensed consolidated financial information are consistent with those adopted for the Group's annual consolidated financial statements for the year ended December 31, 2024, except for the initial adoption of revised International Financial Reporting Standards for the current period's financial information[88] - The amendments to IAS 21 specify how an entity should assess whether a currency is exchangeable and how to estimate the spot exchange rate when exchangeability is lacking. As the currencies used for the Group's transactions and the functional currencies used by Group entities for conversion to the Group's presentation currency are exchangeable, these amendments have no impact on the interim condensed consolidated financial information[89] Operating Segment Information The Group's operating segments include medical aesthetic services, medical aesthetic management consulting services, and medical aesthetic device products. For the six months ended June 30, 2025, medical aesthetic services generated RMB 74,937 thousand in revenue, and medical aesthetic device products generated RMB 9,359 thousand. The medical aesthetic services segment reported a loss of RMB 1,787 thousand, while the medical aesthetic device products segment reported a profit of RMB 3,821 thousand. Total assets were RMB 240,890 thousand, and total liabilities were RMB 152,573 thousand Operating Segment Revenue (for the six months ended June 30, 2025) | Segment | Sales to External Customers (RMB thousand) | Inter-segment Sales (RMB thousand) | Total Segment Revenue (RMB thousand) | | :--- | :--- | :--- | :--- | | Medical Aesthetic Services | 74,937 | – | 74,937 | | Consulting Services | 302 | 985 | 1,287 | | Device Products | 9,359 | 3,785 | 13,144 | | Total | 84,598 | 4,770 | 89,368 | Operating Segment Results (for the six months ended June 30, 2025) | Segment | Segment Results (RMB thousand) | | :--- | :--- | | Medical Aesthetic Services | (1,787) | | Consulting Services | (1,518) | | Device Products | 3,821 | | Total | 516 | Operating Segment Assets and Liabilities (as of June 30, 2025) | Indicator | Medical Aesthetic Services (RMB thousand) | Consulting Services (RMB thousand) | Device Products (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Segment assets | 65,214 | 6,284 | 72,033 | 143,531 | | Corporate and other unallocated assets | | | | 97,359 | | Total assets | | | | 240,890 | | Segment liabilities | 87,247 | 934 | 1,475 | 89,656 | | Corporate and other unallocated liabilities | | | | 62,917 | | Total liabilities | | | | 152,573 | Revenue, Other Income and Gains For the six months ended June 30, 2025, total revenue from contracts with customers was RMB 84,598 thousand, primarily from medical aesthetic services (RMB 74,937 thousand) and medical aesthetic device products (RMB 9,359 thousand). Revenue mainly originated from mainland China, with service revenue recognized either at a point in time or over time. Total other income and gains were RMB 1,302 thousand, a significant decrease from the prior year, mainly due to reduced fair value gains from contingent consideration Customer Contract Revenue Analysis (for the six months ended June 30, 2025) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Medical Aesthetic Services | 74,937 | 83,026 | | Medical Aesthetic Device Products | 9,359 | 34,420 | | Consulting Services | 302 | 29 | | Total | 84,598 | 117,475 | Customer Contract Revenue Disaggregation (for the six months ended June 30, 2025) | Type of Goods or Services | Sale of Products (RMB thousand) | Services (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | | Medical Aesthetic Services | – | 74,937 | 74,937 | | Consulting Services | – | 302 | 302 | | Device Products | 9,359 | – | 9,359 | | Total | 9,359 | 75,239 | 84,598 | Other Income and Gains Analysis (for the six months ended June 30, 2025) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Compensation income | 350 | – | | Interest income | 198 | 171 | | Investment income | 67 | 97 | | Government grants | 60 | 77 | | Total other income | 809 | 421 | | Gain on disposal of right-of-use assets | 285 | – | | Gain on disposal of property, plant and equipment | 162 | – | | Sublease income | 46 | 490 | | Fair value gain on contingent consideration | – | 9,039 | | Total gains | 493 | 9,529 | | Total other income and gains | 1,302 | 9,950 | Loss Before Tax For the six months ended June 30, 2025, the Group's loss before tax was RMB 8,284 thousand, primarily comprising costs of supplies consumed, employee benefit expenses, depreciation, and amortization. Compared to the prior year, impairment provision for intangible assets significantly decreased, but share option expenses and promotion and marketing expenses remained significant components Loss Before Tax Components (for the six months ended June 30, 2025) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of supplies consumed | 32,622 | 36,639 | | Cost of inventories sold | 2,955 | 10,311 | | Amortization of intangible assets | 1,709 | 3,036 | | Depreciation of property, plant and equipment | 5,506 | 5,848 | | Depreciation of right-of-use assets | 4,604 | 5,468 | | Employee benefit expenses (excluding directors' and chief executive's emoluments) | 29,698 | 33,649 | | Equity-settled share option expenses | 1,291 | 3,427 | | Impairment of intangible assets | – | 13,279 | | Promotion and marketing expenses | 5,112 | 6,011 | | Professional fees | 1,766 | 2,005 | | Fair value change of contingent consideration | – | (9,039) | Income Tax The Group is subject to income tax on profits in the jurisdictions where its member companies operate. Mainland China subsidiaries are taxed at a statutory rate of 25%, with some small-profit enterprises enjoying a 5% preferential rate. Hong Kong subsidiaries pay profits tax at 16.5%. As of June 30, 2025, total income tax expense was RMB 1,178 thousand - The Group is subject to income tax on profits generated or earned in the jurisdictions where its member companies are located and operate, on an entity basis[99] - Provision for current income tax in mainland China is calculated based on the statutory tax rate of 25% of the Group's assessable profits, with some small-profit enterprises enjoying a 5% preferential tax rate[99] - Subsidiaries incorporated in Hong Kong are subject to Hong Kong profits tax at a rate of 16.5% on any estimated assessable profits arising in Hong Kong[99] Income Tax Expense (for the six months ended June 30, 2025) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current tax - expense for the year | – | 3,760 | | Current tax - overprovision in prior years | (210) | – | | Current tax - withholding tax | 119 | 375 | | Deferred tax | 1,269 | (3,395) | | Total tax expense for the period | 1,178 | 740 | Dividends For the period ended June 30, 2025, the company neither paid nor declared any dividends - For the period ended June 30, 2025, the company neither paid nor declared any dividends[101] Loss Per Share Attributable to Ordinary Equity Holders of the Parent As of June 30, 2025, basic and diluted loss per share attributable to ordinary equity holders of the parent was RMB (1.36) cents, based on a loss for the period of RMB 7,570 thousand and a weighted average of 557,077,333 ordinary shares outstanding. Share options had an anti-dilutive effect on basic loss per share and were thus ignored in calculating diluted loss Loss Per Share Calculation (for the six months ended June 30, 2025) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Loss attributable to ordinary equity holders of the parent | (7,570) | (1,617) | | Weighted average number of ordinary shares in issue for basic loss per share calculation (shares) | 557,077,333 | 508,330,653 | | Basic and diluted loss per share (RMB) | (1.36) cents | (0.32) cents | - As the diluted loss per share amount decreased when considering share options, the share options had an anti-dilutive effect on the basic loss per share for the period ended June 30, 2025, and were therefore ignored in calculating diluted loss per share[103] Property, Plant and Equipment For the six months ended June 30, 2025, the Group acquired assets at a cost of RMB 1,423 thousand and disposed of assets with a net book value of RMB 354 thousand, resulting in a net loss on disposal of RMB 86 thousand. No impairment losses were recognized during the period - For the six months ended June 30, 2025, the Group acquired assets at a cost of RMB 1,423,000[104] - For the six months ended June 30, 2025, the Group disposed of assets with a net book value of RMB 354,000, resulting in a net loss on disposal of RMB 86,000[104] - For the six months ended June 30, 2025, no impairment losses were recognized for any property, plant and equipment[105] Right-of-Use Assets For the six months ended June 30, 2025, the Group acquired right-of-use assets at a cost of RMB 21,536 thousand, primarily involving the purchase of a property from Suzhou Maidi Jinggang Technology Co., Ltd. and the signing of a six-month lease agreement - For the six months ended June 30, 2025, the Group acquired right-of-use assets at a cost of RMB 21,536,000[107] - The Group has entered into an agreement to purchase a property from Suzhou Maidi Jinggang Technology Co., Ltd. for a consideration of RMB 21,437,000, and a six-month lease agreement, including a right to acquire, was signed on June 23, 2025[107] Trade Receivables As of June 30, 2025, total trade receivables amounted to RMB 716 thousand, with the majority (RMB 485 thousand) due within 3 months, a decrease from RMB 1,538 thousand on December 31, 2024 Trade Receivables Ageing Analysis (as of June 30, 2025) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 3 months | 485 | 1,537 | | 7 to 12 months | 231 | 1 | | Total | 716 | 1,538 | Prepayments, Other Receivables and Other Assets As of June 30, 2025, total prepayments, other receivables, and other assets amounted to RMB 52,154 thousand, with a current portion of RMB 37,906 thousand and a non-current portion of RMB 14,248 thousand. These primarily include prepayments for inventories and supplies, deposits, and refundable earnest money Prepayments, Other Receivables and Other Assets (as of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Prepayments for inventories and supplies | 14,579 | 11,532 | | Deposits | 18,280 | 18,482 | | Refundable earnest money | 11,500 | 16,000 | | Other receivables | 6,238 | 16,410 | | Total | 52,154 | 64,141 | | Current | 37,906 | 45,656 | | Non-current | 14,248 | 18,485 | Trade Payables As of June 30, 2025, total trade payables amounted to RMB 7,703 thousand, with the majority (RMB 6,415 thousand) due within 90 days, a slight decrease compared to RMB 7,779 thousand on December 31, 2024 Trade Payables Ageing Analysis (as of June 30, 2025) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 90 days | 6,415 | 7,062 | | 91 to 180 days | 798 | 636 | | 181 to 365 days | 459 | 58 | | Over 365 days | 31 | 23 | | Total | 7,703 | 7,779 | Other Payables and Accrued Expenses As of June 30, 2025, total other payables and accrued expenses amounted to RMB 29,255 thousand, with a current portion of RMB 25,435 thousand and a non-current portion of RMB 3,820 thousand. These primarily include other payables, salaries payable, and advances received Other Payables and Accrued Expenses (as of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Other payables | 10,872 | 19,803 | | Salaries payable | 9,073 | 9,290 | | Advances received | 5,197 | 4,357 | | Deferred income | 3,500 | 3,500 | | Tax liabilities (excluding income tax) | 613 | 2,522 | | Total | 29,255 | 39,472 | | Current | 25,435 | 35,515 | | Non-current | 3,820 | 3,957 | Related Party Transactions As of June 30, 2025, outstanding balances payable to independent directors Mr. Cao Dequan, Mr. Liu Teng, and Ms. Yang Xiaofen totaled RMB 249 thousand. Total remuneration for key management personnel was RMB 975 thousand, including salaries, allowances, pension plan contributions, and share option expenses Outstanding Balances with Related Parties (as of June 30, 2025) | Related Party | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Mr. Cao Dequan | 83 | – | | Mr. Liu Teng | 83 | – | | Ms. Yang Xiaofen | 83 | – | | Total | 249 | – | Key Management Personnel Remuneration (for the six months ended June 30, 2025) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Salaries, allowances and benefits in kind | 753 | 710 | | Pension scheme contributions | 103 | 100 | | Equity-settled share option expenses | 119 | 281 | | Total remuneration paid to key management personnel | 975 | 1,091 | Fair Value and Fair Value Hierarchy of Financial Instruments The Group's finance department is responsible for determining policies and procedures for fair value measurement of financial instruments, subject to review and approval by the Chief Financial Officer. The company invests in unlisted investments, such as wealth management products issued by mainland Chinese banks, whose fair values are estimated using a discounted cash flow valuation model - The Group's finance department, led by the finance manager, is responsible for determining policies and procedures for fair value measurement of financial instruments and reports directly to the Chief Financial Officer and the Audit Committee[114] - The Group invests in unlisted investments, specifically wealth management products issued by mainland Chinese banks, and the fair value of these unlisted investments has been estimated using a discounted cash flow valuation model based on market interest rates for instruments with similar terms and risks[114] Events After the Reporting Period (Notes) After the reporting period, Hainan Beilifeier introduced an investor with a capital injection of RMB 5,005,000 and underwent capital reduction, decreasing the company's interest in Hainan Beilifeier from 100.00% to 30.00%, constituting a deemed disposal. Additionally, Hangzhou Beilifeier shifted its strategic focus to medical aesthetic device product sales, terminated its medical aesthetic service business, and underwent equity transfer and agreement termination - On July 4, 2025, Hainan Beilifeier introduced an investor with a capital injection of RMB 5,005,000 and underwent a capital reduction of RMB 2,855,000, resulting in the company's interest in Hainan Beilifeier decreasing from 100.00% to 30.00%, constituting a deemed disposal of equity interest in Hainan Beilifeier[115] - As Hangzhou Beilifeier decided to focus its strategic efforts on the sale of medical aesthetic device products, ceasing its medical aesthetic service business and canceling its medical practice license, the foreign ownership restrictions for providing medical aesthetic services no longer apply[116] - On August 15, 2025, Hangzhou Beilifeier, Hangzhou Raily Beauty Consulting Service Co., Ltd., and Mr. Fu Haishu entered into an agreement to transfer all of Mr. Fu Haishu's equity interest in Hangzhou Beilifeier to Raily Beauty Consulting and terminate related agreements[116]