THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE

OVERVIEW

Mr. Zhang, our founder, started hair transplant business in since 2005. Mr. Zhang recognized the growth potential of the hair transplant business in and embarked upon establishing independent hair transplant brand. In 2010, Mr. Zhang first established hair transplant business with the brand name Yonghe (“雍禾”). After years of dedication and commitment, we have developed our hair transplant business to a market leading position. As of the Latest Practicable Date, we operated 51 clinics in 50 cities across mainland China.

In preparation for the [REDACTED], our Group underwent the Reorganization to streamline our shareholding structure. Our Company was incorporated as an exempted company with limited liability in the Cayman Islands on September 17, 2020 and is the holding Company of our Group. For details of our corporate restructuring, please refer to the paragraphs headed “Reorganization” in this section.

BUSINESS MILESTONES

The following table sets forth certain key business development milestones of our Group:

Year Milestones

2005 Mr. Zhang started hair transplant business in Beijing

2010 Mr. Zhang first established hair transplant business with the brand name Yonghe (“雍禾”)

We formulated China’s first hair transplant industry standard which was being reported by CCTV and became the first transplant service provider in China that had obtained the ISO certification

2013 We started to map out a nationwide business coverage and dedicated to own and operate all chain hospitals by ourselves

2014 We launched the 5 guarantee service agreement which guarantees patients’ pre- and post-surgery rights

We started to live-stream the whole hair transplant procedures to promote the transparency of the industry

– 107 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE

Year Milestones

2017 CYH and Panmao Shanghai invested in our Group and became our Controlling Shareholders

We introduced high-end service team, named “Yongxiang (雍享)”, to provide personalized hair transplant services

We have 22 clinics in operation at the end of the period

2018 We initiated a non-profit program “Yonghe Alopecia Caring Project”

We were approved as national high-tech enterprise

We have 30 clinics in operation at the end of the period

2019 We introduced “three transparent guarantees” committed by doctors to advocate the integrity of the industry

We have 37 clinics in operation at the end of the period

2020 We strategically cooperated with Ping’An to launch of hair transplant insurance, the first insurance product in industry

We have 48 clinics in operation at the end of the period

2021 We have 51 clinics in total as of the Latest Practicable Date

CORPORATE DEVELOPMENT

The following sets forth the major corporate history and shareholding changes of our Group.

Beijing Haiyouyou

Our business operations in China were primarily conducted through our principal subsidiary, Beijing Haiyouyou. The following sets forth the major corporate history and shareholding changes of Beijing Haiyouyou.

– 108 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE

1. Incorporation of Beijing Haiyouyou in 2015

Beijing Haiyouyou was established by Mr. LAN Feng and Mr. MA Liwei, both are Independent Third Parties, in the PRC on September 2, 2015 with an initial registered capital of RMB10,000,000. The Shareholding structure of Beijing Haiyouyou upon its incorporation was as set forth below:

Shareholding Name of Shareholders Share Capital Percentage (RMB)

Mr. LAN Feng (蘭楓) 9,900,000 99% Mr. MA Liwei (馬立偉) 100,000 1%

Total 10,000,000 100%

2. Acquisition by Beijing Xunyi in 2016

On December 13, 2016, Beijing Xunyi acquired 100% of equity interests in Beijing Haiyouyou from Mr. LAN Feng and Mr. MA Liwei at a nominal consideration. The consideration of the equity transfer was determined based on arm’s length negotiations among the parties taking into consideration the dormant status of Beijing Haiyouyou at the time of acquisition. The equity transfer was properly and legally completed on December 14, 2016. Upon completion of the equity transfer, Beijing Haiyouyou was wholly owned by Beijing Xunyi.

Beijing Xunyi is a company incorporated in the PRC on November 16, 2016 with a registered capital of RMB100,000. At the time of its establishment, Beijing Xunyi was owned by Mr. ZHANG Hui, brother of Mr. Zhang, as to 85% and by Mr. Zhang as to 15%. Pursuant to a capital contribution transfer agreement on June 28, 2018 between Mr. Zhang and Mr. ZHANG Hui, and as of the Latest Practicable Date, Beijing Xunyi is owned by Mr. Zhang as to 85% and by Mr. ZHANG Hui as to 15%.

3. Capital Increase and Share transfers in 2017

In June 2017, Beijing Xunyi, CYH, Panxin Shanghai, Xizang Yonghe and Beijing Haiyouyou entered into a share capital increase and subscription agreement, pursuant to which, (i) CYH subscribed for 6.625% of the enlarged share capital of Beijing Haiyouyou at a consideration of RMB33,125,000; (ii) Panxin Shanghai subscribed for 6.625% of the enlarged share capital of Beijing Haiyouyou at a consideration of RMB33,125,000; (iii) Xizang Yonghe subscribed for 1.75% of the enlarged share capital of Beijing Haiyouyou at a consideration of 8,750,000. The share capital increase was properly and legally completed on July 27, 2017. The consideration for the above share subscription was determined at arm’s length negotiation between the parties with reference to the earnings and growth prospect of Beijing Haiyouyou. Upon completion of the capital increase, the registered share capital of Beijing Haiyouyou increased from RMB10,000,000 to RMB11,764,706, and Beijing Haiyouyou was owned by Beijing Xunyi, CYH, Panxin Shanghai and Xizang Yonghe (西藏永禾) as to 85%, 6.625%, 6.625% and 1.75%, respectively.

– 109 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE

For detailed information of CYH, see “Substantial Shareholders” in this document. The general partner of Panxin Shanghai is Shanghai Panxin Mezzanine Investment Management Company Limited ( 上海磐信夾層投資管理有限公司)(“Shanghai Panxin Mezzanine Investment Management”), a company incorporated in the PRC with limited liability on July 12, 2011 and wholly-owned by CITIC Private Equity Funds Management Co., Ltd. (中信產業投資基金管理有限公司)(“CITIC PE”). For detailed information of CITIC PE, see section headed “Substantial Shareholders” in this document. Xizang Yonghe is a limited partnership incorporated in the PRC on December 30, 2016. The general partner of Xizang Yonghe was Xizang Ruizhe Investment Management Company Limited (西藏瑞哲投資 管理有限公司), which is wholly owned by Shanghai Panxin Mezzanine Investment Management.

In August 2017, Beijing Xunyi entered into a share transfer agreement with Wulian Yuhui Network Technology Partnership (Limited Partnership) (五蓮玉輝網絡科技合夥企業（有限合夥）) (“Wulian Yuhui”), a limited partnership established and controlled by Mr. Zhang, pursuant to which,