Core Insights - The medical beauty consumption market in 2024 is characterized by an increase in volume but a decrease in price, with 31 million consumers, a 10.7% year-on-year growth, and a 10% decline in average spending [1] - New Oxygen's chain business has experienced explosive growth, with a 381% year-on-year increase in customer visits and a 458% increase in service points [1][2] - The company is transitioning from traditional business models to a new chain model, which is expected to maintain high growth rates and offset declines in traditional services [3] Group 1: Market Trends - The medical beauty market is seeing a rational consumer decision-making process, with a growing demand for high-quality and cost-effective services [1] - The average spending per consumer in the medical beauty sector has decreased by 10% year-on-year [1] Group 2: Company Performance - New Oxygen has opened 31 stores across nine cities, with significant revenue growth in both first and second-tier cities, achieving a 643% increase in first-tier cities and a 99% increase in second-tier cities [2] - The gross margin of New Oxygen's stores has improved, with a 22% quarter-on-quarter increase, and 50% of stores achieving a gross margin exceeding 24% [2] Group 3: Financial Outlook - Despite the growth in the chain business, New Oxygen reported a net loss of 36 million yuan in the second quarter, with a 35.6% decline in revenue from its core information and appointment services [2] - The company anticipates that its light medical beauty chain business will reach between 150 million and 170 million yuan by the third quarter of 2025, representing a growth of 230.5% to 274.6% compared to the same period in 2024 [3]

Investment Rating - The report maintains an "Outperform" rating for the company with a target price of $10.28, while the current price is $3.74 [2][6]. Core Views - The company is facing seasonal pressures in Q3, but confidence in the FY25 growth target remains unchanged. The report anticipates a significant revenue increase in Q4 due to the release of pent-up consumer demand [4][5]. - The company’s offline medical beauty segment has shown strong growth, with revenue increasing by 427% year-on-year to 1.444 billion RMB in Q2, exceeding management's guidance [3][4]. - Despite a projected increase in revenue for FY25, the company is expected to incur a larger loss than previously forecasted, with losses now estimated to exceed 140 million RMB [5][6]. Financial Summary - For FY25, the company is projected to generate revenue of 1.546 billion RMB, reflecting a 5% increase from the previous year, while FY26 revenue is expected to rise significantly to 2.545 billion RMB, a 65% increase [2][9]. - The net profit for FY25 is forecasted to be a loss of 140 million RMB, with a projected recovery to a profit of 11 million RMB in FY26 [2][9]. - The gross margin is expected to decline to 49.3% in FY25 and further to 42.5% in FY26, indicating pressure on profitability [2][9]. Business Segment Insights - The offline medical beauty segment is expected to see Q3 revenue of 1.7 billion RMB, a 274% increase year-on-year, with a significant ramp-up anticipated in Q4 [4]. - The upstream product sales are projected to decline by 16% for FY25, while the POP business is expected to see a 38% decrease in revenue for the same period [4][5]. - The report highlights the company's strategy to open 10 new offline stores, despite the anticipated seasonal slowdown [4].

Core Viewpoint - New Oxygen Technology (NASDAQ: SY) reported a significant decline in revenue and a net loss for the second quarter of 2024, indicating challenges in its business model and ongoing transformation efforts [1]. Financial Performance - Total revenue for the second quarter was 379 million yuan, representing a year-on-year decrease of 7.0% [1]. - The company recorded a net loss of 36 million yuan, compared to a net profit of 18.9 million yuan in the same period of 2024 [1]. - Under non-GAAP measures, the net loss was 30.5 million yuan, while the previous year showed a net profit of 22.2 million yuan, indicating a significant shift to losses year-on-year [1]. Reasons for Decline - The decline in revenue was primarily attributed to a reduction in the number of medical institutions using the subscription platform for information services, as stated by the CFO Zhao Hui during the earnings call [1]. - The transition from profit to loss was influenced not only by the drop in revenue but also by ongoing investments in expanding offline business and optimizing operational systems during the company's transformation process [1].

Group 1 - The stock price of Xinyang (SY) opened up by 6.42% on August 18, reaching $3.98 per share, with a total market capitalization of $395 million [1] - Financial data shows that as of March 31, 2025, Xinyang's total revenue was 297 million RMB, a year-on-year decrease of 6.6%, and the net profit attributable to shareholders was -33.138 million RMB, a year-on-year decrease of 56.02% [1] Group 2 - On August 15, Xinyang is scheduled to disclose its fiscal year 2025 mid-term report before the market opens (Eastern Time), with the actual disclosure date subject to company announcements [2] - Xinyang International is focused on leveraging technology to assist women in enhancing their beauty and health, aiming to transform the opaque medical aesthetics market in China into a transparent one, ultimately creating a one-stop platform for users to find quality services [2]

Core Viewpoint - The medical beauty platform, New Oxygen (Nasdaq: SY), reported a decline in performance for the second quarter of 2025, with total revenue of 379 million yuan, a year-on-year decrease of 7%, and a net loss of 36 million yuan, compared to a profit of 18.9 million yuan in the same period last year. The revenue drop is attributed to a decrease in the number of medical service providers subscribing to the platform [2][4]. Group 1: Financial Performance - New Oxygen's revenue from medical beauty treatment services surged by 426.1% year-on-year to 144 million yuan, becoming the largest source of income for the company [2]. - The information and booking services segment continued to face pressure, with revenue of 135.2 million yuan, a decline of 35.6% compared to 209.7 million yuan in the same quarter of 2024 [4]. - The overall medical beauty market in China reached 280.4 billion yuan in 2023, with expectations to grow to 381.6 billion yuan by 2025, attracting significant interest from major internet companies [6][7]. Group 2: Business Transformation - New Oxygen is transitioning from a traditional B2B information intermediary model to a B2C vertical integrator in the medical beauty industry, facing intense competition [3]. - The company has established 29 operational chain stores in major cities, with 25 centers achieving positive monthly cash flow [5]. - The CEO anticipates that the medical beauty industry will see a significant increase in the number of chain stores, aiming for a thousand-store scale within 8 to 10 years [6]. Group 3: Industry Challenges and Opportunities - The medical beauty industry is experiencing dual challenges of intensified competition and rising consumer expectations, with platforms like Alibaba Health and Meituan diversifying their offerings [4][8]. - The CEO emphasizes that the core issue in the industry is a surplus of demand but a shortage of quality supply, presenting a key opportunity for New Oxygen's expansion [6]. - The industry is expected to undergo a transformation towards a "mass medical beauty" era as product prices normalize and quality supply increases, which will enhance the overall trust in the industry [6][9]. Group 4: Competitive Landscape - Major players like JD Health and Alibaba are actively entering the medical beauty space, with JD Health launching its first self-operated offline clinic and Alibaba creating a service matrix leveraging its ecosystem [7]. - The competition is shifting towards a model where online platforms dominate while offline services require a diverse approach, focusing on quality and customer experience [8]. - The industry is entering a phase of strong regulation, with new standards and policies being implemented to promote development and compliance [9].

Summary of So-Young's Q2 2025 Earnings Call Company Overview - **Company**: So-Young International Inc - **Industry**: Medical Aesthetics Key Financial Performance - Q2 2025 total revenue reached **RMB 379 million**, with aesthetic center revenue at **RMB 144 million**, marking a strategic shift as the largest revenue segment for the first time [2][3] - Total revenues decreased by **7% year-over-year** to **RMB 378.7 million**, primarily due to a decline in information service revenues [2][15] - Aesthetic treatment service revenues soared by **426.1% year-over-year** to **RMB 144.4 million** [15] - Net loss recorded at **RMB 36 million**, compared to a net income of **RMB 18.9 million** in the same period last year [16] Operational Highlights - Aesthetic center business saw a **46% quarter-over-quarter** and **426% year-over-year** revenue increase, driven by expansion to **29 centers** [2][4] - Over **100,000 active users** and **67,400 verified treatment visits** in Q2, up **24% quarter-over-quarter** and **381% year-over-year** [4] - High repeat purchase rate exceeding **60%** and customer satisfaction score of approximately **five out of five** [5] Strategic Initiatives - New treatments launched in Q2 2025 include **Miracle PLLA**, **Mermaid Skin Booster**, and **BBL Hero**, enhancing the product portfolio and increasing average revenue per user (ARPU) [2][9] - Customer acquisition strategies focus on cost efficiency, with over **70% of new clients** coming from existing customers [7][21] - Plans to open around **ten new aesthetic centers** in Q3 2025, aiming for a total of **50 centers** by the end of the year [11][17] Quality Assurance and Service Delivery - Rigorous physician selection and standardized training ensure high service quality, with nearly **90% of doctors** being specialist dermatologists [6][24] - Digitalization and AI-driven solutions enhance transparency and traceability in medical experiences [6] Market Outlook - The light medical aesthetic market in China is expected to reach around **RMB 340 billion** by 2030, with So-Young targeting a **25% market share** [20] - Current penetration in China is below **5%**, indicating substantial growth potential compared to mature markets like South Korea [20] Future Expansion Plans - Long-term goal to achieve **1,000 centers** within **8-10 years**, with a phased approach to expansion [18][19] - Plans to pilot **two to three franchise centers** in Q4 2025, with future expansion pace dependent on pilot performance [19] Cost Structure and Efficiency - Average customer acquisition cost remains low, with a focus on private domain traffic and referrals [21] - R&D expenses decreased by **26.6%** to **RMB 31.2 million**, attributed to improved staff efficiency [14] Product Strategy - Focus on anti-aging treatments and a curated product portfolio to drive repeat business and positive referrals [26][27] - Plans to introduce new light-based treatments and injectable products, enhancing the product pipeline [22][23] Conclusion So-Young's strategic shift towards aesthetic centers has resulted in significant revenue growth, despite overall revenue declines in other segments. The company is well-positioned for future expansion in the rapidly growing medical aesthetics market in China, with a focus on quality service delivery, customer acquisition efficiency, and a robust product portfolio.

Core Viewpoint - New Oxygen Technology is undergoing a strategic transformation amid a slowdown in online traffic and increasing regulation in the medical beauty industry, resulting in a decline in overall revenue and a shift towards offline business growth [1][2]. Financial Performance - In Q2, New Oxygen's total revenue decreased by 7.0% year-on-year to 379 million yuan, with a net loss of 36 million yuan compared to a profit of 18.9 million yuan in the same period last year [3][4]. - Revenue from information and appointment services, a core business, fell by 35.6% to 135 million yuan, indicating intensified competition and regulatory pressures in the online medical beauty service market [3][4]. - Revenue from medical product sales and maintenance services dropped by 28.1% to 76 million yuan, attributed to reduced order volumes and market demand changes [3][4]. Business Transformation - New Oxygen's offline light medical beauty chain business has seen explosive growth, with revenue from medical treatment services soaring by 426.1% year-on-year to 144 million yuan, becoming the largest revenue source for the company [1][4]. - The CEO expressed optimism about the offline business, indicating a significant structural breakthrough in the company's strategic transformation [1][6]. Expansion Plans - As of June 30, 2025, New Oxygen operates 29 light medical beauty chain stores in nine major cities, with plans to expand to 50 stores by the end of 2025 [6][7]. - The company aims to achieve a scale of 1,000 stores within 8 to 10 years, reflecting confidence in the long-term potential of the light medical beauty chain business [5][7]. - The management plans to pilot 2 to 3 franchise stores in Q4 2025, indicating a potential shift towards a franchise model in the future [8]. Market Challenges - Despite the growth in offline business, New Oxygen faces challenges from increasing competition in the light medical beauty market, with more participants entering the field [8][9].

Core Viewpoint - New Oxygen Technology is undergoing a significant strategic transformation amid a slowdown in online traffic and increasing regulation in the medical beauty industry, with a notable shift from online services to offline light medical beauty chain operations [1][2]. Financial Performance - In Q2, New Oxygen reported total revenue of 379 million yuan, a year-on-year decline of 7.0% [3]. - The company experienced a net loss of 36 million yuan in Q2, compared to a profit of 18.9 million yuan in the same period last year [4]. - Revenue from information and appointment services, a core business, fell by 35.6% to 135 million yuan, indicating intensified competition and regulatory pressures [3][4]. Business Transition - New Oxygen's offline light medical beauty chain business saw a remarkable growth of 426.1% in revenue, reaching 144 million yuan, becoming the largest revenue source for the company [1][6]. - The company plans to expand its "New Oxygen Youth Clinic" brand across China, aiming for a thousand-store scale in 8 to 10 years [6][7]. Operational Strategy - The management emphasizes a self-operated model for new stores, which allows for controlled capital expenditure and shorter payback periods, supported by a cash reserve of 999 million yuan [8]. - A franchise model is also being considered, with plans to pilot 2 to 3 franchise stores later this year [9]. Market Outlook - The rapid growth of the light medical beauty market is attracting more participants, leading to increased competition, which poses ongoing challenges for New Oxygen [9].

Core Insights - The company is undergoing a significant transformation, facing structural challenges in the traditional internet medical beauty platform, as evidenced by a 7% year-over-year decline in total revenue to 379 million yuan and a net loss of 36 million yuan compared to a profit of 18.9 million yuan in the same period last year [1][3]. Revenue Performance - Total revenue for the first half of the year was 676 million yuan, down 6.9% year-over-year, with net losses widening to 67.95 million yuan from just 60,000 yuan in the same period last year [3]. - Revenue from information and appointment services, the company's core business, fell by 35.6% to 135 million yuan from 210 million yuan year-over-year, highlighting intense competition in the online medical beauty information service market [4]. - Revenue from medical product sales and maintenance services decreased by 28.1% to 76 million yuan from 106 million yuan year-over-year, reflecting a significant drop in order volume for medical beauty products [4]. Business Segment Analysis - The total transaction volume facilitated by the platform was 304 million yuan, down from 428 million yuan in the same period last year, indicating challenges in the traditional business sector [4]. - The offline chain business has seen explosive growth, with medical treatment service revenue increasing by 426.1% to 144 million yuan, becoming the largest revenue source for the company [5]. - As of June 30, the company operated 29 light medical beauty chain stores in major cities, with 25 stores achieving positive monthly operational cash flow, indicating a promising profitability outlook [5]. Strategic Initiatives - The company plans to expand the number of medical beauty centers to 50 by the end of 2025, with a long-term goal of reaching 1,000 stores within 8 to 10 years, reflecting management's confidence in the offline business strategy [5]. - The company is innovating its operational model by reducing drug and device distribution costs through centralized procurement and self-built product lines, achieving store efficiency rates 3 to 5 times higher than similar institutions [6].

Core Insights - The company reported a revenue of 676 million yuan (approximately 94.37 million USD) for the first half of 2025, a decrease of 6.9% compared to the same period last year [2] - The net loss for the first half of 2025 was 67.95 million yuan, compared to a net loss of 60,000 yuan in the same period last year [2] Q2 Financial Performance - The revenue for Q2 2025 was 379 million yuan (approximately 52.90 million USD), down 7% from 407 million yuan in the same quarter last year [5] - Medical aesthetic treatment service revenue in Q2 2025 was 144.4 million yuan (approximately 20.20 million USD), an increase of 426% from 27.4 million yuan year-over-year, driven by the expansion of brand medical aesthetic centers [5] - Information and appointment service revenue for Q2 2025 was 135.2 million yuan (approximately 18.90 million USD), a decrease of 35.6% from 209.7 million yuan year-over-year, primarily due to a reduction in the number of medical service providers subscribing to information services on the platform [5] - Sales of medical products and maintenance services in Q2 2025 were 76 million yuan (approximately 10.60 million USD), down 28.1% from 105.8 million yuan year-over-year, mainly due to a decline in medical product order volume [5] - Other service revenue in Q2 2025 was 23.2 million yuan (approximately 3.20 million USD), a decrease of 64.0% from 64.4 million yuan year-over-year, attributed to a reduction in premium service revenue [5] Profitability and Costs - Gross profit for Q2 2025 was 194 million yuan, with a gross margin of 51% [8] - Total expenses for Q2 2025 were 241.3 million yuan (approximately 33.70 million USD), a decrease of 1.8% from 245.6 million yuan year-over-year [11] - Sales and marketing expenses in Q2 2025 were 131.3 million yuan (approximately 18.30 million USD), down 0.7% from 132.3 million yuan year-over-year, mainly due to a reduction in wage costs [11] - General and administrative expenses were 78.8 million yuan, an increase of 11.3% from 70.8 million yuan year-over-year, driven by an increase in administrative staff to support business upgrades and new strategic initiatives [11] - R&D expenses were 31.2 million yuan, down 26.6% from 42.5 million yuan year-over-year, attributed to improved employee efficiency [11] Losses and Cash Position - Operating loss for Q2 2025 was 47.11 million yuan, compared to an operating profit of 6.72 million yuan in the same quarter last year, resulting in an operating margin of -12% [13] - The net loss for Q2 2025 was 34.80 million yuan, compared to a net profit of 20.12 million yuan in the same period last year [16] - As of June 30, 2025, the company held cash and cash equivalents, restricted cash, and short-term investments totaling 998.6 million yuan (approximately 139.4 million USD), down from 1.2532 billion yuan at the end of 2024 [17] Future Outlook - The company expects Q3 2025 revenue from beauty treatment services to be between 150 million yuan (approximately 20.90 million USD) and 170 million yuan (approximately 23.70 million USD), representing a year-over-year growth of 230.5% to 274.6% [17] - The company's stock price closed at 3.74 USD, down 22.73% from the previous day, with a market capitalization of 375 million USD [17]