So-Young(SY)2024-08-23 14:50Financial Data and Key Metrics Changes - Total revenue for Q2 2024 was RMB407.4 million, exceeding the high-end of guidance, but down 1.1% year-over-year [13] - Non-GAAP net profit was RMB22.2 million, representing a 43.1% year-over-year increase [4] - Net income attributable to So-Young was RMB18.9 million, compared to a net loss of RMB2.6 million in the same period last year [15] - Basic and diluted earnings per ADS were RMB0.18, compared to losses of RMB0.02 in the same period of 2023 [15] Business Line Data and Key Metrics Changes - Revenue from medical products and maintenance services reached RMB106 million, up 22.6% year-over-year [4] - Information services and other revenues were RMB279.2 million, down 6.6% year-over-year [13] - Reservation services revenues decreased 16.9% year-over-year to RMB22.4 million [13] - GMV for medical aesthetic products and services reached RMB428 million, with over 230,000 verified orders, up around 70% and 80% respectively [7] Market Data and Key Metrics Changes - The number of verified customers increased by 85% quarter-over-quarter, with a repeat purchase rate exceeding 50% [8] - The use of private domains reached 810,000, up 14% quarter-over-quarter [7] - Shipments of the True Lift device exceeded 40,000 units, up 76% quarter-over-quarter and 130% year-over-year [10] Company Strategy and Development Direction - The company is focusing on vertical integration across the aesthetic medical industry to enhance operational efficiency and align with consumer needs [5][12] - Plans to begin franchising clinics in the second half of the year to rapidly expand footprint [9] - The strategy includes leveraging high-quality institutional partners and refining operations to strengthen competitive advantage in the mid-to-high-end market [6][12] Management Comments on Operating Environment and Future Outlook - Management noted a slowdown in consumer spending but highlighted ongoing growth in the medical aesthetic market [20] - The company anticipates that leading chains will dominate the market over the next four to five years, creating new opportunities for growth [21] - Despite macroeconomic challenges, the company remains confident in its long-term growth potential [11][17] Other Important Information - Total operating expenses were RMB245.6 million, down 13% year-over-year [14] - Cash and cash equivalents, along with term deposits, totaled RMB1.25 billion as of June 30, 2024 [16] - The company expects total revenues for Q3 2024 to be between RMB350 million and RMB370 million [16] Q&A Session Summary Question: Overall trend and consumer behavior in H2 2024 - Management acknowledged a slowdown in consumer confidence but noted that the medical aesthetic market continues to grow, driven by demand for minimally invasive services [20] Question: Outlook for the POP business - The POP business is crucial for growth, focusing on both standardized and non-standardized treatments to meet diverse consumer needs [24] Question: Factors affecting clinic chain expansion - Management identified site selection, staff recruitment, and marketing costs as key factors but noted improvements in opening efficiency [28] Question: Differentiation in the upstream sector - The company leverages its unique ecosystem to create synergies and enhance market competitiveness, setting it apart from traditional manufacturers [36] Question: Expected trend for gross margins - Management expects gross margins to be impacted in the short term due to the expansion of clinics and medical product sales, but improvements are anticipated as operations mature [40]