Yonghe Medical Group Co., Ltd. provided earnings guidance for the year ended 31 December 2022. For the year, the company expects to record a revenue of approximately RMB 1,271.5 million to RMB 1,554.1 million, as compared with the revenue of RMB 2,168.6 million for the year ended 31 December 2021. And the Group expects to incur a net loss of not more than RMB 90.0 million as compared with the net profit of RMB 120.2 million for the year ended 31 December 2021.

Based on the information currently available, the Board considers that such expected decrease above is primarily attributable to, among other things, the following reasons: due to the resurgence of the COVID-19 pandemic in mainland China in 2022, the total number of visits to the Group's stores nationwide decreased by approximately 40% during the Year, and the operation of 59 stores of the Group was suspended/restricted to comply with the pandemic prevention measures implemented by government authorities in some cities, with an average closing time of 38 days. However, those stores still incurred fixed operating costs such as rental and employees' remuneration; and despite the impact of the COVID-19 pandemic, the Group maintains its expansion plan in view of the positive outlook of the hair-related healthcare service market in China, and thus incurred additional expansion-related expenses. By the Year end, the Group newly opened 18 Yonghe/Fa Zhi Chu/Svenson stores.

The Group believes that the establishment of these new stores will contribute to the Group's business performance and strategic development in the future. The impact of the COVID-19 pandemic on the Group's business has been diminishing as the Chinese government optimises its prevention and control policies and measures in response to the prevailing situation. With the changes in the industry landscape under the impact of the COVID-19 pandemic, the operation of the Group' s comprehensive hospitals and a batch of newly-built medical institutions, and the full implementation of internal reforms such as the industry-leading physician consultation system, the management of the Company has full confidence in the business fundamentals and development prospects of the Group.