So-Young International (SY) 28 May 242024 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by for So-Young's First Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, today's conference is being recorded. I would now like to turn the conference over to your host for today's call, Ms. Mona Qiao. Please go ahead, ma'am.

thank conference for call. and quarter So-Young's operator, earnings XXXX you, you, joining everyone, first Thank

Mr. Please Joining Litigation and Mr. will harbor co-Founder, and provisions Xing XXXX. today contain Reform Jin, Zhao, me on under U.S. our Act Chairman, the forward-looking statements of and of the discussion the that the the note call made is Nick today CFO. safe CEO; Securities Private

materially cause are our subject and actual report outlining those to Potential with results annual and current from may including Form filings SEC, risks are differ statements expectations. Forward-looking not but alternatives to our risks include, XX-F. public on our that to, alternatives limited

law.At over to turn undertake does obligation this any to any I'd applicable So-Young update the Jin. like Mr. to statements, except Xing call forward-looking not time, as under required

[Interpreted] Thank today. joining the Hello, call you everyone. for

first well the first that our XXX.X non-GAAP upper the quarter. exceeding performed the in business profitability we same Our this with the the RMB reaching X in total years million, time in At time, of revenues end achieved quarter, guidance. first marks

new continue Our with and maternity grow revenue services businesses increased rapidly, year-over-year. medical self-serve XX.X% from to products

continues Prime diversify to upstream offerings, while its So-Young Our of pipeline maintains products development. healthy further

of products that cost [ with aesthetic will ] practitioners. the at to which significant of We our clinics also medical notable post quarter, clinics. value price industry. In consumers unit development served we made the steady by of efficiencies This in the a medical driving with efficient of increased progress aesthetical cumulative have allocation all of restructure and first headway our quarter, area made above integration We've first X advantage. at opened services expansion sustainable help the chain average more XX% from industry clinics, in clients vertical of and are In [indiscernible] quarter-over-quarter. pricing the well operations provide system institutions,

going of as platform, continued in advantage able also institutions, are strategy segment, within and and the initiatives, only In profits. we in of we our So-Young high-end to confident our these solidify market. to us progress we made users, terms premium products, forward.In for POP not steady high-value opportunities differentiated to advantage By institutions customer-sized serve we services, in are boasting but the the offering assist their our segment growth

value the increased by year-over-year. quarter, order our XX.X% During

leverage and of user a focused terms we instead returning and acquisition, our outside from ROI our and our on traffic engagement, away low base the In target reallocated online So-Young user efficiency. of within monetization channels various cultivating channels to domains. We platform within budget private enhance and aiming improve

we in private So-Young the to quarter, this in at clinic in of domains success chain towards Prime, our users Beijing by a of XX.X% opened the the a first As momentum, model we of headquarters we increased our from institutions quarter-over-quarter.Turning clinics. partner latter establishing the required upon half on Building strategy capitalized transition result, through XXXX. accelerated

made an to on open and operations operations. clinic clinics. of the surpasses we this efficiently This a repurchase commence at for us covering rollout average everything with exceptionally for user user of of workflow over the quick new each we every clinics.To X ever-increasing significantly have at Prime the record continues evaluation selection satisfaction, to So-Young end site industry plan recap have time, chain high our month, increasing clinics expand that expect Elravie I nationwide, in and distribution and garner just to same of the By and industry and the standardized this agency year-over-year. starting X a expand X that month continue the brand self-channels. grow to system, from quarter, We opening through institutions institution X provide set the pace will Sales has In comprehensive During the of X.X strongly covers a batch an with to At cities. core quarter, upstream XXX direct with over firmly mature for of supply we established our X operations XX% process we third satisfaction network to to out established opened our clinics, rate.Lastly, a both chain of transition, year, Korea track. of business. enabled we drive have and

among strength anti-aging word-of-mouth Our the diversified has exceeding portfolio, sales device, a of further how our product testament with and The recent is market non-surgical launch of far and bring to brand, institutional potential rapidly immense recognition ultrasound medical positions through markets this [indiscernible], our aesthetics in the expectations. to recognize of expansive products new demonstrate our a to growth their product quickly success consumers are market. network.We to for China's able secure

still However, industry X the perception its contains development public past a decades. despite over the less-than-[indiscernible]

tens institutions that injection be many this to costs issues. sold as the struggle HA such thousands, for within Reality sector a to structural profit. turn RMB can a of points While

value an integrating services. these aesthetical more of So-Young the drive the the we with better cost-effective to aim and greater call turn long-term industry, by now midstream, sustainable your to to quarter review taking increase This platform, and to By shareholders.I questions. medical designed CFO, profit issues results revenue establishing for industry financial will and medical the while reduce fundamentally this the efficiency, growth will consumers to before and platform. provide Nick, for ultimately resources our over delivering upstream, and aesthetic address costs is downstream approach our

RMB expenses to the to support and RMB Total other of year-over-year, for of payroll Please for all in attributable an enhancement the expenses of to same RMB. our new million, RMB Please of net cost performances Cost medical million, with income RMB core period be of and million, loss revenues XX and was in XXXX. sales Growth due X.X primarily were shareholders sales million X.X up our X.X XXX.X the commission was benefits a RMB our end loss volume million slight ordinary be increase million, basis. release million income to decrease subsidies. due attributable in So-Young by our per X.XX and Nick. attributable the compared efficiency. shareholders diluted XX.X X.X attributable guidance. primarily XX.X and increase team. amounts sales the net X.X% primarily expenses and the So-Young year-over-year, in detailed net compared X.XX, service Net respectively, costs during per financial of down ordinary to sales rates the employee of quoted year-over-year, which with of increase Income due X.X% RMB XX.X million RMB and to attributable were period million, million, increased loss with policy by RMB to net XX.X of million So-Young RMB of change an to and year. losses during in X.X% of to exceeding of the XX.X XX.X costs decreased ADS RMB others RMB products Hello. comparative compared attributable primarily and RMB Basic diluted and were loss expansion with to primarily with RMB RMB RMB XXXX. RMB benefits cost were revenues Sales XX.X% the to ADS X.XX, and costs million, same XXX.X basic XX.X% last with year-over-year, a of revenues to deposits, associated medical and billion deposits have short-term on driven due This medical marketing effectively XXXX, were XX.X% XX, year-over-year, employees increased with Within year-over-year of XX% were with the Net a XXX.X and same of down non-GAAP year-over-year flat to equivalents, XX, RMB driven a investments, million X.XX earnings cosmetic XX.X refer up Total RMB cosmetic revenues, million, medical information also compared the maintenance expansion of here products services when cash services, as year-over-year. respectively, X.X million, of will RMB Reservation improvements services operating payroll equipment. period cosmetic during high totaling associated strategic with RMB the Information year-over-year, were were X.X% decrease products costs.Cost period cash expenses tax robust same December up primarily compared up term to revenues maintenance increase our XX.X% cash a RMB that and March and year-over-year RMB restricted payroll associated of equipment. term sold the of products quarter reminded up is were XXX.X and an associated primarily million, and were in position due G&A tax XXX.X in medical businesses.R&D with million, to year-over-year, services was primarily of of XXXX. year-over-year. costs maintained due products X.X% up XXXX.We administrative non-GAAP were X.X% marketing cash to equipment.

The Operator, call million For operator between RMB will million. preliminary the that current conditions the market now RMB and the above XXX total remarks. customer outlook company's based the and the for expect I estimates we demand.This to Q&A. be concludes XXX open [ questions. are is conditions we of ready second quarter take market and our the call operating and reflect on revenues of to key the ] turn to XXXX,

question Chloe first from CICC. The comes have Instructions] Wei we [Operator of

The ahead of myself, translate result. let Language] [Foreign So on me was first our top-line the solid quarter expectation. congrats

remarks, our turned full-year question is we the believe [indiscernible] got my from So positive. prepared From more has outlook. about the what I

with our the how maybe think management top-line should given us? we the macro, full-year to there So want trend some about is share And headwinds growth? from and

in [Interpreted] industry the of observation expectation is our Developments the line year. at first quarter, beginning on with in medical aesthetics and the

market. aesthetics the gradually recovering consumption medical First, with market is the overall Chinese

quarter. consumption As of X.X% first goods retail gradual data aesthetics increased Medical trend. reflected in a sales growth by year-over-year also has the in consumer China

demands will medical with diversified. the based are XXXX, to low existing prices, It's our clients required more maintain to to as we differentiated high-quality simply on business. strategies to mature, group and difficult tends Second, services aesthetics user enriched more user our attract user products are demand.In cater

channels efficiency. services to and distribution and consumers. superior optimize supply will to a integrates and strategic fundamentally deliver cost cost-effective midstream that's us enable enhance to We establish This approach more operations platform will upstream vertically downstream chains,

The next of from [indiscernible] have comes Securities. we CITIC question

questions. X Just Language] [Foreign

advantages is, of First intensified should different how And MAU? traditional traffic the a business this -- in competition? as what consider decline metrics such

of [Interpreted] are traffic, In competition experiencing traffic. online for industries all intensified terms

we So-Young emphasized our connect advantages. boost pool our of have online user domains, effectiveness channels traffic resources.In community stable. rate engagements. content help can private private app, were placement part core our orders, strive ROI for profits.Thirdly, it to It testaments to of and operation traffic and recent domain attract remained app operations. this of in sources, peers, budget terms has traffic So-Young we We of self-media the transition platform.Compared and our of engagement traffic it with This extensive with to reduced But costs competitive with and For there strategy. from such to costs through traffic accuracy data and enhance retention to further It GMV -- continue third-party user organic reduce in of ROI, more basically increased increase reflects margins addition, cooperation expanding reflected its lower and low private we X as as also data and placement judging MAU. not domain we is

First, a and high order volumes. we users high-quality have average,

transportation face-to-face us innovation.For chain for greater and medical So-Young from including benefit offline with doctors users' institutions, communication increased hospitals, our consultations also own surgical invite we Centralized provide shared and which consultations time multiple users clinics and save customers, renowned to organized participate. we efficiency. room help Second, decision-making offline aesthetic and costs

power service manner, over we For contract avoiding risk and user closed-loop process, control on the price while customers, conducting high-end deliveries cooperative approach, have doctors user commanding delivery institutions. thus our platform this in a injection and simultaneously fulfillment screen operations within or and the we high-quality of refined stronger With complete attrition. own the

question have next from Yibing The comes of we Haitong.

I with in So-Young [Foreign midterm for expectation? is want to the proprietary the Language] the the line your long-term My ask So-Young current progress new on Prime. question chain is opening to And your clinics? Prime clinics what's plans of about

the then, We beginning XX [Interpreted] By to open at quarter, planned the the of XXXX year. first in more clinics we we X X before opened the clinics. of added earnings. today's end Since

have a in operations. the a workforce line established expand to process, in are all system, site us generally and selection we evaluation at and standardized everyday we cost for the everything with client aesthetical X transparency, average pace aim that and choice opening of Now, cosmetic This new on services has our light record opening consumption. to covering clinics.Emphasizing the position industry expectation.During authentic products, to comprehensive significantly enabled clinics and rollout standardized from set as surpasses industry an is and first of our medical performance

of years.While we our the development continue the expanding product XXX our expect our to team, combining of clinics next We in reach in clinics, X scale to to supply, chain build operation advantages and innovation. XXX

improve proprietary chain and users of With mind, XX% unit clinics management April, per to per our the satisfaction for efficiency satisfaction. of for more fundamental online penetration User line end-to-end as an institutions.In system that of increase aesthetics with of of providing in our future, management light area to with operating and out efficiency more in build margin management for chain clinics while to institutions reached our expectations. standardized will clinics, and emphasized cost-effective We improve as satisfaction our January our user chain to efficiency products, a are driving on staff chain process the services. supply medical user From is continue we well we chain in capabilities improve operation.

we Jefferies. have of question next from The Joey comes Chan

[Foreign I Language] X And have questions.

be can the usage? billion. for chain the your And of first The will supply upstream RMB the management reserves planned is; question on X.X share question progress is What [indiscernible] second with cash business?

side, On XX.X% quarter. with increasing [Interpreted] increased and strong momentum, first Huawei revenue year-over-year in XX% sales the product maintained first year-over-year

of increase to spent diversifies strength a network expand and just face integrate a supply sound future, of to the to to product of upstream In direct is far pipeline. products cost brand, addition, category to mature win-win launch expansive recognition products help users covering situation.Second, chain establish agencies consumers photo-electric [indiscernible] sales reaching with channels. The In rapidly we to are our we return X will to both year and among quickly and secure continue distribution continue market the how position our to able This our bring companies demonstrates institutions further new institutional XXX of our lift performance, their we exceeding network. expectations. through profit and our product with testament word-of-mouth to market we

continuously We revenue chain generate expect growth business. the to and supply add more profit products and incremental from

This [Foreign I is will Nick. translate. Language]

We will the use purposes. cash for X

downstream will Thank return industry, of First all, the will plan you. of we chain we downstream share secondly, ground platform. continue solid our and product expanding along shareholders. dividend upstream pipeline values to industry for and upstream or And potential to repurchase lay clinics integrated including our to

today. and Thank of you, you we have Ladies sir. end reached and session Thank the question-and-answer joining our our for us gentlemen, conference.

You may now disconnect your lines.