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01/11 17:39
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Total Revenues RMB297.3 million, down 60.6% year-over-year, primarily due to a decrease in the number of medical service providers subscribing to information services on our platform.
Aesthetic Treatment Services Revenues RMB98.8 million, up 551.4% year-over-year, primarily due to the expansion of our aesthetic center business.
Sales of Medical Products and Maintenance Services RMB55.6 million, down 35.7% year-over-year, primarily due to a decrease in order volume for medical equipment.
Cost of Revenues RMB151.4 million, up 29.1% year-over-year, primarily due to the expansion of our aesthetic center business.
Cost of Aesthetic Treatment Services RMB80.3 million, up 547.6% year-over-year, primarily due to the expansion of our aesthetic center business.
Total Operating Expenses RMB189.3 million, down 20.4% year-over-year.
Sales and Marketing Expenses RMB103.4 million, down 8.7% year-over-year, primarily due to a decrease in expenses associated with branding and user acquisition activities.
G&A Expenses RMB53.7 million, down 36.7% year-over-year, primarily due to a decrease in share-based compensation expenses.
R&D Expenses RMB23.1 million, down 18.9% year-over-year, primarily attributable to improvements to seeing staff efficiency.
Net Loss Attributable to So-Young RMB33.1 million, compared with a net loss of RMB21.2 million during the same last year.
Non-GAAP Net Loss Attributable to So-Young RMB31.5 million, compared with non-GAAP net income of RMB4.1 million during the same period of 2024.
Basic and Diluted Losses per ADS RMB0.32, compared with RMB0.21 during the same period of 2024.
Cash Position RMB1.1 billion as of March 31, 2025.
New Product Launch: Launched a natural energy event brand campaign with offline pop-up events featuring artists in Shenzhen and Beijing, complemented by online sign-up activities.
Partnerships: Partnered with premium skincare brand SkinCeuticals to launch new co-treatment solutions.
Market Expansion: Expanded network of aesthetic centres in K cities, with 23 So-Young clinic centres in nine major cities.
Customer Growth: Total verified paid visits exceeded 45,500, up 18.5% quarter-on-quarter and 874.3% year-over-year.
Operational Efficiency: Reduced customer acquisition and procurement costs through vertical integration.
Service Optimization: Optimized service offerings in branded aesthetic centers, removing low-demand treatments based on user feedback.
Strategic Shift: Pursuing a strategy centered on proprietary products, value for money pricing, and end-to-end supply chain management inspired by the Sam’s Club retail model.
Long-term Goals: Aiming to build a nationwide large medical aesthetic chain with strong brand recognition.
Financial Performance Risks: The company reported a net loss of RMB33.1 million, indicating ongoing financial challenges despite beating earnings expectations. This raises concerns about the sustainability of their business model.
Revenue Decline: Total revenues decreased by 60.6% year-over-year, primarily due to a drop in the number of medical service providers subscribing to their platform, which could impact future growth.
Customer Acquisition Costs: While the company is reducing customer acquisition costs through vertical integration, the effectiveness of this strategy remains uncertain, especially in a competitive market.
Regulatory Risks: The company acknowledges potential risks and uncertainties related to regulatory issues, as outlined in their public filings with the SEC, which could affect operations.
Supply Chain Challenges: The company is focusing on improving its supply chain capabilities, but any disruptions or inefficiencies could impact service delivery and profitability.
Market Competition: The medical aesthetic sector is highly competitive, and the company's ability to maintain market share and customer loyalty amidst increasing competition poses a risk.
Economic Factors: The overall economic environment in China may affect consumer spending on aesthetic services, which could impact revenue growth.
Expansion of Aesthetic Centres: So-Young is increasing store density in first and second tier cities in China, aiming to enhance customer convenience and loyalty.
Vertical Integration: The company is reducing customer acquisition and procurement costs through vertical integration, which is expected to improve cost efficiency as they scale.
Partnerships and Product Development: So-Young has partnered with SkinCeuticals to launch new co-treatment solutions and is focusing on proprietary product development.
Marketing Strategy: The company has allocated additional marketing resources and implemented sales incentives to boost revenue from proprietary products.
Supply Chain Development: So-Young is advancing its medical aesthetic supply chain, focusing on in-house product development and exclusive partnerships.
Long-term Vision: The company aims to build a nationwide large medical aesthetic chain with strong brand recognition, inspired by the Sam’s Club retail model.
Revenue Expectations for Q2 2025: Aesthetic treatment services revenues are expected to be between RMB120 million and RMB140 million, representing a 337.3% to 410.1% increase from the same period in 2024.
Long-term Financial Strategy: So-Young prioritizes long-term value creation over short-term financial optimization, focusing on expanding its branded Aesthetic Centre network.
Operational Efficiency: The company expects its vertically integrated business model to improve customer retention, lower acquisition costs, and enhance operational consistency.
Margin Expectations: As the company deepens execution across its networks, it anticipates more resilient margins and greater scalability across the market.
Share Repurchase Program: In April, Xing Jin increased his shareholding in So-Young by approximately US$4.1 million, reaffirming confidence in the company's long-term goals.
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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