Core Viewpoint - The company, Xinyang (SY.US), experienced a significant stock increase of 9.43%, closing at $4.06, with a total market capitalization of $403 million. The Q2 2025 financial report indicates robust growth in the company's revenue, particularly in its offline light medical beauty segment, which has become the largest revenue source for the company [1]. Financial Performance - In Q2 2025, the company achieved total revenue of 379 million yuan [1]. - The revenue from medical beauty treatment services reached 144 million yuan, reflecting a year-on-year growth rate of 426.1% [1]. Business Expansion - The number of medical beauty clinics under the light medical beauty chain brand "Xinyang Youth Clinic" has increased to 33 [1]. - The company's Chairman and CEO, Jin Xing, stated that there will be an increased density of Xinyang Youth Clinics in major cities such as Beijing and Guangzhou, with an expectation to reach 50 clinics by the end of the year [1].

Financial Data and Key Metrics Changes - Total revenue for Q2 was RMB 379 million, a decrease of 7% year over year, primarily due to a decline in medical service providers subscribing to information services [15] - Aesthetic treatment service revenues reached RMB 144 million, an increase of 426% year over year, exceeding guidance [15] - Net loss attributable to the company was RMB 36 million, compared to a net income of RMB 18.9 million in the same period last year [19] - Non-GAAP net loss was RMB 30.5 million, compared to a non-GAAP net income of RMB 22.2 million in the same period of 2024 [19] - Basic and diluted losses per ADS were RMB 0.35, compared to earnings of RMB 0.18 in the same period last year [19] Business Line Data and Key Metrics Changes - Revenue from aesthetics center business reached RMB 144 million, marking it as the largest revenue segment for the first time [4] - Aesthetic treatment services revenue increased by 46% quarter over quarter and 426% year over year [5] - Total number of verified treatment visits surpassed 67,400 in Q2, up 24% quarter over quarter and 381% year over year [7] - The overall repeat purchase rate for the aesthetic center business exceeded 60% [7] Market Data and Key Metrics Changes - The light medical aesthetic market in China is expected to reach around RMB 26 billion by 2030, with a penetration rate forecasted to reach 30% [30] - The company aims to achieve a market share of roughly 25% in the light medical aesthetic sector [30] Company Strategy and Development Direction - The company plans to open around 10 aesthetic centers in the third quarter, targeting a total of 50 centers by year-end [11] - The focus is on expanding in both first-tier and core second-tier cities, enhancing accessibility to medical aesthetic services [11] - The company is committed to optimizing user experience and operational efficiency to strengthen its competitive edge [13] Management Comments on Operating Environment and Future Outlook - Management remains optimistic about the growth potential of China's medical aesthetic market, citing a current penetration rate below 5% [30] - The company expects aesthetic treatment service revenues to be between RMB 150 million and RMB 170 million in the upcoming quarter, representing a significant increase from the same period in 2024 [20] - The company emphasizes the importance of sustainable low-cost customer acquisition and a diversified upstream supply chain [31] Other Important Information - The company has maintained a robust cash position with cash and cash equivalents totaling RMB 98.6 million as of June 30, 2025 [20] - The gross profit margin for aesthetic treatment services expanded by around five percentage points sequentially [8] Q&A Session Summary Question: Expansion plan for C and I payment and franchise model - The company aims to grow the number of centers to 50 by the end of this year, with plans for more than 10 openings in the second half [24] - Long-term, the target is to achieve 1,000 centers within eight to ten years, with franchising being a future focus [25][26] Question: Growth potential of the Chinese medical aesthetics market - Management is optimistic about the market, with substantial growth potential indicated by a low current penetration rate [30] - The company plans to focus on three core capabilities to maintain its competitive edge [31] Question: Outlook for customer acquisition cost and marketing expenses - The average customer acquisition cost remains low, with over 70% of new customers coming from referrals [34] - The company plans to enhance brand visibility through localized marketing initiatives [34] Question: Recruitment of doctors and reliance on center managers - There is a solid base for recruiting doctors, with many moving from public hospitals to the medical aesthetic sector [40] - The company operates on a model that reduces reliance on center managers, improving operational efficiency [42] Question: Differentiation in product strategy - The product strategy focuses on anti-aging treatments, ensuring consistency and overall cost-effectiveness across the portfolio [46] - The company aims to optimize its product portfolio based on market demand and competitive trends [48] Question: Updates on the POP business - The POP business remains a key pillar of profitability, with plans to promote synergies between POP and aesthetic center businesses [50]

Core Viewpoint - New Oxygen aims to become a disruptor in the medical beauty industry by launching its own light medical beauty brand, "New Oxygen Youth Clinic," to create a "high quality, low price" model in response to the changing consumer demographics and market dynamics [1][2][3] Company Strategy - New Oxygen has transitioned from being a medical beauty e-commerce platform to establishing its own light medical beauty clinics, targeting a broader consumer base beyond high-net-worth individuals [2][3] - The company plans to integrate and optimize its supply chain to lower costs and enhance service quality, addressing consumer pain points related to high prices and inconsistent treatment quality [3][8] Market Dynamics - The light medical beauty market in China reached a scale of 1,461 billion yuan in 2023, accounting for 80.8% of total medical beauty consumption, with a year-on-year growth of 5.8% [7] - The market is expected to grow to 4,157 billion yuan by 2030, nearly double that of surgical medical beauty [7] Financial Performance - New Oxygen's light medical beauty chain business reported a revenue increase of 551.4% year-on-year to 98.88 million yuan in Q1 2025, contributing 33.3% to total revenue [3] - The company anticipates its medical treatment service revenue to reach 120-140 million yuan in Q2 2024, representing a year-on-year growth of 337%-410% [3] Competitive Landscape - New Oxygen's pricing strategy has led to friction with upstream manufacturers over pricing authority, highlighting a shift in market dynamics where pricing should be determined by supply and demand rather than manufacturer control [5][6] - The company has made strategic acquisitions to strengthen its position in the upstream medical beauty market, including a significant investment in a medical device company [7][8] Industry Challenges - The medical beauty industry faces challenges such as declining profits and increasing scrutiny from regulators, necessitating a transformation in business models and practices [3][11] - New Oxygen aims to address safety and quality concerns in the industry by ensuring rigorous training for its medical staff and maintaining high operational standards [10][12] Future Outlook - The industry is expected to evolve towards a model where professional doctors operate clinics, ensuring safety and quality, alongside large chain institutions like New Oxygen Youth Clinic [11][13] - The company envisions a future where transparent pricing and service quality will become the norm, making light medical beauty accessible to a wider audience [12][13]

Core Viewpoint - New Oxygen aims to become a disruptor in the medical beauty industry by launching its own light medical beauty brand, New Oxygen Youth Clinic, to create a "high quality, low price" model in response to the market shift towards a broader consumer base [1][5][14] Group 1: Company Strategy - New Oxygen officially launched its light medical beauty brand, New Oxygen Youth Clinic, in November 2024, promoting it as an affordable option for consumers [4][5] - The company is transitioning from being a medical beauty e-commerce platform to establishing physical clinics, aiming to integrate and optimize the entire service chain to enhance quality and reduce costs [5][9] - New Oxygen's light medical beauty projects include various services priced from hundreds to thousands of yuan, targeting a wider audience beyond high-net-worth individuals [4][8] Group 2: Market Context - The light medical beauty market in China reached a scale of 1,461 billion yuan in 2023, accounting for 80.8% of the total medical beauty consumption, with a year-on-year growth of 5.8% [8] - The traditional high-price model in the medical beauty industry is becoming unsustainable, leading to a demand for more affordable options as the consumer base shifts to the general public [5][8][14] Group 3: Competitive Dynamics - New Oxygen's pricing strategy has led to conflicts with upstream manufacturers over pricing authority, particularly highlighted by the controversy surrounding the pricing of the "Miracle Youth" project [7][9] - The company has made strategic acquisitions to strengthen its position in the upstream market, including a significant investment in medical device companies [9][10] Group 4: Industry Trends - The medical beauty industry is experiencing a shift towards more standardized and regulated practices, with a growing emphasis on safety and quality as consumer awareness increases [10][12] - The future of the industry is expected to see a rise in both professional doctor-operated clinics and large chain medical beauty institutions like New Oxygen Youth Clinic, promoting a more organized market [12][15]

Core Insights - The 2025 medical beauty industry is expected to show diverse development trends, with various segments demonstrating distinct characteristics [1][5] - Light medical beauty is becoming mainstream due to its minimal trauma, quick recovery, and low risk, attracting many first-time consumers [1][8] - The male medical beauty market is rapidly growing, with 73% of men planning to increase their spending in 2024, focusing on anti-aging and minor adjustments [1][23] - Cross-border medical beauty is booming, with South Korea and Hong Kong being the preferred destinations, accounting for 62% and 45% respectively [1][37] Group 1: Light Medical Beauty - Light medical beauty accounts for 44% in injection and 47% in phototherapy, with a projected compound annual growth rate (CAGR) of 20%-30% over the next five years [1][11] - The primary demographic for light medical beauty is women, making up 89% of the interest group, with 37.5% aged 25-29 [1][14] - Popular procedures include water light needles and photon rejuvenation, with compliance, safety, and efficacy being key consumer concerns [1][18] Group 2: Male Medical Beauty - The male medical beauty market is identified as the "second curve" of industry growth, with significant interest in anti-aging and minor adjustments [1][23] - Social media and workplace scenarios are major drivers for male consumers, with core concerns including nasolabial folds and tear troughs [1][29] - 43% of men plan to increase their medical beauty spending in 2024, indicating a shift in consumer behavior [1][25] Group 3: Cross-Border Medical Beauty - The demand for cross-border medical beauty is projected to reach 26% by 2025, with high cost-effectiveness and professionalism being the main attractions [1][37] - However, concerns about language barriers and difficulties in rights protection remain significant [1][37] Group 4: Youth and Medical Beauty - High school graduates are emerging as a significant consumer group during the summer, with a 245% increase in discussions around "post-exam medical beauty" [2][5] - Popular procedures among this demographic include double eyelid surgery and phototherapy, driven by aesthetic recognition and social media influence [2][5] Group 5: Cross-Industry Integration - Beauty and cosmetics companies are increasingly entering the medical beauty sector, with medical-grade dressings becoming popular entry products [2][5] - The medical device auxiliary market is expected to reach 25.38 billion yuan by 2026, with a CAGR of 30% [2][5]

Core Insights - The medical beauty industry is projected to show diverse trends by 2025, with light medical beauty becoming mainstream, accounting for 52% of the market, driven by its low trauma, quick recovery, and low risk [1][6][9] - The compound annual growth rate (CAGR) for both light medical beauty and injection categories is expected to reach 20%-30% over the next five years, with popular treatments including water light needles and photon rejuvenation [1][10] - The male medical beauty market is rapidly growing, with 73% of men planning to increase their investment, focusing on anti-aging and minor adjustments [1][21][24] Light Medical Beauty - Light medical beauty is characterized by minimal trauma and short recovery times, making it appealing to first-time consumers [8][13] - The interest demographic is predominantly female (89%), with over 60% of interested individuals aged 18-29 [1][14] - Key concerns for consumers include product compliance, safety, and efficacy, with 72.4% prioritizing compliance [16][17] Male Medical Beauty - The male medical beauty market is emerging as a significant growth area, with a focus on natural and youthful appearances [21][24] - Core pain points for male consumers include nasolabial folds and tear troughs, with anti-aging and minor adjustments being the primary demands [28][29] - Social media plays a crucial role in reshaping male beauty perceptions, with a notable increase in male interest in medical beauty [25][31] Cross-Border Medical Beauty - There is a growing trend for cross-border medical beauty, particularly to South Korea and Hong Kong, driven by high cost-effectiveness and professional services [1][34][35] - The proportion of consumers planning to seek cross-border medical beauty services is expected to rise, with 62% favoring South Korea as a destination [35][36] Youthful Trends - The youth demographic, particularly students after high school, is becoming a significant consumer group for medical beauty, favoring procedures like double eyelid surgery and photon rejuvenation [1][6] - The market for medical beauty products is projected to reach 25.38 billion yuan by 2026, with a CAGR of 30% [1][37] Cross-Industry Integration - Beauty companies are increasingly entering the medical beauty sector, with medical-grade dressings becoming popular entry products [1][6] - Companies like Huaxi Biological and Shanghai Jahwa are launching products focused on collagen and hyaluronic acid, indicating a trend towards combining beauty and medical treatments [1][6]

Group 1 - The article highlights the rising consumer interest in "light medical beauty" projects, such as injection and laser treatments, during the summer vacation period, particularly among students [1] - The provincial consumer association advises consumers to verify the qualifications of medical institutions and practitioners before undergoing beauty treatments, emphasizing the importance of checking licenses and registration [1] - There is a warning against the prevalence of "medical beauty loans" and "campus loans," urging consumers to assess their financial capabilities to avoid debt traps [1] Group 2 - In the context of study tours, the provincial consumer association recommends choosing reputable study tour institutions and carefully reviewing contracts in accordance with the newly implemented "Study Tour Service Requirements" [2] - Consumers are encouraged to compare prices of similar study tour products to avoid overpaying and to scrutinize vague promotional claims from institutions [2] - The article stresses the importance of thorough research on training institutions, including evaluating faculty qualifications and course materials, while being cautious of misleading advertising [2]

Investment Rating - The report maintains a "Positive" outlook on the cosmetics and medical beauty industry, highlighting innovative business models driving growth in the light medical beauty sector, particularly recommending attention to the company "Xinyang" [2][9]. Core Insights - The cosmetics and medical beauty sector has underperformed the market recently, with the Shenwan Beauty Care Index declining by 0.1% from July 11 to July 18, 2025, while the Shenwan Cosmetics Index fell by 0.9%, underperforming the Shenwan A Index by 2.3 percentage points [3][4]. - Innovative business models are driving growth in light medical beauty, contrasting with traditional medical beauty institutions facing stagnation due to high costs and weak consumer demand. Xinyang's high cost-performance ratio, chain operations, and app-based customer conversion model are seen as new growth drivers for the sector [9][10]. - The report emphasizes the importance of supply-side innovations in stimulating consumer demand and driving industry recovery, despite short-term macroeconomic challenges [9]. Summary by Sections Industry Performance - The cosmetics and medical beauty sector has shown weak performance compared to the market, with specific indices reflecting declines during the reporting period [3][4]. - The top-performing stocks in the sector included Zhongshun Jierou (+10.8%) and Juzibio (+6.1%), while the worst performers were Shangmei Shares (-11.1%) and Baiya Shares (-4.3%) [5]. Key Company Insights - Linqingxuan, a high-end domestic skincare brand, has seen revenue growth from 690 million yuan in 2022 to 1.21 billion yuan in 2024, with net profit turning from a loss of 6 million yuan to a profit of 187 million yuan [10][15]. - The company has established a strong product matrix and supply chain advantages, with production capacity reaching 40 million units annually [16][17]. - The report also highlights the growth of the "Plant Doctor" brand, which has achieved a net profit CAGR of 24% from 2022 to 2024, supported by a robust channel network and operational efficiencies [10][12]. Market Trends - The report notes a shift in the cosmetics market from quantity to quality, with a significant increase in e-commerce sales, which accounted for 47% of total cosmetics sales in 2024, up from 22% in 2016 [11]. - The domestic market is witnessing a rise in local brands, with a notable increase in market share for domestic products, reflecting changing consumer preferences and the impact of the "national tide" [11][28]. Financial Performance - The report indicates that the overall retail sales of cosmetics in China reached 229.1 billion yuan in the first half of 2025, with a year-on-year growth of 2.9%, although June saw a decline of 2.3% due to promotional timing [21][24]. - The performance of major companies like Meili Tianyuan is highlighted, with projected revenue of at least 1.45 billion yuan for the first half of 2025, representing a growth of at least 27% [24].

Core Insights - A transformation regarding "appearance" is emerging among the youth, particularly after the college entrance examination [1] - The trend of cosmetic procedures is replacing traditional summer activities like driving school and travel, with significant increases in orders for procedures such as double eyelid surgery and teeth whitening [2][5] - The rise in cosmetic procedures among high school graduates is driven by social media and appearance anxiety, with over half of high school students reporting concerns about their looks [3][10] Group 1: Trends in Cosmetic Procedures - There has been a 108% increase in orders for vision correction surgeries in the week following the college entrance exam, alongside a 30% rise in teeth whitening and skin management procedures [8][10] - Medical institutions are experiencing a surge in student patients, with outpatient visits increasing by 10% to 30% and surgical volumes rising significantly during the summer months [7][8] - The trend is expected to peak between late July and August, as students prepare for university [8] Group 2: Psychological Factors - The phenomenon of "spotlight effect" contributes to heightened appearance anxiety among youth, leading to a distorted self-perception and increased worry about looks [10][11] - A survey indicates that 57.03% of high school students experience some level of appearance anxiety, with a higher prevalence among girls (61.85%) compared to boys (47.78%) [11][13] - The pressure from social media and peer comparisons exacerbates this anxiety, creating a cycle of self-doubt and concern about physical appearance [14] Group 3: Market Dynamics - The cosmetic surgery market is becoming increasingly accessible to younger demographics, with marketing strategies targeting students and offering summer discounts [20][21] - Data shows that individuals aged 18 to 24 engage most frequently with cosmetic content, with nearly half of those under 25 expressing interest in cosmetic procedures [21][22] - The trend is also evident in lower-tier cities, where 38.4% of individuals have tried cosmetic procedures, indicating a shift towards a broader consumer base [24][26] Group 4: Shift Towards Light Cosmetic Procedures - The market is seeing a preference for "light cosmetic" procedures that are less invasive and have quicker recovery times, appealing to younger consumers [28][29] - A report indicates that 61.9% of consumers plan to spend less than 10,000 yuan on cosmetic procedures in 2025, reflecting a trend towards budget-friendly options [30] - The focus is shifting from major surgeries to less invasive treatments, which are marketed as effective yet affordable solutions for beauty enhancement [29][32]

Summary of Conference Call Notes Industry Overview - The discussion revolves around the cosmetics industry, specifically focusing on the trend and competitive landscape of collagen protein in cosmetics [1][7][8]. Key Points and Arguments 1. **Sales Performance During 618 Promotion** - The 618 promotion started earlier this year on May 13, compared to May 24 last year, leading to a need for year-over-year comparisons [1]. - Sales data from the first phase of the promotion (up to May 25) indicates a significant impact on brand performance [1]. 2. **Impact of Public Relations Incident on Kofumei** - Kofumei, a leading brand in the fat-free protein segment, experienced a 50% drop in sales on the Sunday following a public relations incident, despite a quick denial from the company [2]. - The initial sales growth target for Kofumei during 618 was 60-80%, but it is now estimated to be only 30% due to this incident [2]. 3. **Marketing and Sales Strategy** - Kofumei's marketing strategy involved leveraging major influencers, with one influencer accounting for 70% of pre-sale sales [3]. - The brand's advertising budget increased by 30% compared to last year, aiming for a top 3 ranking in sales [3]. 4. **Conversion Rate Decline** - Kofumei's conversion rate has dropped below 3, with some estimates as low as 2.5, affecting the effectiveness of their advertising spend [4]. - Negative reviews from influencers are impacting consumer perception and sales [4]. 5. **Overall Market Impact** - The overall sales contribution from the 618 promotion is expected to be around 15-20% of annual sales, indicating that while the short-term impact is significant, the long-term effects may be minimal [5]. 6. **Performance of Other Brands** - Other brands like Keli Jin and Perfect are experiencing strong growth, with Keli Jin expected to achieve over 100% growth and Perfect targeting over 80% growth [6][7]. - Perfect's small gold needle product is also performing well, with a growth rate of 50-60% [6]. 7. **Trends in Collagen Protein Segment** - There is a growing interest among brands to enter the collagen protein market, driven by perceived growth potential [7][8]. - The competitive landscape includes brands like Kofumei, Keli Jin, and Perfect, all of which are focusing on collagen products [8]. 8. **Challenges for New Brands** - New brands may find it difficult to enter the collagen protein market due to high technical barriers and established competitors like Kofumei [9][10]. 9. **Market Growth Projections** - The overall market for collagen products is expected to grow at a rate of over 50%, with increasing participation from major cosmetic brands [10][12]. 10. **E-commerce Strategy Changes** - The strategy for e-commerce platforms like Douyin has shifted, focusing less on low-price strategies and more on brand exposure during the promotion [13][14]. - Sales growth across platforms during the 618 promotion is optimistic, with Douyin reporting a 40-50% increase [15]. Additional Important Insights - The discussion highlights the importance of brand reputation and consumer perception in the cosmetics industry, particularly in the context of social media and influencer marketing [4][10]. - The potential for regulatory changes in response to the recent public relations incident may shape future industry standards [10].