Core Viewpoint - New Oxygen Technology (NASDAQ: SY) is facing a dual challenge of declining revenue and increasing losses, with significant fluctuations in performance over recent years [1][2] Financial Performance - In 2024, New Oxygen's total revenue is projected to be 1.467 billion yuan, a year-on-year decrease of 2.09% - Gross profit is expected to be 899 million yuan, down 5.72% year-on-year - Net loss is anticipated to reach 587 million yuan, with a net loss attributable to New Oxygen International of 590 million yuan [1] Recent Quarterly Results - In Q1 2025, New Oxygen's total revenue was 297 million yuan, a year-on-year decline of 6.6% - Net loss expanded to 33.1 million yuan, a 56.13% increase compared to the 21.2 million yuan loss in the same period of 2024 - Gross margin decreased from 63% in Q1 2024 to 49% in Q1 2025, indicating a significant decline in profitability [1] Business Challenges - The primary reason for New Oxygen's negative revenue growth is the severe impact on its traditional core business, "Information and Appointment Services" - This segment, which accounted for 100% of revenue in 2020, saw revenue drop from 1.151 billion yuan in 2023 to 929 million yuan in 2024, reducing its share to 63.4% - Emerging platforms like Douyin and Xiaohongshu are diverting advertising budgets from medical beauty institutions, while comprehensive platforms like Alibaba Health and Meituan are capturing market share due to their traffic advantages, leading to a significant reduction in the number of subscribed institutions [2]

Core Viewpoint - The company is facing a dual challenge of declining revenue and increasing losses, primarily due to the significant downturn in its traditional core business of "information and appointment services" [2][6][11]. Revenue and Profitability - In Q1 2025, the company's total revenue was 297 million RMB, a year-on-year decline of 6.6%, with net losses expanding to 33.1 million RMB, a 56.13% increase from the same period in 2024 [3]. - The company's revenue experienced significant fluctuations in recent years: 1) 2021 revenue reached 1.692 billion RMB, up 30.7% due to the recovery of the medical beauty industry and acquisitions; 2) 2022 saw a sharp decline of 25.7% to 1.258 billion RMB; 3) 2023 revenue rebounded to 1.498 billion RMB (+19.1%); 4) 2024 revenue slightly decreased to 1.467 billion RMB (-2.1%) [4][5]. - The net profit turned positive in 2023 at 21.28 million RMB but turned into a significant loss of 589 million RMB in 2024, primarily due to goodwill impairment related to a previous acquisition [5] [11]. Core Business Decline - The main reason for the negative revenue growth is the drastic decline in the traditional core business of "information and appointment services," which fell by 19.3% from 1.151 billion RMB in 2023 to 929 million RMB in 2024, now accounting for only 63.4% of total revenue [6][11]. - This core business, which previously constituted 100% of revenue in 2020, has been severely impacted by competition from emerging platforms like Douyin and Xiaohongshu, which have diverted advertising budgets from medical beauty institutions [6][11]. New Business Development - In response to the pressure on traditional business, the company launched the "Brand Aesthetic Center" in 2023, generating revenue of 13 million RMB, which grew to 169 million RMB in 2024 [7][11]. - Despite rapid revenue growth in the light medical beauty chain business, its profitability remains weak, with gross margins of only 22.26% in 2024 and further declining to 18.78% in Q1 2025 [8][11]. Cost and Operational Challenges - The operational costs of the light medical beauty chain business have surged, with costs rising from 9.6 million RMB in 2023 to 132 million RMB in 2024, representing 77.7% of revenue [8][10]. - The company faces challenges in managing the operational efficiency of its new business model, which differs significantly from its traditional medical beauty operations [11].