Core Viewpoint - So-Young International Inc. plans to change the ratio of its American depositary shares (ADSs) from 13 ADSs representing 10 Class A ordinary shares to 1 ADS representing 15 Class A ordinary shares, effective June 30, 2025 [1][2]. Company Overview - So-Young International Inc. is the leading aesthetic treatment platform in China, connecting consumers with online services and offline treatments [4]. - The company provides access to aesthetic treatments through its online platform and branded aesthetic centers, offering curated treatment information, facilitating online reservations, and delivering high-quality treatments [4]. - So-Young also develops, produces, and distributes optoelectronic medical equipment and injectable products, positioning itself well for long-term growth in the medical aesthetic value chain [4]. ADS Ratio Change Details - The change in the ADS ratio will result in a proportional reverse ADS split, with no change to the Company's Class A ordinary shares [2]. - The new ADSs will be automatically issued to ADS holders of record on the effective date, with old ADSs being cancelled [2]. - Fractional new ADSs will not be issued; instead, fractional entitlements will be aggregated and sold, with net cash proceeds distributed to ADS holders [2]. Expected Impact on ADS Price - The ADS price is expected to increase proportionally as a result of the change in the ADS ratio, although there is no assurance that the price will be equal to or greater than the proportional price based on the ADS price before the change [3].

So-Young International (SY) Q1 2025 Earnings Call May 16, 2025 07:30 AM ET Company Participants Mona Qiao - Investor Relation OfficerHui Zhao - CFO & DirectorNelson Cheung - Vice President, Equity Research Conference Call Participants Yiting Li - AnalystNone - AnalystDaisy Chen - Research Analyst Operator Ladies and gentlemen, thank you for standing by for So Young's First Quarter twenty twenty five Earnings Conference Call. Are As a reminder, today's conference call is being recorded. I would now like to t ...

Financial Data and Key Metrics Changes - Total revenues for Q1 2025 were CNY 297.3 million, down 60.6% year over year, primarily due to a decrease in the number of medical service providers subscribing to information services [14] - Net loss attributable to So Young was CNY 33.1 million, compared to a net loss of CNY 21.2 million in the same period last year [17] - Non-GAAP net loss attributable to So Young was CNY 31.5 million, compared to non-GAAP net income of CNY 4.1 million during the same period in 2024 [17] - Basic and diluted losses per ADS were CNY 0.32, compared to CNY 0.21 in the same period of 2024 [18] - Cash and cash equivalents totaled CNY 1.1 billion as of March 31, 2025, indicating a robust cash position [18] Business Line Data and Key Metrics Changes - Revenue from aesthetic treatment services reached CNY 98.8 million, a remarkable 551.4% year over year increase, primarily due to the expansion of the aesthetic center business [15] - Total verified paid visits exceeded 45,500, up 18.5% quarter on quarter and 874.3% year over year [7] - Total number of verified paid aesthetic treatments performed surpassed 92,900, up 14% quarter on quarter and 989.4% year over year [7] - Cost of aesthetic treatment services was CNY 80.3 million, up 547.6% year over year, primarily due to the expansion of the aesthetic center business [16] Market Data and Key Metrics Changes - The aesthetic center business is gradually becoming the main growth driver, with 18 centers achieving positive monthly operating cash flow and 16 centers being profitable on a monthly basis as of March [6] - The company aims to build a differentiated nationwide light medical aesthetic chain with strong brand recognition [10] Company Strategy and Development Direction - The company is pursuing a vertical integration strategy and expanding its network of aesthetic centers in major cities [5] - A franchise model is being planned to accelerate geographic reach and network density while reducing capital expenditure pressure [32] - The company aims to develop proprietary products and control the supply chain, inspired by the Sam's Club retail model [11][19] - The focus is on high-quality proprietary products and services at fair prices, aiming to become a leading player in the medical aesthetics industry [12] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential of the aesthetic center business, emphasizing the importance of maintaining a sustainable financial model [32] - The company views trade tensions as an opportunity to strengthen its domestic supply chain and support import replacement [41] - The outlook for Q2 2025 expects aesthetic treatment services revenues to be between CNY 120 million and CNY 140 million, representing a 337.3% to 410.1% increase from the same period in 2024 [18][19] Other Important Information - The company has allocated additional marketing resources and implemented sales incentives to boost revenue contribution from proprietary products [9] - The number of institutions served with supply chain solutions for injectables grew to over 1,500 as of Q1 [9] Q&A Session Summary Question: How is So Young Clinic different from traditional medical institutions like Meilai and Istar? - The aesthetic center business uses a fast casual model, offering focused services with higher frequency and lower per customer spend compared to traditional models [23][24] Question: Will CapEx become a burden for the company as the clinic network grows? - The company emphasizes careful management of CapEx and plans to open around 30 new clinics per year while exploring a franchise model to reduce CapEx pressure [32][33] Question: How does the Miracle Laser create more synergy with the company's core business? - The integration of Wuhan Medical Laser improves R&D capabilities and supports the growth model by supplying high-quality, cost-effective equipment to aesthetic centers [35][36] Question: How will ongoing trade tensions impact the company's business? - The direct impact is limited, but the company sees it as an opportunity to strengthen its domestic supply chain and pivot to alternative products if necessary [41][43] Question: Can management elaborate on the company's future investment plan and cost reduction plan? - The company remains focused on sustainable growth, optimizing offerings, and increasing investment in proprietary product lines to support margin expansion [45][46]

Core Viewpoint - So-Young International Inc. reported its first quarter 2025 financial results, highlighting a decrease in total revenues but significant growth in aesthetic treatment services, indicating a shift in business dynamics and ongoing strategic investments to support long-term growth [1][5][19]. Financial Highlights - Total revenues for Q1 2025 were RMB 297.3 million (US$ 41.0 million), a decrease of 6.6% from RMB 318.3 million in Q1 2024 [5][6]. - Net loss attributable to So-Young was RMB 33.1 million (US$ 4.6 million), compared to a net loss of RMB 21.2 million in the same period of 2024 [12][13]. - Non-GAAP net loss was RMB 31.5 million (US$ 4.3 million), a significant decline from a non-GAAP net income of RMB 4.1 million in Q1 2024 [13][6]. - The aggregate value of medical aesthetic treatment transactions facilitated by So-Young's platform was RMB 303.2 million, down from RMB 367.1 million in Q1 2024 [6]. Operational Highlights - The number of verified paid visits for the quarter reached over 45,500, compared to approximately 4,600 in the same period of 2024 [6]. - The number of verified paid aesthetic treatments performed surpassed 92,900, compared to approximately 8,500 in Q1 2024 [6]. - As of March 31, 2025, So-Young operated 23 aesthetic centers across nine major cities, with 18 centers achieving positive monthly operating cash flow [6]. Revenue Breakdown - Revenue from aesthetic treatment services was RMB 98.8 million (US$ 13.6 million), an increase of 551.4% from RMB 15.2 million in Q1 2024 [16]. - Revenue from information, reservation services, and other sources was RMB 142.9 million (US$ 19.7 million), a decrease of 34.1% from RMB 216.6 million in Q1 2024 [5][16]. - Sales of medical products and maintenance services were RMB 55.6 million (US$ 7.7 million), a decrease of 35.7% from RMB 86.5 million in Q1 2024 [16]. Cost and Expenses - Cost of revenues was RMB 151.4 million (US$ 20.9 million), an increase of 29.1% from RMB 117.3 million in Q1 2024, primarily due to the expansion of branded aesthetic centers [7]. - Total operating expenses decreased by 20.4% to RMB 189.3 million (US$ 26.1 million) from RMB 237.8 million in Q1 2024 [10]. Business Outlook - For Q2 2025, So-Young expects aesthetic treatment services revenues to be between RMB 120.0 million (US$ 16.5 million) and RMB 140.0 million (US$ 19.3 million), representing a 337.3% to 410.1% increase from the same period in 2024 [19].

Financial Performance - Revenues from consolidated affiliated entities accounted for 78.9%, 80.4%, and 80.0% of total revenues for the years ended December 31, 2022, 2023, and 2024, respectively [28]. - The total revenues for the year ended December 31, 2024, amounted to RMB 1,466.7 million, a slight decrease from RMB 1,498.0 million in 2023 [52]. - The net loss attributable to So-Young International Inc. for the year ended December 31, 2024, was RMB 589.5 million, compared to a net income of RMB 21.3 million in 2023 [52]. - The total operating expenses for the year ended December 31, 2024, were RMB 1,523.6 million, an increase from RMB 1,014.7 million in 2023 [52]. - Total revenues increased by 19.1% from RMB 1,257.9 million in 2022 to RMB 1,498.0 million in 2023, but decreased by 2.1% to RMB 1,466.7 million (US$200.9 million) in 2024 [69]. - Gross profit rose by 10.3% from RMB 864.6 million in 2022 to RMB 953.7 million in 2023, but fell by 5.7% to RMB 899.1 million (US$123.2 million) in 2024 [69]. - Gross margin decreased from 68.7% in 2022 to 63.7% in 2023, and further decreased to 61.3% in 2024 [69]. Cash Flow and Liquidity - Cash and cash equivalents increased to RMB 587,749,000 in 2024 from RMB 426,119,000 in 2023, reflecting a growth of about 37.9% [55][56]. - Net cash provided by operating activities was RMB (25,633,000) for the year ended December 31, 2024, compared to RMB (25,633,000) in 2023, indicating no change in operational cash flow [58]. - The company reported a net cash increase of RMB 213,229,000 in 2024, up from RMB 432,740,000 at the beginning of the year [58]. - The total amount due from Group companies was RMB 1,894,656,000 in 2024, a decrease from RMB 2,512,057,000 in 2023, reflecting a reduction of approximately 24.5% [55][56]. - The company reported a net cash used in investing activities of RMB 202,611 thousand for 2023, compared to a net cash provided of RMB 572,212 thousand in 2022, highlighting a shift in investment strategy [59]. - The company’s cash flow from operating activities improved significantly, with a net cash provided of RMB 22,501 thousand in 2023 compared to a net cash used of RMB 112,873 thousand in 2022, showing operational efficiency [59]. Regulatory Environment - The PCAOB was unable to inspect registered public accounting firms in mainland China and Hong Kong, which could affect the trading of the company's shares under the Holding Foreign Companies Accountable Act [38]. - The company may face significant risks related to regulatory approvals and oversight in China, which could adversely affect operations and share value [36]. - Regulatory compliance is critical, as failure to obtain necessary licenses and permits could disrupt operations and delay expansion plans [90]. - The PRC tax authorities may challenge the contractual arrangements, leading to additional tax liabilities that could negatively impact the company's financial condition [187]. - The Foreign Investment Law introduces uncertainties regarding the company's corporate structure and operations, which could affect compliance and governance [190]. - The PRC government's oversight could materially affect operations and the value of the company's ADSs [206]. Operational Risks - The company faces potential legal claims and regulatory investigations related to the medical information and services offered on its platform [70]. - The company faces risks related to the acquisition of Wuhan Miracle, including challenges in integration and potential unanticipated expenses [91]. - The integration of Wuhan Miracle may result in operational challenges and could impact the anticipated benefits of the acquisition [91]. - The company must navigate a complex regulatory environment for medical equipment, which poses challenges for product acceptance and market competition [92]. - The company faces risks related to geopolitical tensions, particularly between the United States and China, which could negatively impact its business operations [161]. Market and Competitive Landscape - The online medical aesthetic service market is highly competitive, with risks of losing market share if the company cannot compete effectively [121]. - Average fee rates for medical aesthetic treatments in China are expected to decline, which could adversely affect the company's profitability and financial condition [123]. - Negative market perception of the medical aesthetic industry could lead to reduced consumer confidence and demand for services [98]. - The company’s expansion strategies may be affected by competition, regulatory challenges, and the need to adapt to local market conditions [82]. Financial Structure and Taxation - Under the PRC Enterprise Income Tax Law, dividends paid by foreign-invested enterprises to foreign non-resident investors are subject to a 10% withholding tax [41]. - The hypothetical tax scenario indicates that a 25% tax on earnings and a 10% withholding tax could reduce net distributions to shareholders to 67.5% of pre-tax earnings [42]. - The classification as a resident enterprise in mainland China could lead to a 25% PRC enterprise income tax on global income for the company and its non-resident shareholders [224]. - If deemed a resident enterprise, the company may need to withhold a 10% tax on dividends paid to non-resident shareholders, including ADS holders [227]. - The company faces uncertainties regarding the indirect transfer of equity interests and potential re-characterization of such transfers as direct transfers subject to PRC enterprise income tax [228]. Corporate Governance and Management - The company relies on maintaining high-quality content to attract and retain users, which is essential for user engagement and competitive positioning [93]. - The company relies on key employees for its success, and failure to retain them could have a material adverse effect on its business [149]. - The company has implemented strict procedures to verify the qualifications of medical service providers, but cannot guarantee all providers are fully licensed [73]. - The company has raised substantial financing since its inception to support growth and may require additional capital for brand awareness, new services, geographic expansion, and acquisitions [156]. Cash Management and Financial Reporting - The company’s internal control over financial reporting was deemed effective as of December 31, 2024, by management and its independent registered public accounting firm [171]. - The company maintains limited business insurance coverage, which may expose it to substantial costs and resource diversion if uninsured risks materialize [155]. - The company recorded share-based compensation expenses of RMB 43.3 million, RMB 36.3 million, and RMB 32.7 million (US$4.5 million) for the years 2022, 2023, and 2024, respectively [169].

Core Viewpoint - So-Young International Inc. announced a significant share purchase by its chairman, Mr. Xing Jin, which reflects his confidence in the company's long-term growth prospects [1][3]. Company Overview - So-Young International Inc. is the leading aesthetic treatment platform in China, connecting consumers with online services and offline treatments. The company offers access to aesthetic treatments through its online platform and branded aesthetic centers, providing curated treatment information and facilitating online reservations [4]. Share Purchase Details - On March 31, 2025, Mr. Xing Jin purchased 4,544,820 American depositary shares (ADSs) for a total of US$ 4,090,338, increasing his beneficial ownership to 24.9% of the company's outstanding shares. The ADSs were acquired at a price of US$ 0.9 per ADS [1][2]. Management Commentary - Mr. Xing Jin stated that the share purchase demonstrates his continued confidence in the company and its long-term growth prospects [3]. Financial Impact - The company's directors do not expect the share purchase to have any material adverse impact on its financial position and business operations [2].

Financial Data and Key Metrics Changes - In Q4 2024, total revenue was RMB 369.2 million, a decrease of 5.5% year-over-year, primarily due to a decline in revenue from So-Young Prime [23] - Net loss attributable to So-Young was RMB 607.6 million, compared to a net income of RMB 17.5 million in the same period last year [27] - Non-GAAP net loss was RMB 53.2 million, compared to a non-GAAP net income of RMB 35.7 million in Q4 2023 [27] - For the full year 2024, total revenues were RMB 1.47 billion, down 2.1% year-over-year [28] Business Line Data and Key Metrics Changes - Revenue from aesthetic treatment services surged to RMB 81.3 million, up 701.6% year-over-year, driven by the expansion of the aesthetic center business [23] - Sales of medical products and maintenance services were RMB 86.2 million, down 15.2% year-over-year, primarily due to a decrease in order volume for medical equipment [23] - Cost of aesthetic treatment services was RMB 65.2 million, up 702.3% year-over-year, reflecting the expansion of the aesthetic center business [24] Market Data and Key Metrics Changes - Total GMV for verified medical aesthetic services reached RMB 356.6 million, up 3% sequentially [17] - The total number of verified paid aesthetic treatments surpassed 81,500, with over 38,000 verified paid visits recorded [10][11] - The total number of active users exceeded 39,500, indicating strong brand appeal and market demand [11] Company Strategy and Development Direction - The company is focused on vertical integration within the aesthetic medical industry, leveraging its user base and supply chain capabilities to drive growth [7][32] - Plans to deepen presence in core cities and replicate successful aesthetic centers to expand the network further [14] - The company aims to establish a leading light medical aesthetic chain with over 1,000 locations in China, which currently has a low penetration rate of chain clinics [51][52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term strategy, emphasizing the importance of establishing a robust aesthetic center network and improving financial performance [32] - The company anticipates steady improvement in financial performance as market conditions stabilize and aesthetic center businesses expand [32] - Management acknowledged that while near-term profitability may be impacted by expansion efforts, the focus remains on sustainable high-quality growth [66] Other Important Information - The company recorded a one-time goodwill impairment charge of RMB 540 million for its subsidiary, impacting the bottom line [7] - Customer satisfaction remains high at 4.98 out of 5, indicating strong service quality [10] Q&A Session Summary Question: What are the latest developments in merchant support during the industry consolidation period? - Management highlighted the importance of differentiators for specialized medical aesthetic institutions to maintain pricing power and market presence [36][37] Question: How does the company adapt its strategies for centers at different stages of development? - Management explained the implementation of differentiated operational strategies for aesthetic centers in various phases to optimize performance and enhance brand influence [44][46] Question: Can the aesthetic center business maintain growth? - Management indicated that the aesthetic center network has significant growth potential, with low market penetration of chain clinics in China [51][52] Question: What is the strategy for the upstream business? - Management discussed the integration of Miracle Laser into the upstream business, focusing on product innovation and enhancing supply chain capabilities [58][60] Question: Could management share more insights into the company's financial outlook? - Management reiterated the commitment to sustainable growth through vertical integration and maintaining a balance between growth and profitability [66]

Financial Data and Key Metrics Changes - In Q4 2024, total revenue was RMB 369.2 million, a decrease of 5.5% year-over-year, primarily due to a decline in revenue from So-Young Prime [23] - Net loss attributable to So-Young was RMB 607.6 million, compared to a net income of RMB 17.5 million in the same period last year [27] - Non-GAAP net loss was RMB 53.2 million, compared to a non-GAAP net income of RMB 35.7 million in the same period of 2023 [27] - For the full year 2024, total revenues were RMB 1.47 billion, down 2.1% year-over-year [28] Business Line Data and Key Metrics Changes - Revenue from aesthetic treatment services surged to RMB 81.3 million in Q4, up 701.6% year-over-year, driven by the expansion of the aesthetic center business [23] - Sales of medical products and maintenance services were RMB 86.2 million, down 15.2% year-over-year, primarily due to a decrease in order volume for medical equipment [23] - Total operating expenses were RMB 815.2 million, up 216.2% year-over-year, with significant increases in sales and marketing expenses [25] Market Data and Key Metrics Changes - The total number of verified paid aesthetic treatments surpassed 81,500, with over 38,000 verified paid visits recorded [10] - The aesthetic center network demonstrated strong growth, with 19 clinics opened across nine core cities, and 11 centers achieving positive monthly operating cash flow in December [9] Company Strategy and Development Direction - The company is focused on vertical integration within the aesthetic medical industry, leveraging its user base and supply chain capabilities to drive growth [7][32] - The aesthetic center business is seen as a new growth engine, with plans to replicate successful models across more locations [14] - The company aims to establish a leading position in the market by expanding its aesthetic center network, which currently has a low penetration rate in China [51][52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential of the aesthetic center network, citing the low market share of chain clinics in China [51] - The company anticipates steady improvement in financial performance as market conditions stabilize and the aesthetic center business continues to expand [32] - Management highlighted the importance of maintaining a balance between growth and profitability while enhancing financial resilience [67] Other Important Information - The company recorded a one-time goodwill impairment charge of RMB 540 million for its subsidiary, impacting the bottom line [7] - Cash and cash equivalents, along with term deposits and short-term investments, totaled RMB 1.25 billion as of December 31, 2024, indicating a robust cash position [30] Q&A Session Summary Question: What are the latest developments in merchant support during the industry consolidation period? - Management noted that as industry consolidation accelerates, large chain institutions are gaining market share, and So-Young is optimizing its platform to empower aesthetic institutions and improve user experience [36][37] Question: How does the company adapt its strategies for centers at different stages of development? - Management explained that differentiated operational strategies are implemented at various phases to ensure optimal performance and enhance brand influence [44][46] Question: Can the aesthetic center business maintain growth? - Management affirmed that the aesthetic center network has the capability for sustained growth, citing the low penetration rate of chain clinics in China as an opportunity for expansion [51][52] Question: What is the strategy for the upstream business? - Management discussed the integration of Miracle Laser into So-Young's upstream business, focusing on product innovation and enhancing collaboration to drive sustainable growth [58][60] Question: Could management share more insights into the company's financial outlook? - Management emphasized a commitment to sustainable growth through vertical integration, balancing growth with profitability, and maintaining financial resilience [67]

Core Viewpoint - So-Young International Inc. reported its financial results for Q4 and fiscal year 2024, highlighting significant growth in aesthetic treatment services despite overall revenue decline due to a one-time goodwill impairment charge. Financial Highlights - Total revenues for Q4 2024 were RMB 369.2 million (US$ 50.6 million), a decrease of 5.5% from RMB 390.6 million in Q4 2023 [7][8] - For the full year 2024, total revenues were RMB 1,466.7 million (US$ 200.9 million), a decrease of 2.1% from RMB 1,498.0 million in 2023 [9][21] - Aesthetic treatment services revenues reached RMB 81.3 million (US$ 11.1 million) in Q4 2024, marking a 701.6% increase from RMB 10.1 million in Q4 2023 [10][14] - The net loss attributable to So-Young for Q4 2024 was RMB 607.6 million (US$ 83.2 million), compared to a net income of RMB 17.5 million in Q4 2023, primarily due to a goodwill impairment charge of RMB 540.0 million (US$ 74.0 million) [8][18] - Non-GAAP net loss for Q4 2024 was RMB 53.2 million (US$ 7.3 million), compared to a non-GAAP net income of RMB 35.7 million in Q4 2023 [19][30] Operational Highlights - The number of verified paid visits in Q4 2024 exceeded 39,500, compared to approximately 2,300 in the same period of 2023 [8] - The number of active users reached over 52,000, up from approximately 2,900 in Q4 2023 [8] - As of December 31, 2024, So-Young operated 19 aesthetic centers across nine major cities, with 11 centers generating positive operating cash flow [6][8] Cost and Expenses - Total operating expenses for Q4 2024 were RMB 815.2 million (US$ 111.7 million), an increase of 216.2% from RMB 257.8 million in Q4 2023 [16] - Cost of revenues for Q4 2024 was RMB 153.1 million (US$ 21.0 million), an increase of 11.2% from RMB 137.6 million in Q4 2023 [12][22] Dividend Declaration - The board declared a special cash dividend of US$ 0.03445 per ordinary share, totaling approximately US$ 3 million, to be paid on or around April 25, 2025 [5] Business Outlook - For Q1 2025, So-Young expects total revenues to be between RMB 280.0 million (US$ 38.4 million) and RMB 300.0 million (US$ 41.1 million), representing a decrease of 12.0% to 5.7% from Q1 2024 [33]

Company Overview - So-Young International Inc. is the largest social community in China for the medical aesthetics industry, connecting consumers, professionals, and service providers [3] - The company offers reliable information and high-quality content, along with social functions and vetted medical aesthetic service providers [3] - So-Young is positioned to expand within the medical aesthetic industry value chain and into the growing consumption healthcare service market [3] Financial Results Announcement - The company has rescheduled the release of its financial results for Q4 and full year ended December 31, 2024, to before U.S. markets open on March 28, 2025 [1] - An earnings conference call will be held on March 28, 2025, at 7:30 AM U.S. Eastern Time [2] - Dial-in details for the conference call have been provided for international, U.S., and Mainland China participants [2]