(August 27, 2024, Hong Kong) Beauty Farm Medical and Health Industry Inc. (“Beauty Farm” or the “Company”) (02373.HK), a leading beauty and health services provider in China, together with its subsidiaries, the “Group,” is pleased to announce the Group’s audited interim results for the six months ended June 30, 2024 (the "Reporting Period").

Performance Highlights:

• Revenue was RMB1.14 billion, marking a 9.7% YoY increase.
• Gross profit margin improved to 47.0%, up 0.9 percentage points YoY.
• Net profit was RMB126 million，a 4.1% rise YoY.
• Adjusted net profit was RMB132 million.
• Fully integrated Naturade , adding 150 direct and franchised stores.
• Upgraded “dual beauty + dual wellness” model unlocking substantial growth opportunities.
• Enhanced M&A strategy as the Group’s primary growth approach.

Beauty Farm's extensive network and deep roots across major cities in China continue to command a valuable, high-end, and growing customer base that exceeded the industry growth rate in the first half of 2024. Amid a complex and evolving market landscape, Beauty Farm continued to grow its market share while expanding revenues across its service offerings, leading to improved margins and profits. During the period, the Company upgraded its business model to "dual-beauty + dual-wellness" following the strategic acquisition of Naturade in March, creating significant opportunities to attract new customers in wellness segment.

In the first half of 2024, client visits to Beauty Farm's direct stores increased by 11.6% year-over-year, reaching 684,659, and the number of active members served at direct stores grew by 10.3% year-over-year to 81,531. Membership spending and store visits remained robust, with each active member averaging 6.4 visits and spending an average of RMB12,608 at direct stores, highlighting ongoing high levels of customer loyalty and robust spending power among Beauty Farm’s clientele. Throughout the period, Beauty Farm strengthened its cornerstone beauty and wellness business and propelled external growth through strategic acquisitions. As of June 30, 2024, the Company expanded its nationwide store network to 409 stores. Beauty Farm's recent acquisition and integration of Naturade will further expand the Company's footprint, adding 150 direct and franchised stores in the second half of the year.

Solid Growth in Cornerstone Beauty and Wellness Services, 50% Revenue Surge in Subhealth Medical Services

In the first half of 2024, revenues from Beauty Farm's cornerstone beauty and wellness services increased by 13.6% year-over-year to RMB622 million, propelled by increased single-store memberships and stronger private domain traffic from digital operations. Through years of steady growth, Beauty Farm has meticulously strengthened its brand and appeal among China’s mid-to-high-end consumer segments. Most recently, Beauty Farm was recognized as the “Top Brand in High-End Beauty Services in China” by Frost & Sullivan in 2024, underscoring its unrivalled leadership in China’s high-end beauty and health market.

During the first half of the year, revenue from aesthetic medical services totaled RMB441 million, with a gross profit margin of 55.1%. The number of active members of Beauty Farm's aesthetic medical services grew by to 12.1% year-over-year to 19,086. Notably, 24.3% of Beauty Farm's beauty and wellness members also engaged in aesthetic medical services or subhealth medical services, reflecting a 90 basis points year-over-year increase in conversion rate.

Beauty Farm's subhealth medical services demonstrated strong momentum. Revenue reached RMB74 million in the first half of 2024, surging by 50% year-over-year. The Company's Women’s Special Care Center under the Neology brand performed exceptionally well, with revenue soaring over 200% year-over-year. Of the over 3,600 customers who received services at the center, the first time customer conversion rate reached an impressive 83.6% with a 70% member repurchase rate. Harnessing superior services and 100% in-house developed gynecological anti-aging solutions, our Women’s Special Care Center has emerged as a new growth engine.

Elevated Business Model, Integrating Naturade

In March 2024, Beauty Farm began acquiring a 70% equity interest in the core assets of Guangzhou Naturade Health Management Co., Ltd. (“Naturade”) for RMB350 million. The transaction marks the industry's largest M&A deal in 2024. As of September 1, 2024, the Group had integrated the remaining 75 Naturade stores into its network under a franchise model, completing the integration of all 150 Naturade stores. Upon completion of the transaction, the Naturade brand will be fully integrated into Beauty Farm's diverse brand portfolio, creating a powerful alliance between the two largest industry players. This integration notably elevates Beauty Farm's market share, strengthens its presence across China’s Greater Bay Area, and enhances its competitive edge in the wellness sector.

With the addition of Naturade’s AI-powered beauty and wellness offerings, Beauty Farm has refined its business model from a “dual-beauty” approach to a more holistic “dual beauty + dual wellness” model. This strategic transformation significantly broadens Beauty Farm's customer acquisition channels from “lifestyle beauty” to “lifestyle beauty and lifestyle wellness,” with the increased traffic expected to substantially grow Beauty Farm's lifestyle and wellness customer base. Under the newly enhanced model, Beauty Farm will continue providing one-stop beauty and wellness services, aesthetic medical services, and subhealth medical services across broader customer demographics, fostering a comprehensive beauty and health business ecosystem that aligns customers' needs more closely with Beauty Farm's extended offerings.

Group-Wide Commitment to M&A: Charting a New Era of Transformative Growth

Committed to its dual-engine growth strategy of internal and external growth, Beauty Farm is actively pursuing M&A opportunities within the industry and believes 2024 will mark the beginning of a new era of acquisitions and consolidations in the beauty industry. As competition in the beauty and wellness sector intensifies among established market players, the industry is witnessing significant consolidation and strategic shifts that reshape the supply side. Premium customer and market resources are increasingly consolidating around industry leaders. Top players, including Beauty Farm, possess extensive M&A backgrounds, sophisticated operational frameworks, and substantial financial resources, positioning them to accelerate industry consolidation and expand market share.

Against this backdrop, Beauty Farm plans to ramp its M&A activity, with a strategic focus on two primary types of opportunities: 1) M&A in the beauty industry to enrich its diversified brand portfolio and enhance traffic, as well as refresh its beauty and health business ecosystem; 2) M&A to amplify its membership base in direct-operated cities and enhance acquired customers’ value through integrated medical resources,thereby increasing beauty and health revenue scale.

Looking ahead, Beauty Farm will remain firmly committed to propelling growth through a dual-engine strategy of both internal and external expansion. Internally, the Company will leverage the strengths of its “dual beauty + dual wellness” business model to enhance operating efficiency and expand revenue scale. Externally, Beauty Farm will seize the opportunities emerging from the industry’s cyclical evolution and actively pursue potential M&A prospects when the time is right, enhancing market share along the way.

About Beauty Farm

Beauty Farm Medical and Health Industry Inc. is a leading beauty and health management platform in China. Beauty Farm developed a unique business model in the past 30 years, the dual-beauty model, covering customer beauty and health needs along their lifetime cycle. We offer a diversified service matrix, including beauty and wellness brands Beauty Farm, Palaispa,  and Naturade, aesthetic medical brand CellCare, and subhealth medical services brand Neology. Our nationwide store network reaches over 100 cities with near 500 stores and serves millions of mid-to-high-end customers in top-tier cities in China.

For more information, please visit https://ir.beautyfarm.com.cn/.

For investor and media inquiries, please contact:

Beauty Farm Medical and Health Industry Inc.

Vivian Lu

Tel: +86 (21) 6095-3299

Email: ir@beautyfarm.com.cn

Piacente Financial Communications

Jenny Cai

Tel: +86 (10) 6508-0677

Email: beautyfarm@tpg-ir.com

In the United States:

Piacente Financial Communications 

Brandi Piacente

Tel: +1-212-481-2050

Email: beautyfarm@tpg-ir.com