Meihao Medical (1947) H1 2024 earnings summary

Executive summary

• H1 revenue fell 3.4% YoY to RMB33.797m; gross profit declined 20.6% to RMB12.348m and loss attributable to owners widened to RMB15.074m, amid lower margins and higher costs.

• Six hospitals and one clinic operated in Wenzhou; active patients declined 3.6% YoY to 29,259, while implant dentistry revenue grew 10.3%.

Financial highlights

• Revenue was RMB33.797m versus RMB34.985m in H1 2023; cost of sales rose 9.7% to RMB21.449m.

• Gross margin fell to 36.5% from 44.2%; selling expenses rose 14.3% to RMB11.217m and administrative expenses rose 73.3% to RMB17.454m, including share-based compensation and senior hires.

• Loss before tax was RMB14.432m; net loss was RMB15.136m, including RMB15.074m attributable to owners. Basic and diluted loss per share was RMB2.51 cents.

• Other income and gains rose to RMB2.9m, primarily from higher bank interest income; income tax was an expense of RMB0.704m versus a credit of RMB0.631m in H1 2023.

Outlook and guidance

• Plans include promotional investment, brand positioning, service-system and software upgrades, centralized management, and expanded pediatric dental services.

• Expansion plans include a specialized pediatric hospital, a dentistry training centre, broader Wenzhou coverage, and potential acquisitions in Zhejiang and nearby provinces.

• A Dubai entity was incorporated to explore overseas operations, with implementation planned in stages; strategy also targets upstream medical devices and downstream medical aesthetics.