Meihao Medical (1947) H2 2023 earnings summary

Executive summary

• FY2023 revenue fell 42.3% YoY to RMB73.5m; results swung to a RMB13.6m net loss attributable to owners from RMB28.5m profit, amid dental implant pricing controls and fewer visits.

• Operations covered five private dental hospitals in Wenzhou; active patients fell 20.9% to 50,324.

Financial highlights

• Gross profit declined 58.2% to RMB32.7m; gross margin fell to 44.4% from 61.4%, as revenue fell faster than costs.

• Loss before tax was RMB7.2m versus FY2022 profit before tax of RMB40.2m; loss per share was RMB2.27 cents versus EPS of RMB6.22 cents.

• Selling expenses rose 13.7% to RMB20.7m; administrative expenses fell 15.2% to RMB22.9m, partly reflecting no repeat of FY2022 listing expenses.

• Income tax expense decreased to RMB6.4m from RMB11.6m; loss attributable to owners was RMB13.6m.

Outlook and guidance

• Longer-term demand is expected to benefit from more affordable dental services, rising oral-health awareness, an aging population and increased prevalence of oral disease.

• Plans include expanding the Wenzhou network, exploring acquisitions in Zhejiang and nearby provinces, and developing children's dental services and upstream/downstream partnerships.

• Operational priorities include upgrading hospital management software, improving centralized operations and expanding training and recruitment of dental professionals.