So-Young(SY) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q4 2024, total revenue was RMB 369.2 million, a decrease of 5.5% year-over-year, primarily due to a decline in revenue from So-Young Prime [23] - Net loss attributable to So-Young was RMB 607.6 million, compared to a net income of RMB 17.5 million in the same period last year [27] - Non-GAAP net loss was RMB 53.2 million, compared to a non-GAAP net income of RMB 35.7 million in the same period of 2023 [27] - For the full year 2024, total revenues were RMB 1.47 billion, down 2.1% year-over-year [28] Business Line Data and Key Metrics Changes - Revenue from aesthetic treatment services surged to RMB 81.3 million in Q4, up 701.6% year-over-year, driven by the expansion of the aesthetic center business [23] - Sales of medical products and maintenance services were RMB 86.2 million, down 15.2% year-over-year, primarily due to a decrease in order volume for medical equipment [23] - Total operating expenses were RMB 815.2 million, up 216.2% year-over-year, with significant increases in sales and marketing expenses [25] Market Data and Key Metrics Changes - The total number of verified paid aesthetic treatments surpassed 81,500, with over 38,000 verified paid visits recorded [10] - The aesthetic center network demonstrated strong growth, with 19 clinics opened across nine core cities, and 11 centers achieving positive monthly operating cash flow in December [9] Company Strategy and Development Direction - The company is focused on vertical integration within the aesthetic medical industry, leveraging its user base and supply chain capabilities to drive growth [7][32] - The aesthetic center business is seen as a new growth engine, with plans to replicate successful models across more locations [14] - The company aims to establish a leading position in the market by expanding its aesthetic center network, which currently has a low penetration rate in China [51][52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential of the aesthetic center network, citing the low market share of chain clinics in China [51] - The company anticipates steady improvement in financial performance as market conditions stabilize and the aesthetic center business continues to expand [32] - Management highlighted the importance of maintaining a balance between growth and profitability while enhancing financial resilience [67] Other Important Information - The company recorded a one-time goodwill impairment charge of RMB 540 million for its subsidiary, impacting the bottom line [7] - Cash and cash equivalents, along with term deposits and short-term investments, totaled RMB 1.25 billion as of December 31, 2024, indicating a robust cash position [30] Q&A Session Summary Question: What are the latest developments in merchant support during the industry consolidation period? - Management noted that as industry consolidation accelerates, large chain institutions are gaining market share, and So-Young is optimizing its platform to empower aesthetic institutions and improve user experience [36][37] Question: How does the company adapt its strategies for centers at different stages of development? - Management explained that differentiated operational strategies are implemented at various phases to ensure optimal performance and enhance brand influence [44][46] Question: Can the aesthetic center business maintain growth? - Management affirmed that the aesthetic center network has the capability for sustained growth, citing the low penetration rate of chain clinics in China as an opportunity for expansion [51][52] Question: What is the strategy for the upstream business? - Management discussed the integration of Miracle Laser into So-Young's upstream business, focusing on product innovation and enhancing collaboration to drive sustainable growth [58][60] Question: Could management share more insights into the company's financial outlook? - Management emphasized a commitment to sustainable growth through vertical integration, balancing growth with profitability, and maintaining financial resilience [67]