Q2 2020 So-Young International Inc Earnings Call
Dead dead dead.
Good morning, ladies and gentlemen, and thank you for standing by for so young second quarter of 2020 earnings conference call at this time. All participants are in a listen-only mode off after the Management's prepared remarks. There will be a question-and-answer session as a reminder today's conference call is being recorded. I will now like to turn the meeting over to your host for today's call. This is Vivian shoe. Please proceed.
Thank you operator and just thank you for joining. So, you know second quarter 2020 earnings conference call. Please know that the discussion today will contain forward-looking statements made under the same conditions of the US private Securities and the medication Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations potential risks and uncertainties include but are not limited results online in our public filings with the SEC including our annual report on form 20th, 3 a.m. Does not only take any obligation to update any forward-looking statement except as required under applicable law applicable applicable. No, I'm sorry join us today call she changing our founder chairman and CEO and the mini our Circle at this time. I would like to turn the call over to my dog.
test
thank you everyone for joining us for our second quarter 2020 Encore Honda single-page you who hurt you know, how long you guys are you go you go. Hey, she's actually off nineteen throughout the first half of 2020 tested our ability to adapt and drive engagement with our extension policy of this and medical settings professionals with that in mind. I want to thank you for all the employees for their commitment and hard work during the second quarter as we increase our efforts our engagement,
quality and the provided
technology-driven solutions to service stakeholders across our platform
Okay, let me page itself is Elisa. May you please without interest to defend I'm sorry, Angela.
Well many sectors in China are recovering particularly those related to Commerce the recovery across the medical Celtics and the wellness industry had been blower like Faith according to construction data on a platform as of June 2020 non-surgical treatments were recovering and have returned to make people levels while I have only recovered 60% of the Nevilles see the fourth quarter of last year. We are a Resurgence of covid-19. Some main cities have prompt succor local government to once again put restrictions on public and personal life causes lower-than-expected resumption of apply hospital and medical service activities month.
Children's Shelter that she she may sound the agent told me so I call you back. Call me back to that. I was holding, how may I help you?
Despite uncle in Victor than normal human settlement and the restriction on General mobility in part of China as a result of the outbreak wage ahead and total revenue of R&B 328 minutes with presenting a 15% increase year-over-year from the second quarter of my 2019. We also make significant change in our apartment community of users and medical status professionals and a driving traffic through our password. We grow our community with the average mobile interviews increasing 6.8 minutes representing an increase of 174% year-over-year from 3.5 million during the same period of 2019. We also increased as a member of paying medical facilities provided our past two or three thousand seven hundred and thirty $35 an increase of 18% from the second quarter of 2000.
Some of them just like you saw things you do you sometimes you know the woman I talked to she she said we don't include that you don't even try to drive our user growth and engagement during the quarter of first we make great progress increasing the trust between users and our platform by rolling out to the preferred doctor list or re-record Emerald doctor's office, which company across industry introduces Concepts sector II we expanded our community of users and Medical Aesthetics professionals.
super consistent content upgrades including optimising our live video Technical Services
She she was self-employed. So true, decent wage and she wrote a check engine light bulb you can do for me in French area code 817 some woman off.
Trust is critical for Consumer to make informed decisions as a platform. It is our ability to be a reliable source for our users as the exact information from a reputable institution and doctors are all-powerful during the second quarter. We launched Emerald activists which are carefully curated listed by month batteries and plummeting comprised of doctor Consultants technical Specialists and assertive professionals. These preferred activities enable user to verify off and the search for doctors based on categories relating to numerous fields of specialization and rating criteria.
I think example a user could do a quick verify search for the eye on no specialist only has the highest rating in post operational. In fact, I'm an excuse.
You said this level of verified customizations for search build trust Drive adoption and improve signal on all platforms. As of today to our preferred doctor is to have covered fourteen cities, including beijing-shanghai Control Center and other Provisions capital cities or do I am I am here late Charlie Charlie Sheen dead.
Toyota service rep
During the quarter we continued upgraded our content.
In particular we made Solid progress in using technology to improve the effectiveness of how we match patients and doctors for the live videos as soon as the service rep use technology to analyze user behavior and organizations, including the questions filled by our hours during pre-screening location of user name articles read and other factors to optimize how we choose which doctor a patient is referred to the delete. We have become increasingly successful and driving greater communication between doctors and patients and increasing conversion rates for automatic resetting professionals.
During the second quarter the completed nearly 127,000 request up from 887 quest in the first quarter would believe that this last month delivery type service will continue to create a fishing bridge between medical professionals and end-users Facilities delivery of high-quality medical advice and home-based, which ultimately help the user make their final decision to pursue approach procedures.
Did you sing a song about 17,000 she took the soul out ambassadors project to popularize magical set is knowledge among users promote content development and support offline to online position of medical institutions selected users will have one month to use our programs produce and share Beauty Diaries based on their actual experience over seventy thousand users home.
interested as of
Today I wanted to amounts following the Slash the project officially account. So we are ambassadors with the so your mobile app has attracted nearly $8,000 with em, you originally one minute and a generating more than seven hundred Pages questions.
When you sound you sound outside what you took so long. Hi Shawn, hold on change on the Shelf is strategic initiatives wage initiative with Will further strengthen our competitive Advantage improve the scale and sickness of our platform and demonstrate how our Innovative and the dispatch office and unique value proposition to our growing number of consumers professionals and service providers.
So, you're welcome. You do you go off some shots you go there goes out here. I'm going to shoot come home school my whole life in China put your whole career and she go high jump. Long time. I bought a smart comedian or SMS service providers during this quarter would believe that the service will better provide those while that in content distribution capabilities of experience in authors.
You call me as platforms with more exposure to our digital Savvy and qualified and uses this service enables each member store to open up a new website page listing of their products and use a promotional events.
They will also be able to introduce new ideas and the procedures through our our showroom in the near future though. We are still in the early stage of our rollout. We are already starting wage levels of interest from service provider partners.
I'm not so sure you're cool email she won't cut off she when she you know.
Crisis of a year from Innovation and we believe we have revised.
Gratitude in case to capitalize on the eventually full coverage of the online medical setting service industry in China our platform continues to provide an open diversify dead consistent for our users and Medical Aesthetics of professionals. We firmly believe that a reliable Community can effectively and efficiently incentives service providers office to consistency to consistently offer high quality treatment with transparent pricing while giving you the access to the fact the truth and information that allowed them to make well-informed decisions for treatment options. So the show on the circle just now like to turn the call over to make sure it goes through the financials for the
Thanks.
Pronounce kosher here will being on be 10:00. Please also refer to our earnings release for detailed information of our comparative financial performance on a year-over-year basis for the second quarter of 2020 Toyota revenues were R&B 328.2 million up 15% to get over here and in line with our previous guidance pay increase was primarily due to an increase in the number of paying medical service providers whose operations have gradually recovered from being pets of the covid-19 pandemic as it becomes that controlled in China with in total information Services revenue is on the two hundred thirty four point five million, the 11% year-over-year reservation Services revenue is on the 93.7 million months at 28% year-over-year.
Costs of revenues on B fifty point seven million up by only 2% year-over-year total operating expenses will be two hundred eighty seven point four million up 28,000 sales and marketing expenses were on B, 104.7 up 75% year-over-year primarily T and increase in expenses associated with Mark complains how to use a position initiatives General and administrative expenses were on the 49.8 million down 26% year-over-year wage research and development expenses. What I'm the 52.3 million up 1% year-over-year. The marginal increase was primarily in the results of costs associated with increased Highlands to support product development, which is in line with the company's strategy of strengthening is technology and Big Data analysis capabilities.
Income tax expenses 102.8 compared with an income tax expense of the ten point eight million during the same period last year off the change was primarily due to the decrease in taxable income you during the second quarter to seven twenty net income was on be two point 1 million compared with the net income on the twenty nine point three million in a second quarter 319. Now I'm getting nothing, was 30.1 Million compared with our new one and two $20 a month income the same period of 2019.
basic
The 80s attributable to ordinary shareholders or 0.02 and R&B 0.02 respectively you compared with 0.22 and 0.21 respectively during the same quarter of 2019.
No balance sheet as of June 30th 2020. We had total cash and cash equivalents restricted cash and term deposits and short-term Investments off. The two point eight eight billion compared with 3.84 billion as of December 31st, 2019. The increase was primarily due to the cash from operating activities during the second quarter with that in mind for the foot quarter of 2020.
Respect to the revenues to be between 314 million and R&B 317 million, although we are seeing a recovery across eCommerce industry in China. It is still relatively early to fully assess the epidemics long-term impact on our business and the markets in which we operate, so, I'm remind you that this broadcast reflects the company's current and the premium the reviews on the market and operational conditions, which are subject to change. This concludes. Our prepared remarks. I will now turn the call to the operator and open a call for Q&A operator. We are ready to take questions.
Something you sir ladies and gentlemen, we will now begin the question-and-answer session. If you wish to ask a question, please press star followed by one on your telephone keypad and wait for your name to be announced kindly ask one question for person due to time constraints.
I didn't know if you're asking a question in Chinese. Please repeat the question in English immediately. Once again, it is star one to ask the question.
Do you have the first question coming from the line of Thomas Chong from Japanese bistro?
What time you guys a bunch of these are that won't let me know. I'm Sula Google show that he's dead. Yeah, boy. My question is about twenty Twenty-One Outlook given that coverage is over the year, and how should we think about the impact of consumer income level if their income is affected with that took a fact our business or our Revenue growth. Thank you.
Okay. Thanks Thomas. This is Ming. I will try to answer your questions yet. So for 2020 the wage, I think yeah, you're correct. That's the reason why it seems like our traffic is going up. But our revenue is not recovering in the same curve to the money compared to the traffic growth and the major reason is because of the actual consumers they have relatively low expectations on the incoming calls and from consumption side the higher arpu consumption or relatively more expensive consumption here will be recovered.
Best pasta than the the other consumption sectors in in the China post-pandemic. So but we do see the trans he's in recovery and we do insist to invest in the traffic acquisition and trying to improve our contents quality and improve our products our Earth quality month and trying to keep the users to be used to use our ask when they won't have interests in Medical Aesthetics and trying to marketing ourselves off our brand name to the general public that uh, so young is best platform for Medical Aesthetics, and we actually can help them to make the decisions about what we observed. So far is user uses takes relatively longer and and they spend much more time when they
Make decisions, especially for those now those surgical services with higher risk and higher expenditure so long, we expect that when the and that makes impact the relatively fade away then all the economic activities come to the the normal level and users have all the customers. They they do start to spend money again off consumption for a relatively higher or more expensive. So if it's then the individual and the value generated for us as a platform will be coming back to the normal days as well. So it's by that time when we although we I the company or dead.
An authorized me to provide a the exact number what will be look like 4 to 10:20, but based on the trends we currently observing for the traffic growth. And we also do observe that the user stay with us longer and they do read a lot of information's and they do use our tools just they want to be spent a longer time when they film up that decision for consumption and everything go back then our monetization efficiency by the traffic's we have faith. It will be back to the normal again. Then of course, it will directly impact have a positive impact to our Revenue.
Thank you. The next question comes from the line of Brian gone from Citigroup, please go.
6:20 p.m. Just over two hours to someone else. Because she can you call me back. I don't translate myself since with my management taking my question. I have two questions. First is how is the budget how is industrial park right now, especially for surgical services and the second question is how is the progress our new subscription model? Thank you.
Do you go into your bedroom if I can you make sure she told me I should be like dead dead dead dead.
Give me some time after the birth. So you can tell me like some issues with she saw some place with our children from home since I wasn't home.
The careful and consumer behavior on a platform and we already seen that actually the data our show that by the end of June non-surgical treatments return to the previous domestic level of last December. Well surgeries have only traveled to about 60% of never seem to get the first Courthouse the last year and and also affected by the performance before the first half of the year. We also sat down and talked to somebody a desire and a presumption Power by different city. So while we look at the cities is in the tier-2 tier-3 wage, which are multi users actually do their own own business and we find that they're in, still really big impacted by Thursday.
adamic, so the whole thing is here is is
Recover situation still a little weak. In fact from the past few months to the present over Roy. Korea has been relatively small but the continued trend is actually the same surgery has recovered to a state. How about you stable level? So right now, we now yet to happen to have a very clear visibility like when where it will fully recover and what happened the last and not sure yet, but we still see that this is
This is would be this trend is continuing to recover.
Okay, the second part of your question, it's about the subscription service. We currently offering to the institute's on my platform. Then uh current update is we rolled out that service in the second quarter. But as said in the projects remarks by mr. Genes that we provide that service to the new or smaller service providers on the platform and let them because they don't really have a very sophisticated a team who has a capability or who is really well skillful in operating the platform online platform business, so
Then we have for the other subscription Services. We are currently is actually ready to go out for the service providers that we took the management point of view. We decide to uh postpone that a little bit a couple of months later because the more services for targeting different layers of the service providers where you currently feel that service providers in the recovery Trend that their business and they uh more money directly in terms of looking at the the commission-based revenues from the platform and how many transaction we offer assistance them during the early stages of recovery, then they when they start to recover to a normal level as a business activity we observed
That's the thing start to spend more on information services including the subscription Services which provide them with more sales leads where you currently have then that way I need time. So we don't want to rule out the services to aggressively and monetizing that too aggressively is in terms that the service providers will feel the pressure from the platform. So we decided to more services or more subscription for this would be ready in the fourth quarter than willing to provide that to the service more general service providers on on my platform.
Thank you. We have our next question coming from the line of Vincent you from Needham and could you please go ahead?
Thanks management for taking my question. I have two questions as well. The first question is about the product category as the medical industry gross. He's he's already twenty due to the codes which is shown by some sort of part. Do you guys have any comments on which procedure procedure category wage has seen the biggest drop main interest and which has been the most resilient and my second question is about competition. So, you know in in June 18tj motion there some other companies like in the answer pretty good, uh sales number has eight for your reservation has covid-19 accelerated by the online application for the medical aesthetic aesthetic industry. And if so our plan to capture these online spending versus wage
Compactors our home quite an illegal U-Turn when they could find is about not you when he's going to the time being a lady when we can email them waiting to go down on yourself. You don't listen to some instructions that were to go camping, you know, just kind of the month they seem to be. Has your home or you just looking to another I do have accidentally so I'm kind of using the email email no email and phone number.
Woman trying to cut out two seasons in the system.
Jimmy Page comes action right now. Thank you.
You know, especially well maybe a chocolate cake, which was now dead. Yeah, I guess they also just all my man. Now, She's she's you know how to treat you should be home. Now. You may challenge just couldn't I can go you can go outside dog?
Call me on that should be June by birth and you may not like them very much. How long how long you doing trying to get the whole life? Yeah, sure. You got your attention at all off.
I just got the dog.
Yeah, I was trying to translate that to keep so is that actually mr. Genie explain that off as well? And you know you make remarks and we I also mentioned that earlier that from the first half of 2020. It's been very obvious and is off the non surgical Services, which has been recovered much faster than the surgical service and we didn't non-surgical services with the relative age categories of anti-aging service or laser Service as actually coming back to a recovered in the past categories of services. The reason why is I think is quite obvious. These treatments compared to a surgical is relatively cheaper and especially for the birth.
Because very cheap Medical Aesthetics treatments usually cost around like 200 300 in the living under one thousand on the categories that being recovered fully at the end of the second quarter. And in the third quarter, we do see that we observe year-over-year growth for those categories. And for those nonsense off to be more expensive treatments. We also can see that the penetration for those services start to assist is standard into the younger generation of the target population. So
in general
From categories of services point of view that's non-surgical being recovered best in in the in the poster time that make. And the floor surgical Services usually on a seasonality base to q1 and Q2 for reading a year usually have bought the best transaction volumes for surgical treatments or services. But this year first quarter being fully down quarter, everything being shoved shut it down and then the second quarter usually is a relatively low season for surgical treatments and also third quarter because during the summer. Poem surgery recovery will be a relatively high risk a high risk and difficult. So usually these are the low Seasons but this year it's become even log
She's so the reason I think he's also because of depends on MC more expensive consumption will be difficult for customers off and we also didn't see anything like in the summer holidays. The the graduates usually will have a Medical Aesthetics back during these holidays that this year is also not very as as busy as the previous use. So this off from the first part of your question on service types.
The do you have on the account here is a team-high off magical email showing me unless you know, January 29th is when I was younger. I went out and bought a phone number.
you know kind of em, you know sometimes
You said that you got sent me a email you do something else. She says Home Center. In fact that she she she she she she told you know, how long you make some time and she said she won't get sound out a vehicle from the secret Club.
Not usually when she's home if you guys can I get off from Father's you make the sound of a personal. She's actually she's she's dead.
She was home town and it's just a shame Chrysler Dodge Jeep and she's like what you charge to do the job. Well, then you could you know, some people do like dead dead dead. That's the image off.
Yep, so I'm sure some of the season.
Hi.
Victory related to a question about the performance.
She'll be basketball. We noticed that some other platforms all also disclosure the lenders especially in terms of the GM. We actually we have the most destructive way to calculate the changing my laptop or so, we can connect we actually did declare is very very clear member and off we actually know deleted a lot of you know, what traffic with water of not related to magic eight excuse and to the next question about the competitive landscape in the industry. We think that in terms of spending of the user acquisition the search engine Remains the largest abused acquisition platform for medical institutions that we continue to grow the member of client visits that we generated or institution of line while being able to make a dog
Like his teeth at her. Did you use a position cost? And also we think that those users actually could be category into two types one is recording of active users who actually want to search information related medical settings actively and those users off the pasta, but it's a quieter bye-bye do all so young or vertical channels like us
And another type of business we call the passive users who actually might be attracted by very cheaper price or some you know, the shop. Thank you. So the manual says consumption group continues to grow and mature while increasing demand for professional platform and content with we start with medical service and we end to extend into more category to category load here and also those users with more divided by faith.
And the unique of our community and the richness of our multi-layered professional generated content is What description to us from our competitors?
So we think that the the future we still can't expanding our community and we make contact as the radicals of those offline partners.
Thank you be have the next question is from the line of Thomas strong from Jefferies.
What do you mean he's dead dead dead. My question is about the m and the sales and marketing Trend in our solid momentum in user growth management comments about how we should think about the Outlook page the coming quarters as well as the marketing cost given that the marketing cost on a position is getting more expensive in the industry. Thank you.
Well, I just took off and they got those really, you know, you get out of his way to to line right now. Can I speak to Orlando? This is dead.
Yeah, I'll take you off option. I don't know you do without you could you know, you can stay in the house took them sent you a call ahead of time Thursday. You got you got you got you got home from high school and you teach and went home.
Can't start on the time that you met someone, you know you can I help you. I'm good.
And do we actually go out users into Hungary ways one is the content marketing and the second one is the money investment in the in the doctors is actually the doctors and the surgery but not but most important is to blending preventing self. And we think that would be our sales for users for all the features and value proposition of our community. We think that direct and accurate positioning happening users needs to be patient is the first and most critical step in building long-lasting relationships with our end users and in Q2. We actually walk through that we parked we actually do a lot of war first of all, we made Solid progress in terms of brand partnership and placement during the
and why example as I mentioned previously is that we achieved
Like ten billion nutritions for a placement In the Heat of variety show sister who braved the wait and wait and the other drummer in the office packing. And also we sorry we we could further increase the scale and adapt influence of our friendly in the second half and tweaking that is good wage increase the total cost of the each unit a position our extensive sites. And in terms of the content that we use the so young and visitor wage and to improve the ecosystem of our community. And also we think that we could sign up some celebrities too and also Office lounge on 2nd plan for so long accounts to never resources to always content production capabilities on our platforms.
And we can catch up with both of the two way. We could see the momentum and the user page as well as the engagement.
Thank you. We do not have any further questions at this moment back to you Ma'am.
Thank you. Ladies and gentlemen that concludes our conference call for today. Thank you all for your participation. You may disconnect your lines now. Thank you.
dead
Thursday Thursday
dead dead
Dead dead dead.
Thursday
dead dead
Thursday
dead dead
Jose
Thursday
Dead dead dead.
home home
Thursday
home
Thursday
Thursday
Yep.
Thursday