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01/11 17:40
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals a mix of positive and negative elements. Revenue from aesthetic treatment services has surged, but overall revenue is down, and there's a significant net loss due to goodwill impairment. Operating expenses have risen sharply, impacting profitability. The Q&A shows optimism about growth potential, but management's vague financial outlook raises concerns. The absence of specific guidance and significant losses outweigh positive elements like revenue growth in certain segments, leading to a negative sentiment. The lack of market cap data limits precise impact estimation, but overall sentiment leans negative.
Total Revenue Q4 2024 RMB369.2 million, down 5.5% year-over-year, primarily due to a decrease in revenue generated by So-Young Prime.
Net Loss Attributable to So-Young Q4 2024 RMB607.6 million, compared to a net income of RMB17.5 million during the same period last year, primarily due to a one-time goodwill impairment charge of RMB540 million.
Non-GAAP Net Loss Q4 2024 RMB53.2 million, compared to non-GAAP net income of RMB35.7 million during the same period of 2023.
Aesthetic Treatment Services Revenue Q4 2024 RMB81.3 million, up 701.6% year-over-year, primarily due to the expansion of the aesthetic center business.
Sales of Medical Products and Maintenance Services Q4 2024 RMB86.2 million, down 15.2% year-over-year, primarily due to a decrease in order volume for medical equipment.
Cost of Revenues Q4 2024 RMB153.1 million, up 11.2% year-over-year, primarily due to the expansion of the aesthetic center business.
Total Operating Expenses Q4 2024 RMB815.2 million, up 216.2% year-over-year.
Sales and Marketing Expenses Q4 2024 RMB134 million, up 6.2% year-over-year, primarily due to an increase in payroll costs.
G&A Expenses Q4 2024 RMB98.4 million, up 13.6% year-over-year, primarily due to an increase in professional service fees and allowance for credit losses.
R&D Expenses Q4 2024 RMB42.8 million, down 5% year-over-year, primarily attributable to improvements in staff efficiency.
Impairment of Goodwill Q4 2024 RMB540 million, primarily due to an impairment assessment related to the subsidiary, Miracle Laser.
Income Tax Expenses Q4 2024 RMB2.1 million compared with income tax benefits of RMB10.8 million in the same period of 2023.
Basic and Diluted Loss per ADS Q4 2024 RMB5.92, compared with basic and diluted earnings per ADS of RMB0.18 during the same period of 2023.
Total Revenues Full Year 2024 RMB1.47 billion, down 2.1% year-over-year.
Aesthetic Treatment Services Revenues Full Year 2024 RMB169.3 million, up 1206.1% year-over-year.
Sales of Medical Products and Maintenance Services Full Year 2024 RMB368 million, up 10.3% year-over-year.
Cost of Revenues Full Year 2024 RMB567.6 million, up 4.3% year-over-year.
Total Operating Expenses Full Year 2024 RMB1.52 billion, up 50.1% year-over-year.
Net Loss Attributable to So-Young Full Year 2024 RMB589.5 million compared with a net income of RMB21.3 million in 2023.
Non-GAAP Net Loss Full Year 2024 RMB4.7 million compared with non-GAAP net income of RMB58 million in the fiscal year 2023.
Basic and Diluted Loss per ADS Full Year 2024 RMB5.72, compared with basic and diluted earnings per ADS of RMB0.21 in fiscal year 2023.
Cash Position as of December 31, 2024 RMB1.25 billion in cash and cash equivalents, restricted cash, and term deposits.
Aesthetic Center Revenue: Revenue from aesthetic center business surged to RMB81.3 million during the quarter, up 79% quarter-over-quarter and 702% year-over-year.
New Clinics Opened: 19 So-Young Clinics opened across nine core cities, all fully operational.
Customer Satisfaction: Customer satisfaction remains at an industry-leading 4.98 out of 5.
Verified Paid Visits: Recorded over 38,000 verified paid visits.
Verified Paid Treatments: Total number of verified paid aesthetic treatments surpassed 81,500.
Repeat Customer Revenue: Repeat customer revenue accounted for 88% of total revenue at the Beijing Head Aesthetic Center.
Injectable Solutions: Served over 1,200 medical institutions with injectable solutions, shipping over 52,000 units during the quarter.
Market Expansion: Plans to deepen presence in core cities and replicate aesthetic centers across more locations.
Brand Recognition: Aesthetic centers debuted on various platforms, reinforcing brand recognition.
Operational Efficiency: Maintained customer acquisition cost below the industry average.
Cost Management: Cost of aesthetic treatment services was up 702.3% year-over-year, primarily due to the expansion of aesthetic center business.
Vertical Integration Strategy: Continued investment in self-operated aesthetic center network as part of vertical integration strategy.
Long-term Growth Opportunity: Belief in the emergence of a leading light medical aesthetic chain with over 1,000 locations in China.
Net Loss: So-Young reported a net loss of RMB607.6 million, primarily due to a one-time goodwill impairment charge of RMB540 million for its subsidiary, indicating financial instability and potential challenges in asset valuation.
Revenue Decline: Total revenues decreased by 5.5% year-over-year, with a significant drop in information, reservation services, and other revenues by 27.7%, suggesting competitive pressures and market challenges.
Operating Expenses: Total operating expenses surged by 216.2% year-over-year, indicating rising costs that could impact profitability and financial health.
Customer Acquisition Costs: While customer acquisition costs remain below the industry average, the temporary decline in per capita revenue due to aggressive user acquisition strategies may pose risks to revenue stability.
Regulatory Risks: The company operates in a heavily regulated industry, and any changes in regulations could impact operations and profitability.
Market Competition: The emergence of large-scale light medical aesthetic chains poses competitive risks, as traditional institutions may struggle to maintain market share.
Economic Factors: Economic fluctuations in China could affect consumer spending on aesthetic services, impacting revenue growth.
Vertical Integration Strategy: So-Young continues to undertake its vertical integration strategy, leveraging its extensive user base and upstream supply chain capabilities to drive the rapid expansion of its aesthetic centers.
Aesthetic Center Expansion: In Q4, So-Young opened 19 new clinics across nine core cities, with 11 centers achieving positive monthly operating cash flow.
Customer Acquisition Strategy: The company successfully acquired a large number of verified users through pricing strategies during promotional events, although this led to a temporary decline in per capita revenue.
Long-term Growth Opportunity: So-Young aims to establish a leading light medical aesthetic chain with over 1,000 locations, which would still account for less than 5% of the total market.
Q1 2025 Revenue Guidance: For the first quarter of 2025, So-Young expects total revenues to be between RMB280 million and RMB300 million.
Long-term Strategy: The company remains confident that its long-term strategy focusing on vertical integration will enable it to capitalize on new growth opportunities and drive sustainable growth.
Financial Performance Outlook: With the continuous expansion of aesthetic center businesses and stabilizing market conditions, So-Young anticipates a steady improvement in financial performance.
Share Repurchase Program: None
The earnings call reveals a strong revenue projection for Q3 2025, a strategic expansion plan, and operational efficiency improvements. Despite a net loss, the company shows potential with increased core members and repeat customer revenue. The Q&A section confirmed strategic focus on growth and profitability, with a positive reception to new product launches and compliance measures. The strong revenue growth and optimistic guidance, alongside strategic expansion into high-demand areas, suggest a positive sentiment towards future stock performance.
The earnings call summary shows strong financial metrics, particularly in revenue growth expectations, and a strategic focus on expansion and vertical integration. While there are net losses, management provides optimistic guidance with plans for significant expansion and market share capture. The Q&A highlights management's confidence in market potential and effective cost strategies, with clear responses to analysts' questions. The partnership with SkinCeuticals and focus on proprietary product development further enhance the positive outlook. Despite the lack of market cap data, the overall sentiment suggests a positive stock price movement.
Despite positive aspects like the expansion of aesthetic centers and increased shareholder confidence, the earnings call reveals significant challenges: a sharp decline in total revenues, increased net losses, and competitive and regulatory risks. The Q&A section highlights concerns about CapEx sustainability and vague responses to trade tension impacts. These issues outweigh the positives, leading to a negative sentiment.
The earnings report shows a significant decline in revenue, net income, and an increase in operating expenses. The net loss is substantial due to a goodwill impairment. Despite a strong increase in aesthetic treatment services revenue, the overall financial health appears weak. The Q&A section reveals vague management responses regarding financial outlooks, adding to uncertainty. The lack of concrete guidance and the high operating expenses overshadow the growth in certain segments, suggesting a negative sentiment towards the stock price over the next two weeks.
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