Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 37.36 [1] Core Insights - The company achieved a revenue of CNY 3.001 billion in 2025, representing a year-on-year increase of 16.7%, and a net profit attributable to shareholders of CNY 318 million, up 39.0%, which aligns with expectations [6] - The company continues to show strong fundamentals with a same-store sales growth of 6.9% and a robust cash flow of CNY 2.59 billion, reflecting a year-on-year increase of 41.6% [6] - The company is positioned as a leader in the beauty and health chain service sector, benefiting from a dual growth strategy of organic growth and acquisitions [6] Financial Performance - Revenue projections for 2026 and 2027 have been revised upwards to CNY 3.915 billion and CNY 4.315 billion, respectively, reflecting increases of 30.49% and 10.21% [10] - The net profit forecast for 2026 and 2027 has also been adjusted to CNY 415.26 million and CNY 533.94 million, indicating growth rates of 30.76% and 28.58% [10] - The company’s gross margin improved to 49.1% in 2025, up 2.8 percentage points year-on-year, driven by cost optimization and acquisitions [8] Business Segments - The beauty and wellness services segment generated revenue of CNY 1.658 billion in 2025, with a year-on-year growth of 14.9% [7] - The medical beauty services segment reported revenue of CNY 1.017 billion, reflecting a year-on-year increase of 9.6% [7] - The sub-health medical services segment saw significant growth, achieving revenue of CNY 326 million, up 62.2% year-on-year [7] Valuation Metrics - The company is projected to have a PE ratio of 19 times for 2026, reflecting its leading position in the beauty chain sector [10] - The expected dividend yield for 2026 is 4.41%, indicating a commitment to returning value to shareholders [5]

Core Viewpoint - The company aims to accelerate the upgrade of its core business over the next two years, focusing on optimizing commercial site selection and enhancing service quality to maintain a competitive edge in the medical beauty industry [2][4]. Financial Performance - In 2025, the company achieved a revenue of RMB 3 billion, representing a year-on-year growth of 16.7%. The net profit reached RMB 340 million, a significant increase of 34.8%, with adjusted net profit at RMB 381 million, up 41.0%, and an adjusted net profit margin of 12.7% [2]. - The operating cash flow for 2025 was RMB 1 billion, showing a substantial growth of 25.4%. As of December 31, 2025, the company's cash and cash-equivalent assets totaled RMB 2.59 billion, reflecting a net increase of 41.6% [2]. Dividend Policy - The board proposed to maintain a high dividend payout ratio, distributing 50% of the 2025 net profit attributable to shareholders, amounting to HKD 0.72 per share, which is a 38.5% increase year-on-year [2]. Industry Trends - The medical beauty industry is entering an "era of product selection," with a significant increase in compliant products and improved supply shortages. Consumers are now seeking unique, high-quality services rather than standardized solutions [4]. - The company reported a revenue of RMB 1.017 billion from its medical beauty segment in 2025, a growth of 9.6%, with a gross margin increase of 3.6 percentage points to 55.9% [4]. Strategic Initiatives - The company is focusing on a differentiated positioning strategy to expand its leading advantage, emphasizing technology and service quality rather than engaging in price wars [4]. - The company has deepened collaboration with 150 expert doctors to integrate clinical experience with cutting-edge aesthetic systems, resulting in over 150 patent applications to establish technical barriers in professional medical beauty services [5]. Integration and Business Upgrade - Following the acquisition of 100% equity in a competitor, the company initiated a systematic integration process, prioritizing platform integration, followed by consumer medical support, and finally refining core business operations [7][8]. - The company plans to optimize the commercial site selection for approximately 20 stores by entering higher-quality business districts to enhance brand influence in cities [8]. - An upgrade of the experience system is underway, aiming to create a new lifestyle and sanctuary for high-end clients, with the first phase of upgrades involving over 50 categories and scenarios set to launch in late April [8].

Investment Rating - The investment rating for the company is "Buy" (maintained) [3] Core Views - The company's performance in 2025 met expectations, and there is anticipation for a recovery in 2026 [3] - The company achieved total revenue of 5.52 billion RMB in 2025, a slight decrease of 0.37% year-on-year, with a net profit of 1.91 billion RMB, down 7.15% year-on-year [6] - The company is focusing on product iteration and expanding its product matrix, particularly in the medical beauty sector, which is expected to drive long-term growth [6] - The company has established a strong market position in the medical device sector and is expanding its product offerings to include various skincare solutions [6] Financial Summary - Revenue projections for 2026 are estimated at 6.07 billion RMB, with a year-on-year growth rate of 9.9% [4] - The projected net profit for 2026 is 1.98 billion RMB, reflecting a growth of 3.4% year-on-year [4] - The company's gross margin is expected to remain strong at approximately 79.3% in 2026 [7] - The company maintains a low debt-to-equity ratio of 8.45%, indicating strong financial health [6]

Financial Data and Key Metrics Changes - Total revenue for Q4 2025 reached RMB 461 million, representing a year-over-year increase of approximately 25% [3][20] - Net loss attributable to So-Young was RMB 108.8 million, an improvement from RMB 607.6 million in the same period of 2024 [27] - Basic and diluted loss per ADS improved to 1.08 compared to 5.92 in the same period of 2024 [27] Business Line Data and Key Metrics Changes - Revenues from the aesthetic center business reached RMB 248 million, up over 205% year-over-year, becoming the largest revenue segment [4][21] - Information and reservation services revenues were RMB 125.7 million, down 26.8% year-over-year [24] - Sales of medical products and maintenance services revenues were RMB 69.3 million, down 19.9% year-over-year [24] Market Data and Key Metrics Changes - As of year-end 2025, So-Young operated 49 clinics across 15 major cities, with a net addition of 10 centers during the quarter [23] - Verified treatment visits exceeded 125,000 in Q4, up 178% year-over-year [4] - Total active users surpassed 170,000 by the end of December 2025 [5] Company Strategy and Development Direction - The company aims to shift from a scale-first approach to a dual engine of scale and efficiency in 2026, focusing on profitability alongside expansion [17] - Plans to open at least 35 new centers in 2026 while improving growth margins and driving efficiency gains across the network [28] - Continued investment in enhancing medical service delivery capabilities and building a long-term trust-driven moat [8][10] Management's Comments on Operating Environment and Future Outlook - The management noted that the medical aesthetic industry is shifting back to a rational, quality-driven path, with a focus on delivering trusted services [17] - The company expressed confidence in the sustained momentum of its branded aesthetic center business, expecting aesthetic treatment services revenues to grow significantly in Q1 2026 [28] - Management emphasized the importance of user trust and the ongoing recognition from consumers as foundational for sustainable growth [11] Other Important Information - The company has established a six-pillar compliance framework and achieved PIA certification for data security, setting a benchmark in the industry [10] - The average annual spending of core members is around RMB 16,500, with an 80% return rate among core members [11] Q&A Session Summary Question: Gross margin prospects and plans for further margin expansion - Management highlighted three core factors shaping margin performance: pace of center openings, consumable costs, and seasonal promotions [31][32] Question: Development of So-Young Clinic in second-tier cities - Management confirmed that centers in second-tier cities are performing well, with revenue per center approaching first-tier levels [36][38] Question: Customer acquisition costs and strategy for 2026 - Management stated that customer acquisition costs remain below 10% of revenue, with strategies focusing on customer referrals and co-branding initiatives [41][42] Question: Measures to improve the lifetime value (LTV) of core members - Management plans to expand the product portfolio and optimize the membership system to enhance core members' perception of brand value [44][47]

Investment Rating - The investment rating for the company is "Buy" [6] Core Insights - The company is experiencing a transitional period in its product matrix, leading to a decline in performance. Revenue for 2025 is projected at 2.45 billion, down 19% year-on-year, with net profit expected to be 1.29 billion, a decrease of 34% [1][4] - The company is focusing on new product launches and international expansion as key growth drivers, particularly with the upcoming release of new products such as botulinum toxin and minoxidil, alongside the integration of acquired products from the Korean company Regen [4][5] Financial Performance - For 2025, the gross margin, net margin, and adjusted net margin are projected to be 92.7%, 53.1%, and 44.8%, respectively, reflecting declines of 1.9 percentage points, 11.6 percentage points, and 17.1 percentage points year-on-year [2] - The sales expenses have significantly increased due to personnel expansion and higher marketing costs, impacting overall profitability [2] - Revenue breakdown shows that solution and gel products are still in an adjustment phase, with both categories experiencing declines in revenue and sales volume [3] Future Projections - Revenue is expected to recover to 2.91 billion in 2026, with a growth rate of 18.6%, and further increase to 3.54 billion by 2028, with growth rates of 10.5% and 10.3% in subsequent years [4][5] - Net profit is projected to reach 1.47 billion in 2026, with a year-on-year growth of 13.4%, and continue to grow to 1.83 billion by 2028 [5] Market Position - The company is actively expanding its global sales network and has received regulatory approvals for its products in multiple countries, indicating a strong commitment to international market penetration [4]

Investment Rating - The investment rating for the company is "Buy" [3][12]. Core Insights - The company is experiencing a phase of performance pressure, with a focus on both internal growth and external acquisitions to build long-term growth momentum [1][9]. - In 2025, the company reported a revenue of 2.453 billion yuan, a year-on-year decrease of 18.94%, and a net profit attributable to shareholders of 1.291 billion yuan, down 34.05% year-on-year [8][10]. - The company is expanding its product matrix and therapeutic areas, with new product launches and acquisitions aimed at enhancing its competitive edge and international presence [9]. Financial Performance Summary - Revenue projections for the company are as follows: 2024A: 3.026 billion yuan, 2025A: 2.453 billion yuan, 2026E: 2.793 billion yuan, 2027E: 3.084 billion yuan, 2028E: 3.389 billion yuan [2][10]. - The net profit attributable to shareholders is projected to be: 2024A: 1.958 billion yuan, 2025A: 1.291 billion yuan, 2026E: 1.453 billion yuan, 2027E: 1.618 billion yuan, 2028E: 1.802 billion yuan [2][10]. - The earnings per share (EPS) are expected to be: 2024A: 6.47 yuan, 2025A: 4.27 yuan, 2026E: 4.80 yuan, 2027E: 5.34 yuan, 2028E: 5.96 yuan [2][10]. - The price-to-earnings (P/E) ratio is projected to be: 2024A: 18.94, 2025A: 28.72, 2026E: 25.52, 2027E: 22.96, 2028E: 20.58 [2][10]. Operational Analysis - The revenue breakdown for 2025 shows that solution injection products generated 1.265 billion yuan (down 27.48%), gel injection products 890 million yuan (down 26.82%), and freeze-dried powder products 208 million yuan [8]. - The gross margin for the company in 2025 was 92.7%, a decrease of 1.94 percentage points year-on-year [8]. - The company is increasing its investment in sales and R&D, with expense ratios for sales, management, and R&D rising to 15.77%, 7.44%, and 14.67% respectively [8]. Future Outlook - The company is focusing on both internal product development and external acquisitions to drive growth, with new product launches and the acquisition of REGEN to enhance its international market presence [9]. - The company is expected to continue expanding its product offerings and therapeutic areas, which will provide new growth drivers in the medium to long term [9].

Investment Rating - The investment rating for the company is "Buy" [6] Core Views - The company is experiencing a transitional period in its product matrix, leading to a temporary decline in performance. Revenue for 2025 is projected at 2.45 billion, down 19% year-on-year, with net profit expected to be 1.29 billion, a decrease of 34% [1][4] - The company is focusing on the launch of new products and expanding its overseas market presence as key growth drivers. Notable upcoming products include the Zhenai Su Fei Tong Yan injection and Minoxidil, which have received regulatory approval [4][5] Financial Performance - Revenue and profit metrics for 2025 indicate significant declines, with a projected revenue of 2.45 billion and a net profit of 1.29 billion, reflecting year-on-year decreases of 19% and 34%, respectively [1][5] - The gross margin for 2025 is expected to be 92.7%, down 1.9 percentage points year-on-year, while the net profit margin is projected at 53.1%, a decline of 11.6 percentage points [2][5] - Sales expenses have increased significantly due to personnel expansion and marketing costs, impacting overall profitability [2][3] Product Segmentation - The company's solution and gel products are currently in an adjustment phase, with revenues for 2025 expected to be 1.265 billion and 890 million, both down 27% year-on-year. The average selling price (ASP) for these products has also decreased [3] - The freeze-dried powder segment, bolstered by the acquisition of Korean Regen, is expected to contribute 210 million in revenue for 2025 [3] Future Projections - Revenue forecasts for 2026 to 2028 are optimistic, with expected revenues of 2.91 billion, 3.22 billion, and 3.55 billion, representing year-on-year growth rates of 18.6%, 10.5%, and 10.3%, respectively [4][5] - Net profit projections for the same period are 1.47 billion, 1.62 billion, and 1.83 billion, with corresponding growth rates of 13.4%, 10.9%, and 12.5% [4][5]

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected investment return exceeding 15% compared to the CSI 300 index [3][12]. Core Insights - The company experienced a significant decline in performance in 2025, with revenue of 2.453 billion yuan, down 18.94% year-on-year, and a net profit of 1.291 billion yuan, down 34.05% year-on-year [8][9]. - The revenue decline is attributed to macroeconomic pressures and intensified industry competition, particularly affecting core products [8]. - The company is focusing on both organic growth and external acquisitions to drive long-term growth, with new product launches and strategic acquisitions enhancing its market position [9]. Financial Performance Summary - Revenue projections for the upcoming years are as follows: 2024A: 3.026 billion yuan, 2025A: 2.453 billion yuan, 2026E: 2.793 billion yuan, 2027E: 3.084 billion yuan, and 2028E: 3.389 billion yuan [2]. - The net profit forecasts are: 2024A: 1.958 billion yuan, 2025A: 1.291 billion yuan, 2026E: 1.454 billion yuan, 2027E: 1.618 billion yuan, and 2028E: 1.802 billion yuan [2]. - The earnings per share (EPS) are projected to be 6.47 yuan for 2024A, 4.27 yuan for 2025A, 4.80 yuan for 2026E, 5.34 yuan for 2027E, and 5.96 yuan for 2028E [2]. Operational Analysis - The company's gross margin for 2025 was reported at 92.7%, a decrease of 1.94 percentage points from the previous year [8]. - The sales expense ratio, management expense ratio, and R&D expense ratio for 2025 were 15.77%, 7.44%, and 14.67%, respectively, indicating an increase in overall expenses [8]. - The company is expanding its product matrix and therapeutic areas, with new product launches expected to contribute to future growth [9]. Strategic Outlook - The company is enhancing its international presence through acquisitions, such as the purchase of REGEN, which adds new products to its portfolio and strengthens its distribution channels [9]. - The report emphasizes the importance of monitoring the approval progress of new products and the integration of overseas operations as key factors for future growth [9].

Financial Data and Key Metrics Changes - For the full year 2025, revenue was $365.3 million, representing a 4.7% year-over-year growth, primarily driven by double-digit international expansion, particularly in APAC, which grew by 26.9% [5][14] - Gross profit for 2025 was $215.1 million, with a gross margin of 58.9%, down from 62.1% in 2024, attributed to shifts in geographic and product mix and new import tariffs [17] - Adjusted net profit for 2025 was $31 million, up 7.9% year-on-year, with an adjusted net profit margin of 8.5%, reflecting disciplined cost management and efficiency gains [17] Business Line Data and Key Metrics Changes - Energy-based devices (EBD) revenue was $310.4 million, representing 85% of total revenue, essentially flat year-on-year, supported by strong demand for Alma Harmony and Alma Hybrid platforms [14][15] - Injectable revenues reached $28 million, up 185.6% year-on-year, reflecting significant diversification due to Profhilo's momentum and broader adoption by practitioners [15] Market Data and Key Metrics Changes - North America revenue was $111 million, down 19.2% year-on-year, impacted by weakened macroeconomic conditions and softer consumer demand [14] - International markets, excluding North America, grew 20.1%, led by Asia-Pacific, which rose 26.9% year-on-year, serving as the primary growth engine [14] Company Strategy and Development Direction - The company is focused on building a broader ecosystem that integrates technologies, diagnostics, injectables, and digital capabilities to adapt to evolving market demands [3][4] - Plans for 2026 include strengthening the flagship device portfolio, expanding the global energy-based device offering, and introducing additional EBD solutions in Thailand [7][10] - The company aims to capture long-term growth opportunities in the global medical aesthetics market while maintaining operational discipline in North America [11][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the new executive team and their ability to lead the company with a focus on execution, operational discipline, and long-term value creation [4] - The company anticipates a recovery in the U.S. market in 2026, contingent on improvements in macroeconomic conditions and interest rates [49] Other Important Information - The company completed a structured leadership transition and is committed to balancing reinvestment for sustainable growth with shareholder value retention [4][17] - R&D spending was $16.9 million in 2025, reflecting ongoing investments in clinical programs and next-generation products [16] Q&A Session Summary Question: What specific measures are being taken to cut down the sales and marketing expense ratio? - Management indicated that proactive measures were taken to drive efficiency, resulting in reductions in sales and marketing expenses while still investing in strategic projects like DAXXIFY [20][21] Question: Can you provide an update on the company's R&D pipeline and expected clinical progress? - The company plans several launches in 2026, particularly in the hair growth segment, and is also assessing additional products for future opportunities [24][25] Question: What is the sales strategy for energy-based devices in China for 2026? - The company aims to maintain its dominant position in China and leverage synergies across different business segments to drive growth [28][29] Question: What are the plans for the commercialization of DAXXIFY this year? - The company has a capacity of 100,000 units for DAXXIFY and plans to target high-value clinics initially, with positive feedback received so far [34][35] Question: What is the strategic roadmap for 2026 and key growth drivers? - The strategy focuses on creating an ecosystem to provide more value to practitioners and enhance brand strength, with a strong emphasis on energy-based devices and hair growth solutions [38][40] Question: What are the underlying reasons for the softness in the U.S. segment and the potential for recovery? - Management noted that the decline was primarily due to macroeconomic conditions, but they are optimistic about recovery in 2026 with improved economic indicators [46][49] Question: What is the progress on AI-enabled products and the impact of geopolitical issues? - The company is leveraging partnerships for AI technologies and has maintained operational capacity despite geopolitical challenges, although there are impacts on shipping costs [56][58]

Disclaimer Sisram Medical 2025 Annual Earnings Presentation Stock Code: 1696.HK 2 2025 Snapshot Revenue US$ 365.3 M +4.7% YoY Revenue from APAC Revenue from Injectables US$ 147.4M +185.6 % YoY +26.9% YoY US$ 28.0 M International Markets (Excl. NA) US$ 254.3 M +20.1% YoY Gross Profit Margin 58.9 % - 3.2 p.p. YoY Adjusted Net Profit Margin 8.5 % +0.3 p.p. YoY 1 3 Global Expansion at A Glance Reinforcing our leadership across core and emerging markets, as we continue to scale globally with focus and agility Di ...