Investment Rating - The report assigns an "Accumulate" rating for the company, marking its first coverage [2]. Core Insights - In Q2 2025, the company's beauty treatment revenue exceeded guidance, with over 70% of new customers acquired through private channels and referrals [5]. - The company reported total revenue of 378.7 million yuan, a year-on-year decrease of 7.0%, and a net loss of 36 million yuan compared to a net profit of 18.9 million yuan in the same period last year [5]. - The beauty treatment service revenue reached 144.4 million yuan, surpassing the previous guidance of 120-140 million yuan, with a year-on-year growth of 426.1% driven by the expansion of beauty centers [5]. - The company anticipates Q3 2025 beauty treatment service revenue to be between 150-170 million yuan, representing a year-on-year growth of 230.5% to 274.6% [5]. - The company plans to expand its beauty center network to 50 locations by the end of the year, with over 70% of new customers coming from private channels and referrals, resulting in a low customer acquisition cost [5]. Financial Summary - The company forecasts revenues of 1.567 billion yuan, 2.751 billion yuan, and 4.366 billion yuan for 2025, 2026, and 2027 respectively, with year-on-year growth rates of 7%, 76%, and 59% [7]. - The projected net profit for 2025 is a loss of 148 million yuan, followed by profits of 36 million yuan and 134 million yuan in 2026 and 2027, reflecting year-on-year growth rates of 75% and 124% [7]. - The report indicates a significant improvement in gross margin for the beauty treatment business, reaching 24.25% in Q2 2025, an increase of 5.5 percentage points quarter-on-quarter [5].

Financial Performance - New Oxygen (SY.US) reported Q2 revenue of 378.7 million RMB, a year-on-year decrease of 7.0%, exceeding market expectations [1] - The company posted a net loss of 36 million RMB, compared to a net profit of 18.9 million RMB in the same period last year [1] - The loss per ADS was 0.35 RMB, down from a profit of 0.18 RMB per ADS in the previous year [1] Revenue Breakdown - Revenue from beauty treatment services was 144.4 million RMB, a significant year-on-year increase of 426.1% [1] - Revenue from information and booking services was 135.2 million RMB, a year-on-year decrease of 35.6% [1] - Sales from medical products and maintenance services were 76 million RMB, down 28.1% year-on-year [1] - Other service income decreased by 64.0% to 23.2 million RMB [1] User Engagement - The total transaction volume facilitated by New Oxygen's platform for medical beauty was 303.9 million RMB, compared to 427.8 million RMB in the same period of 2024 [1] - The number of active users exceeded 100,400, a significant increase from approximately 16,000 in the previous year [2] - The company operates 29 fully operational brand aesthetic centers across nine major cities, with 25 centers achieving positive monthly operating cash flow [2] Future Guidance - For Q3 2025, New Oxygen expects revenue from beauty treatment services to be between 150 million and 170 million RMB, representing a year-on-year growth of 230.5% to 274.6% [3]