Climate Change Data

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Rapidly evolving online medical aesthetic service industry making future prospects difficult to evaluate.
• Historical growth rates not indicative of future growth; revenue decreased by 25.7% in 2022.
• Potential for consumer claims, regulatory investigations, and litigations regarding medical information and services.
• Risk of characterization as engaging in medical, drug, and/or medical device advertisement distribution without proper licenses.
• Risks associated with the acquisition of Wuhan Miracle.
• Failure to anticipate user preferences and provide high-quality content could affect user attraction and retention.
• Dependence on high-quality content from providers; decline in quality could decrease user traffic.
• Unfavorable market perception of the medical aesthetic industry could negatively impact business.
• Dependence on brand reputation; damage to reputation could harm business.
• Uncertainties, changes, and developments in the regulatory framework in mainland China.
• Risks related to health epidemics, natural disasters, and other outbreaks.
• Complex and evolving laws and regulations regarding cybersecurity, information security, privacy, and data protection.
• Potential for intellectual property infringement claims.
• Medical service providers may breach contractual obligations and fail to pay fees.
• Significant competition in the online medical aesthetic services market.
• Potential for fraudulent or illegal activities on the platform.
• Failure to obtain and maintain necessary approvals, licenses, or permits.
• Disruption in major social networks in China could limit user base growth.
• Potential for future losses.
• Failure to protect content and intellectual property.
• Liability for information or content on the platform.
• Privacy concerns relating to services and user information.
• Reliance on proper operation and maintenance of the online platform.
• Failure or poor performance of third-party software, infrastructure, or systems.
• Changes in consumer confidence and spending in China or a general downturn in the Chinese and global economy.
• Increases in labor costs and enforcement of stricter labor laws and regulations.
• Share-based incentive awards resulting in significant expenses.
• Ineffective internal control systems.
• Adverse developments affecting the financial services industry.
• PRC government finding contractual arrangements non-compliant with regulations.
• Contractual arrangements may not be as effective as direct ownership.
• Shareholders of consolidated affiliated entities may have conflicts of interest.
• Contractual arrangements may be subject to scrutiny by PRC tax authorities.
• Potential loss of assets held by consolidated affiliated entities.
• Uncertainties regarding the interpretation and implementation of the PRC Foreign Investment Law.
• Reliance on dividends from subsidiaries in mainland China for funding.
• PCAOB's historical inability to inspect the auditor.
• Potential prohibition of ADS trading under the HFCAA.
• Requirement for CSRC approval and/or filing for offshore offerings.
• Changes in China's economic, political, or social conditions or government policies.
• Difficulties in effecting service of legal process, enforcing foreign judgments, or bringing actions in China.
• Fluctuations in exchange rates.
• Governmental control of currency conversion.
• Complex procedures for acquisitions of Chinese companies by foreign investors.
• Regulation of loans and direct investment in mainland China by offshore holding companies.
• Regulations regarding the establishment of offshore special purpose companies.
• Regulations for employee stock ownership plans or share option plans.
• Classification as a resident enterprise in mainland China for PRC income tax purposes.
• Uncertainty with respect to indirect transfer of equity interests.
• Enforcement of the PRC Labor Contract Law.
• Non-compliance with anti-monopoly and anti-unfair competition laws.
• Difficulties for overseas regulators to conduct investigations in China.
• Volatility in the trading price of ADSs.
• Dual-class voting structure limiting influence on corporate matters.
• Share repurchase programs may not enhance long-term shareholder value.
• Difficulties in protecting shareholder interests due to Cayman Islands incorporation.
• Limitations on transfer of ADSs.
• Increased costs as a result of being a public company.
• Exemptions from certain corporate governance requirements.
• Classification as a passive foreign investment company (PFIC).
• Potential classification as an investment company under the Investment Company Act of 1940.

Mitigation Strategies

• Implementation of rigorous monitoring procedures and comprehensive platform rules to prevent underreporting of transaction value.
• Adoption of security policies and measures, including encryption technology, to protect data.
• Establishment of internal protocols to control access to confidential personal data.
• Development of advanced content monitoring technologies, policies, and procedures.
• Implementation of a credit score system for medical aesthetic service providers.
• Maintenance of various insurance policies.
• Stringent controls and procedures for cash flows within the organization.
• Continuous expansion into new geographic areas and offering new services.
• Investment in content production and attraction of creative talents.
• Collaboration with key opinion leaders, professional experts, and social media.
• Regular review of listed doctors on the Emerald Doctor list.
• Implementation of various policies and procedures to ensure rigorous risk management and internal control.

Supply Chain Management

Climate-Related Risks & Opportunities