Q3 2021 So-Young International Inc Earnings Call

November 19, 2021

Okay.

Good morning, ladies and gentlemen, and thank you for standing by for so Young's third quarter 2021 earnings conference call. At this time all participants on this and only mode. After the management's prepared remarks, there will be a question and answer session.

As a reminder, today's conference is being recorded I would now.

I would like to turn the meeting over to your host for today's call Ms. Vivian Zhou. Please proceed.

Thank you operator, and thank you for joining <unk> third quarter 2021 earnings Conference call. Please note.

Question today will contain forward looking statements made under the safe Harbor provisions of the U S private securities.

Litigation Reform Act of 90 95.

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 to adobe's all nine of our public filings with the ACC, including our annual report on form 20-F.

So we hung does not undertake any obligation to update any forward looking statement, except as required under applicable law.

Joining us today on call are Mr. Xing Jin, our co founder Chairman and CEO and Mr. <unk>, our CFO at.

At this time I would like to turn the call over to Mr. Xing Qi <unk>. Please.

So Doug heart, because you talked about a time job she already argument antisense CFO.

We.

Thank you all for joining our earnings call for the third quarter of 2021.

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Somebody a junior in Kochi turns all of them are saying.

It may have bought only required you're trying to bridge, Louisiana, Tony Renzi.

Jim Bob Nigel Chicago, maybe somebody Chilean Torchy Jones on behalf of mutual downhill.

We continue to execute our strategy during the quarter and are pleased to deliver solid financial footing.

Despite the challenges and impact of Covid.

And part of China.

Revenues grew to RMB $431 5 million in line with our COO.

<unk> guidance, an increase up 20% from the same period of 2020.

Now again netcom attribute too so we are internationally and course, RMB $28 9 million.

<unk> of nine 6% from the third quarter of last year.

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In the third quarter, the resurgence of COVID-19 in several cities across the country, resulting in weaker than normal consumer sentiment and heightened the containment measures had a negative impact on our business.

Having said that we firmly believe that.

The long term outlook for the matter of a set of industry remains strong and intact.

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Q4, total about Suitland Kenzo, <unk> Zhong passenger oxygen.

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Talk about our strategy progress on our operations during the quarter. Firstly, our team worked tirelessly with tirelessly with infusion to increase brand.

On the platform with the aim of improving conversion rates.

The number of paying medical service providers on our platform was 4841, an increase of 18, 2% from 4000.

96.

In the third quarter of 2020 has become the Premier one stop comprehensive medical aesthetics, and medical service platform to facilitate pre sales and up sell services.

SaaS closing the information gap between online and offline demands.

Information services revenue maintained daily growth.

Creasing 21, 1% year over year to RMB $321 6 million.

The number of medical service providers subscribing to information service was 2200.

<unk> 42 up from 2000 to 146 in the prior year.

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I'm going to into chalk Forecourts Hugo Xi'an, Shanghai, those sorts of elite Georgetown's showed you about it.

Cause you couldn't Peter Ho, who go much only touch on until July assess your nagel.

In terms of user experience with FERC.

Key areas strengthening the digital kept pellet.

The capabilities of <unk> platform, increasing personal data protection and improving the customization of community content based on individual for Paris, and the purchasing behaviors.

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So while the face or the Belgium, or can you handle something some sort of the bulk will change with Enzo Johan.

<unk> chosen to do so as you saw so Joe Yeah. So we saw some scale shutdowns how was for sure Xiaomi Ciena and coaching she's also Josh loop Central dog food. So yeah, we're so Hussein Sunday T cells, which all told about the new strategic Chilean toll Chile passengers.

On the non surgical product side.

Popularity of non surgical categories remains high in terms of user demand.

We further increase the number of Skus on our platform to optimize the online transactions.

With more transparent pricing and an attractive incentives for the users.

Particularly as a way to reward our loyal repeated users.

Our online.

Action projects as gained much traction and the demonstrated progress in brand loyalty as we continued to strengthen the management and control of adapt authenticity and supervision over treatments and services.

Alongside the standardization of non surgical procedures.

As of September over 140000 announced surgical SP use.

Well valuable on our platform an increase of 26% compared with the same period last year as a readout in third quarter revenue contribution of our <unk> business increased to 49% of total revenue up from 43% in the third quarter of 2020.

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So what will I mean this is something that was earlier. Please go into a poll consumption module put home Coco as usual.

Separately, we've worked to ensure consistent standardization of non surgical procedures and service, while helping institutions to enhance contract performance and authenticity of high quality service.

We'll continue to grow our market share in announced surgical categories and expand our go to market strategy by introducing more cross selling and the popular products that address different customer needs.

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To refine our operation in the surgical categories, we allocated more resources to support back to both doctors and expand our advantage in this area.

We upgrade our customized treatment program to help users find the person ICT solutions, consisting of effective diagnosis and treatment by Mike by matching them with the right Doctor and professional consultant.

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<unk> posted it to John's Hawaii women, partially you're going to see here if you can touch.

On the call Joel.

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So yes.

We want you to draw that you go long ago, She's only <unk>, essentially Josh and Hugo Kashi Shield any hurdle.

Now I would like to give you update on our business integration with Wuhan Miracle laser systems.

Both the deal in the Middle of Q3, the acquisition of Wuhan Miracle has helped us expand our institutional network fulfillment service and is a great example of our strong growth strategy exploring collaboration opportunities with equipment and device manufacturers as well as macro drags.

We have set up a flagship store.

<unk> <unk> platform and added online products too so we have pumps.

As of early November so we are having established business relationships with more than 30 institution derived from Hanmi broker network.

Two hopeful that John called out kind of you're almost pseudo Greenwood chenzhou, you're selling those homes sedan.

Bundle with Homelink, Michele so until I know youll haughtily to dealerships.

Going forward, we will scale this service model and seek opportunities with upstream product providers through trials that will connect to them directly with many of our users.

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In total womens sorry, since he's going to go.

Alpha which is viewed as a tissue future non gold bounds.

Chico tissue coalition pool table, they'll do hot coffee or Chicago.

On the regulatory front, we remain close communication with the regulator and for our industry guidelines by promoting self discipline on platform governance.

<unk> Street, and internal review, Mckesson mechanics, and our doctors and institutions our database.

And facilitating rigorous approval process.

And our service offerings as a leader in the medical aesthetics and imagine industry, we particularly focus on the accuracy of the online information we provide on medical aesthetic services assistant our institutional partners with combined audits and promoted the standardization and.

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To summarize so we our goal is to provide a comprehensive medical aesthetics and Magna information that will resolve inflammation a cemetery within the industry.

Meanwhile, we are developing our <unk> platform to enhance our cooperation with upstream codec suppliers.

In addition, we are strengthening our community operations Kevin.

Okay.

Excellent.

Hi, Ann.

And improving overall user satisfaction rating by Fitch.

Consolidating rather AI service and the treatment execution phase.

We believe this will help us extend our reach to a growing number of <unk> users and have raised the size of our total addressable market.

As we continue to grow our reputation as the most trusted a matter of aesthetics and a matter of care platform in China, We will close its drive to raise a standardized our standards and the quality of the industry.

Summing to a woman this handful who meet yourself as you do this how would you hope to hold until kind of the affiliate line here.

Let me remind me to give us a range of the weak quarter.

Up to the QA. Thank you. Thanks, Chris please be reminded that all amongst quoted here will be RMB. Please also refer to our earnings release for detailed information of our comparable.

Financial performance on a year over year basis for the third quarter 2021.

Total revenues were RMB $431.5 million of 20% year over year.

From RMB $360 million in line with our previous guidance.

The increase was primarily due to increasing the number of paying medical service providers.

And the consolidated revenues.

Of the $48 1 million in 'twenty, one Q3 from a miracle.

The number of paying medical service providers on the platform.

<unk> 4841 increased 18, 2% from.

4096 in the third quarter of 2020, the total number of medical service providers subscribing to information. So this is all silicones platform was 2242 during the quarter compared with 2146 in the third quarter of 2020.

Within total revenues information services and other revenues.

$369 7 million up 39% year over year from <unk>.

$265 7 million reservoir.

Reservation services revenues were RMB 61, 7 million a decrease of 34, 3% from RMB $93 9 million in the third quarter of 2020 cost of revenues or <unk> $89 6 million up 63, 7% year over year from RMB $54 seven Milligan of third quarter.

2020.

The increase was primarily due to the consolidation of the costs of all her medical cost of revenues included share based compensation expenses of RMB, four 8 million compared with RMB $5 1 million in third quarter of 220 total operating expenses were RMB $322 5 million.

A decrease of three 7% from RMB $335 1 million in the third quarter of 2020 sales and marketing expenses were RMB 197.

$7 million.

<unk> 13, 9% from RMB $221 $6 million a year ago.

Primarily due to the decrease in expenses associated with branding and marketing activities.

Sales and marketing expenses, including share based compensation expenses of RMB, two 2 million.

We've RMB $2 2 million in the corresponding periods of 2020.

G&A expenses were RMB $54 7 million up eight 7% from RMB $53 million year ago, primarily due to the consolidation of general and administrative expenses of 400 uncle.

G&A expenses, including share based compensation expenses of RMB 10 million compared with $12 2 million in the corresponding period of 2020.

Research and development expenses were RMB $77 1 million up 22, 1% from RMB $63 2 million a year ago. The increase was primarily due to the consolidation of the research and development expenses.

<unk> medical.

R&D expenses for the third quarter of 2021, including share based compensation expenses.

One minute.

<unk> with RMB $6 million in the corresponding periods of 2020 income tax expenses was RMB $4 3 million compared with RMB 16, 3 million income tax benefit in the third quarter of 2020.

Net income attributable to <unk> International Inc.

Was RMB six 8 million compared with net income attributable to <unk> International Inc.

$0 9 million in the third quarter of 2020, non-GAAP net income attributable to <unk> International was on the $28 9 million compared with RMB $26 4 million in non-GAAP net income in the same period of 2020.

Basic and diluted income per ads attributable to ordinary shareholders were RMB, <unk>, 0.060, 0.06, respectively compared with <unk>.

<unk> zero, one and 0.01, respectively. During the same quarter of 2020.

Now for our balance sheet.

As of September 32021, we had total cash and cash equivalents restricted cash and term deposits term deposits and short term investments of RMB.

1.8 billion compared with RMB 2.7 billion as of December 31, 2020.

For the fourth quarter of 2021, so young expects.

Total revenues to be between RMB $430 million.

The $450 million representing.

One 3% to 6% increase from the same period of 2020.

The above outlook is based on the current market conditions and reflects our companies.

Preliminary estimates of market operating conditions and customer demand.

This concludes our prepared remarks, I will now turn the call to the operator and open the call for Q&A, operator, we are ready to take questions.

Okay.

Certainly.

Participants who wish to ask a question. Please press star one on your telephone and wait for your name to be announced.

If you.

Ask your question in Chinese please repeat it.

In English immediately.

One person is allowed to ask one question at a time, if you want to ask more than one question. Please rejoin the queue again star followed by one to ask your question. Thank you. Your first question comes from the line of Thomas Chong from Jefferies. Please go ahead.

Well since it wasn't any challenges or what are you in a different issue.

Okay.

Wanted to talk quickly on.

Oh sure.

Got that.

Higher doses, one didn't Guatemala, and Guy Baber Zama.

Thanks management for taking my questions I have a question on about the regulation side.

Comments about the guidelines on magical and instead of co op advertising law enforcement as well as the brand opened regulation Beckwith HOA situation. Thank you.

Yeah, you know Mayo now post CTO he'll also CFO shellfish issue sale, what kind of doses Hangzhou Guangzhou juices are doing the <unk>.

You may all main local oncologists lots of non Covid.

Hello.

What do you think that should ship all haulers shelf either the whole country.

As matter of aesthetics has both magical nature and the consumption nature. The guidelines on medical anesthetics advising law enforcement easier to buy EMR.

The state administration for market regulation.

Maintain the order of the medical aesthetics market and a truly protected that <unk> life.

Right and interest of consumers.

Joey chocolate along EMA.

She onside Hugo who landlocked sea food of course, Hangzhou, John Young girls renewal.

Got to advancing <unk> gradient O T cell.

South Asia, China, Paul Hooper.

Two songs sung.

Finally found greater liquidity.

On the cellphone Zoe horses, <unk>, all court Chaco human being.

Beyond <unk> and chip <unk> Hello sampling.

Wishing sheet pause.

South Asia, that's issuing Shanghai Shanghai Chang.

All of my service platform medical aesthetics, we will.

Strictly quickly followed the requirements of law on protection of consumer rights and interests.

<unk> la and other laws and regulations as mentioned in the guidelines as we provided the online information services.

We will that consume applied the specific information of products, including price performance specifications and a disclosure of information of the product or service in a comprehensive jeannie accurate and real time manner.

Posted material guaranteed the right to note and the right to choose all consumers.

Post <unk>.

One cannot just Hudson and adopt Tibor children being Johan labor support.

Total.

If I were you Greta.

Sure.

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She owns over how you don't treat Sop Hertz.

<unk> hired somebody can wait a few hyatt Chico telephone for kosher, but now your product or to a huge honor she can shop with us.

They finally.

Change I.

Paul It's all celebrate the Chinese my question to you.

Chico are yet to Cotai telephone Shootouts Foundation, so quick on messenger sung <unk> column.

Meanwhile, we will proactively followed the guidance to our guidelines to further establish an optimum.

Yes.

Take that <unk>.

The initiatives.

Elite co promotion information.

And to maintain the standardization and all other department.

And as the platform desktop in the first place and the continuous they conduct self discipline.

We believe.

You should not see the consumers buy aggregation all four information marketing and consume acquisition, we strictly forbid illegal promotion information and it take protection of consumer rights and interest.

Well institution, they will tend to have more.

Rational and compliant platform when choosing marketing channels.

Tyler so for your Wimbledon niche, England, you'll leave you to hear that your.

I'm glad that she answer if I didn't also Chung <unk>, Italy team, who runs that enables some questions.

<unk> you may begin.

Yeah.

Meanwhile, our maturation as a positive to the healthy development of industry, leading the industry with a stick to self discipline.

Our internal review of mechanics, and the dry medical aesthetics to return to his magical nature.

That's all thank you.

Thank you.

Next question comes from the line of Nelson Cheung from Citi. Please go ahead.

Yeah.

Okay.

Yeah.

Smelting. Your line is open you can ask your question now.

Yeah.

Okay.

Yeah.

Nelson if you're muted your line. Please on mute your line and ask your question. Your line is open.

Yeah.

Okay.

Yeah.

Your line is open you can ask your question now please.

Yeah.

Okay.

Nelson from Citigroup. Your line is open you can ask your question. Please on mute you ask your question I think the Sandler.

Yes.

But.

Uh huh.

She said one consistent with if you went well with her when she is with Glenn you are jumping from it.

Kind of a Q2, you'll see I'll tell you, yes, that's true.

Uh huh.

Hollywood tenure in that kind of a oh.

What we thought you'd see doesn't I suppose.

So let me translate myself. So thanks management for taking my question. So with the revenue decline of reclamation in revenue this year.

Can management share the reasons behind the behind.

Behind it and what's your expectation for the long term trend of this business going forward. Thank you.

Yes.

So suddenly you EQM Asia, essentially all those others show up on time.

So you won't have the southeast contingent Chelsea U S, Utah human cell fate.

Thank you first get due to the resurgence of COVID-19, some mega cities consumer confidence is weaker than nominal ended their weakness to spend.

<unk> is not that strong is impacted the medical aesthetics market.

Sure.

Yes.

She said you myself too selfish with.

Youll recall, Danielle I'll call to Portland house or they won't.

<unk> in the future.

We've got some dollars sheet autos is healthy.

Each unit.

Young good funnel and sources.

You didn't lose on fulfilling a widow classroom itself. It's also not July.

Kind of delayed the price format of a Fedex treatment is generally expensive and some consumers need to take prostate to travel to get the treatment. The containment measures in some cities prohibits their movement.

Uh huh.

Your dorm in Kazan Chico Sundar.

John told Chico's has on the solo homegrown colleague launching golf with you, though Tim took or did you go nuts, how you want the doctoral courses.

<unk> herself.

You got some key that goodwill.

In the meantime in this Q3, we tested new promotions with selected institutions.

College institution to expand inventory and give more rebates to users, making them have more incentive to place orders on.

Okay, you cannot say tissue Carl Jung Kim Gogo children's social Joe you talked about your just your thoughts I shared with you on the Xiaomi Sangria Adagio, Colorado that will soon be a jones on other avenues are still her patterns, which is about your whole code on Josh young be selling the doctoral Hollywood actual Sunday its own genre bathroom.

It used to do her preferences SUNS deal.

As a result under the new promotion JV of online transactions in September was 96% and 78% higher than that in the March and June respectively, While our pool was.

76% and 39% higher respectively as well.

China condos shows a woman so she is herself with Yana Tivo <unk>, Belgium.

Yehuda will metrology Chung Shan Shan Shan.

And you're right you have cash issue.

Without their holdup, Saudi Richie in volatile you'll put out its own pinballs side people doing the Shanghai shows on seafood Voc or do it onto our other Asia choices Chico in Shanghai shot that Tico tico the charges are high salary.

Over the long run with a better user experience and standardization of our product offerings, we will enhance the fulfillment of online transaction and extend our service to offline ensuring user gets the authentic products for institutions using online payment service will be a factor.

If they want to <unk> and accomplishing.

The harvest led to user place order online.

Yes sure thing.

I appreciate it.

Yeah.

Thank you. Your next question comes from the line of Vincent Yu from Needham and company.

Please go ahead.

So as you Glenn Thank you Wendy.

And I think that all of that.

What we don't want to hog, all well the big ones is <unk>.

<unk>, a whole thing I'd call out.

How did you go blank blank neutral.

You can go about doing it.

You talked.

Ultimate Utah.

Huntington number then jacobina and Sop usual switching with normal <unk>.

Don Diego will make our guidance.

What do you think they will.

And then I will make that kind of.

No.

I will mention that.

Thank you.

Sure.

Okay.

Hello, Thiago ones, you should want me to.

You bet.

Sounds good.

So maybe we'll just see.

You May show each each of the buildup just your officials who named.

Uhm.

Complete financial AMA finish.

Hi management. Thanks for taking my question. My third question is about the impacts from COVID-19.

COVID-19 resurgence continue to impact our business operation can management share your view on this thing.

Fourth quarter, especially on user base.

And also for the next year would you see we'll use the growth and the revenue growth. My second question is about it progressing so young past compared to surgical categories, which is.

Actually by.

By COVID-19.

The growth trend for <unk>.

Okay.

Sure. Thanks.

Okay.

Yeah shelf with Opdivo in sheet.

So since you don't know them and conduct proven such as the Eagle Ford time either.

Lusaka Youll touch on alert on sheet opportunity issue well notes issued a gunshot 70 doses on June 10.

You should not be Ohio, social sharing that Youll touch on Judy's answer.

Thank you for the first question in Q3 and Q4, the rebound of the damage in some cities bra short term uncertainties to our business. We are monitoring the development of the market and it will make adjustment for our marketing strategy timely.

So do you mean, so you're your official Central Asia.

So sorry about your social they suddenly also that due to soft home inside officials on your quotes issued since you're going to need to do in Italia Proton Center, who taught US is also up.

For the Q4 and next year, we believe the popularity of now surgical category will maintain its momentum where we are.

Solid define our existing strong position our surgical site.

Executing our established strategy I'll now surgical site could penetrate into more markets and gain market share.

Of course, Virginia, you met her father CTO to the tune of I died on the U S. So shortly.

Maybe I'll show, you, some sort of shape or whatever but the initial sit.

<unk> you may Javier houses have been shot so he Belgium so for.

<unk> John.

Turning to China, you're doing some lusaka.

South Asia posted.

Two minutes you showed a T cell <unk>.

<unk> done the simple table you may four which is on behalf of Belgium hydrogen cells in.

In the past several years the main driver for the growth of matter was that industry came from the plastic surgery because of these surgeries and now standardized now standard treatments the quality of which is largely dependent on certain doctors. Therefore, the status of the industry remains fragmented.

With no.

With no Union Marseille standard <unk> poor service quality.

COVID-19 by some degree had changed user behavior in the meantime, the advancement of the technology of life aesthetics, and extending user growth accelerating the development of the digitalization and the standardization of the industry.

Well the Chongqing, So you choose which I will show.

How did you go she all from car T cells don't hear foolish APM.

And then on leap <unk>.

Sorry about the.

She's just survey yoga and Samsung She all car taught you say, who the <unk> shock the COVID-19, how they're utilizing it to India.

We believe such trend to continue in the next five years institution, a reply to improve their macro scale and service quality, while the upstream equipment and it dropped providers want to increase sales Porsche.

And brand influence to end users both of them will need more service from our platform.

Thiago <unk>.

It took us as homes finishes and cashes downstream challenges, which will guide us to either.

Yes.

Tissue challenges will forget as CFO.

And Tito more tobu sabotage Hello.

So George you go short charters for those you will slow down as you go towards that.

<unk> volume, which is logical.

Forgot somebody that understood.

Yes, I put on Johan <unk> mentioned.

Right.

Operation for Cilium past awards, starting last October and the.

<unk> is covered as expanding to over 50 by the end of this quarter.

Over at the beginning.

Corporate institutional also increased comparable to.

250 from Nike excellence, while spending the coverage we are continuously optimizing service QA and popular category, obviously help us.

So our official budget.

The official data.

Signs of Nashville, and our path or is it just a little closer to your kind of your home industrial generic automated so you don't use it.

Those are the bulk on 17, Youll Photonasty continental for Hy Tech question.

Southern that generate <unk> turns out June how golar tundra dabashi she's on photon a survey that says.

Especially in southern Germany, since it's holding its own John's how holdup at this at the back.

Well now turn to call the orders accounted for 76% of total orders during the quarter. Meanwhile, the hot selling products that was damaged with our advantage in the community content and new media such as photo now for the hotels.

Hotel rejuvenation hockey and other categories record of more than 85% year over year.

The average <unk> from online orders.

All of them the online Jimmy for the proton up R&D, even well over 400% year over year.

So since July one that dominates the couch I Rudolf San Diego agenda, including shelter once Johan <unk>.

<unk> sure if I said it.

And it's always hard to call somebody out very much Hugo Shitshow T O.

Youll hook.

In addition, we added so impasse to shop opening and promotional campaigns are newly joined infusion, helping small and medium sized institution with lack of online resources and operating experience to rapidly increase the exposure and improved accurate client acquisition.

So it sounds like <unk> made some conscious assortments I official suitable youll go together to equal your <expletive> women's artificial yeah redundant you contractual tone, so to your face or you will archive. So your official officials when they shop more with us.

Women's health sheet city officials, some with the Belgian one.

Yeah, Paul So youll, whose artificial glenn.

So cogent has its own Pts posed to me. It's as usual you should have a triangle transponder sedan.

Boundary you won't have to do it that officials Honda CFO, Tony Tivo chunky churn shouldn't hold going towards.

In summary, we have mentioned before.

So we are past that.

SAP as we take to enhance contract.

And also <unk>.

Surgical site for.

For the whole nonsurgical business benefited from the rising popularity of Nonsurgical services, we are committed to a standardization of nonsurgical service in the long term.

Dana is enhanced content performance and ensure users to enjoy premium experience of authentic.

Underlying surgical site.

While we are seeking a cooperation trials with absolute manufacturers further happened year to date yourself, there pinpoints nonsurgical categories.

Improving the OLED.

Satisfaction.

And its fate into more medical aesthetics users.

Yeah sure. Thank you.

Thank you.

Your next question comes from the line of from.

Please go ahead.

Yeah.

Hey, Jack on anytime you want with it.

One quick one.

And May you hired.

Kind of a menu.

Thank you too.

Okay.

Shutdown, the chooser challenging one in China.

Q, how minion does he got a young <unk> hundred examples on the table.

I will translate my question.

So my question is regarding to <unk> and sales and marketing.

Just wonder why the reason behind that decrease and the reason behind the decrease in marketing expense.

And what is the marketing and promotion strategy for next quarter and next year. Thank you.

Uh huh.

You cannot use up essentially all the cells as host.

So we don't hold ourselves.

And so youll find it on Sunday July with this hotel.

Thank you firstly due to the impact negative impact of <unk> <unk> of COVID-19, and some large cities consumer confidence was hug and conception weighting events declined resulting in a Q on Q decrease in EMEA.

She's a woman sorry, its unions water Soho T. At all post the tenure and the city Council of Australia.

<unk> got 70 York course, Yolanda juice with some.

Of course, you can do it on a continuum of who you'd.

You can see the trillion dollar of course, you're here in order to hold onto a do it yourself at home.

Secondly, as we already mentioned at the beginning of this year, our marketing strategy in this year is to add.

Colby.

Putting that priority of user quality ahead of quantity.

Which is different from the strategy.

When we focused on targeting new users.

Essentially the woman Youll policies auto function Dol James all shows up in other telephone <unk> hung in the ulcer, he called Tai Shan Shan neither on the yields of the needle size. She thought is for Huntington's hydro or sell with wholesale shortly.

Obviously, how this himself.

Referring to the total marketing fee during the quarter, we optimized our marketing strategy, reducing R&D spending in offline channels and increasing online promotional content leveraging our content advantages and also releasing the premium content on third party platform to enhance effectiveness.

<unk>, our image as a professional madam and.

And the medical platform.

China and.

Some key social causes.

So I'm sure there'll be.

G. HN you ensure that you don't ship unit, which I'll go back in June.

Looking forward to the whole year of 2021 we estimate that the total sales and marketing expense will account for no more than 50% of our revenues maintained the same level as we projected in the beginning of this year.

Thank you Chantal.

Thank you.

Your next question comes from the line of she should keep from CIC.

Uh huh.

He's only been on the call. It sounds to me sounds awful thoughts I saw him with Gen. One feature that you guys can dancing quad.

You should go to the Taro going beyond our comfort that Goldman Sachs have moved 10, Joseph Tung T. Chomp T that you go find out thanks.

Thanks management for taking my question just wondering if you could give us more business update on Ohio Miracle and since you added the business of upstream equipment supply could you. Please also share with us more color about your long term development strategy. Thank you.

Yeah, essentially the warmer months.

She said of Sogou.

She's a crusher, which always Xiang Qin hunting Titan cars Silicones, Washington did say it shows sanyo to watches.

You May Procacci, who you are.

So <unk> Yan <unk> side, you choose a controller to go along with it she was only hotel, where such as Josh and Hugo Kashi onto any hurdle.

In the third quarter, we closed the deal to acquire <unk> medical we have set up a flagship store for Hanmi vehicles on our platform.

And to promote its products to our users and to integrate it put us with so we on Pos.

As of early November so we all had established business relationships with more than 30 institution derived from Miracle network.

When you consider hunter of other functions.

So of course, as you know <unk>, which is equivalent to <unk>.

<unk> <unk> Nagel <unk> sulfate. So she has helped me and Sean <unk> Johnny.

Sure.

Referring to your second question in the past few years, we have made efforts to solve the difficulty after years of decision making.

Providing more transparent information by nominating and optimizing our COO.

Content Ampere hour uses to gain better understanding of matters that extremely professional help address any forward information and Apple.

So you don't really you may be even the Johnson woman.

She is our assumption, Belgium told me what Johnson <unk> human.

You may see you'd be able to follow suit.

Yeah.

Future International taught me, a 50 won't get Yahoo, Samsung Sunshine.

What you've always said you can pay for Shanghai, you may some bullshit tusa balaton with Osaka to yet.

With the refinement.

Our operation our online service will be more.

Standardized and transparent in price, we are able to correctly display to users the place our production usage specification and other information. We also pioneered in offering online right protection at no cost providing advanced compensation and ensure.

During Q4, our relevant medical aesthetic treatment to our users.

Shouldn't that shows a woman who joined Johnson.

Women Glen Johnson, Creditanstalt Samuels handing the call John.

Who are your Shanda penetration. So you didn't sell Lewis Chinchilla, daughter, Youll, Sean So you may see I'll say.

So youll see children.

EMEA shelf to again push or Yehuda you made a huge hole types tissue culture.

Yeah. They shouldn't do you do it when the <unk> charge, how long youre going bonkers suddenly you Mohan yet so.

So I am <unk> Shang so how do you might see in <unk>.

At present, as we better understand the medical aesthetics industry, we are well aware that the higher transaction value of upstream products and the limited a choice of categories have Sal limit for more users treating dry matter of Fedex consumption.

The demand side, we are seeing that medical aesthetics consumption expanding out out of the original user base as the demand for the matter of a Fedex continues to rise.

For the reason, we believe at the current stage, where leverage agents of our platform enhance cooperation with the supply and extraordinary industry enable more users to have access to good medical aesthetics experience and.

And expanded the overall market size.

Thank you that's all.

Thank you.

Is there no further questions.

Brings to the end of our call. Thank you for participating you may all disconnect.

Okay.

Yes.

Thank you connect.

Okay.

[music].

Good morning, ladies and gentlemen, and thank you for standing by for so Young's third quarter 2021 earnings conference call. At this time, all participants understand only mode. After the management's prepared remarks, there will be a question and answer session.

Reminder, today's conference is being recorded I would now like to turn the meeting over to your host for today's call Ms. Vivian Zhou. Please proceed.

Thank you operator, and thank you for joining <unk> third quarter 2021 earnings Conference call. Please note that the discussion today will contain forward looking statements made under the safe Harbor provisions of the U S private securities.

Litigation Reform Act of 90 95.

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 to those outlined in our public filings with SEC, including our annual report on form 20-F.

So we haven't does not undertake any obligation to update any forward looking statement, except as required under applicable law.

Joining us today on call are Mr. Xing Jin, our co founder chairman and CEO and Mr. <unk> our CFO.

At this time I would like to turn the call over to Mr. Xing Jin co pays.

So does it cause you Doug outside Java.

Thank you.

Okay.

Thank you all for joining our earnings call for the third quarter of 2021.

Essentially though sorry, it's somewhat overdue Shang guang Gianfranco pretty usefully engine shop, well managed tissue tissue and she didn't tool it until it isn't.

With all of those agendas, how will gotcha Showtime sedan ssangyong.

Somebody a junior until she chose Alabama Joshua.

Maybe for Tony on quite returned to O, especially you see on that Tony runs a downturn, thereby Joe Sheila.

Xiaomi Chilean Torchy Jones on behalf of mutual Danielle.

We continue to execute our growth strategy during the quarter and are pleased to deliver solid financial footing.

Despite the challenges and impact of COVID-19.

In parts of China.

Revenues grow to RMB $431 5 million in line with our play out.

<unk>, an increase of 20% from the same period of 2020.

Now again net income attributed to so we are international Inc. Was RMB 28 nine minutes.

An increase of nine 6% from the third quarter of last year.

Sunday to coordinate those latasha CYMBA and chose a cool logo.

<unk> self infusion.

Phone call choices out.

It's also on locally himself kimberlite routes women's Jason you May had a challenging two loss at whole chunky.

In the third quarter, the resurgence of COVID-19 grew several cities across the country, resulting in weaker than normal consumer sentiment and heightened the containment measures had a negative impact on our business having.

Having said that we firmly believe that.

The long term outlook for the medical aesthetics industry remains strong and intact.

Gabrielle.

Uh huh.

Sanjay <unk> pardon me and that's really all you would think that well I'm doing you know what you call it Tony.

So you go to a few pages.

Our balance sheet prudently, so all sorts of Hollywood.

Yeah.

Who say you know what you call it showed that our September especially in.

Somebody Ciena and she does tend to ensure smooth it turns out avenues survival.

Cohorts, who Jamie So it's also who you are.

So solid.

Since this issue is how do you see I mean, it's always associated to that.

So you might you know 14 part.

He was here for a total of about Suitland Sundar combing through the armed passenger oxygen.

And are you doing.

Oh, Okay sure.

You know who will say the geological showdowns that all down shutting down that surcharge out Chilean Torchy, Raytheon say goodbye, especially were down less.

Let's talk about our strategy progress on our operation during the quarter.

Firstly, our team worked tirelessly with tirelessly with institution to increase brand advertisement on the platform with the aim of improving conversion rates the.

The number of paying medical service providers on our platform was 4841.

Kris.

82% from 4000.

<unk> 96 in the third quarter of 2000, Twenty's Joey has become the Premier one stop comprehensive medical aesthetics and medical service platform to facilitate pre sales and up sell services SaaS.

SaaS closing the information gap between online and offline demands.

Information services revenue maintained daily growth, increasing 21, 1% year over year to RMB $321 6 million.

The number of medical service providers subscribing to information service was 2242 up from 2146 in the prior year.

So you would hear from them.

So you're telling me to some content you talk I'll quote you got shield spin or those sorts of anomalies Georgetown's showed you about ETE.

Nuclear in parallel commensurately touch on until July so she nagel.

In terms of user experience with a few key areas strengthening the digital kept pellet tap capabilities of <unk> platform, increasing personal data protection and improving the customization of community content based on individual for Barrick and the purchase.

See behaviors.

So the official farm yet your quarterly facial shovel issue. So there was a long so.

Well then it's usually it's only option herself as Kyoto surely oncology Youll, Washington, Sanjaya TN someone's.

Sure.

Toby issue torture Fugard coupon codes, you told me the Choctaw.

Hey, Judy.

She was older than <unk> challenge from Kimco, cocoa, which endo. So while so you saw the Belgium hot or not can you handle cohorts I show some signs of the bulk will change with Enzo Yaacov and Hadar Georgetown law. So as you saw so Joe Yeah, 10 times. So you saw some large scale shutdowns help us fulfill what xiaomi ciena.

Unfortunately, he is all about Josh look essentially the same so yeah, we'll show some T cells, which all told about the newest strategic Chilean coal Chile passengers.

On the non surgical product sites desktop.

Celerity of Nonsurgical categories remains high in terms of user demand.

We further increased the number of Skus on our platform to optimize the online transactions.

With more transparent pricing and an attractive incentives for the users.

Particularly as a way to reward our loyal repeated users.

Our online.

Action project.

<unk> gained much traction and demonstrated progress in brand loyalty as we continue to strengthen the management and control of that authenticity and the supervision of achievements and services.

Alongside the standardization of now surgical procedures.

As of September over 140000, now surgical Sp years.

Will that have on our platform an increase of 26% compared with the same period last year as a result third quarter revenue contribution of our <unk> business increased to 49% of total revenue up from 43% in the third quarter of 2020.

Sure Bob Thanks, Osama, Belgium, how that whole suite.

She is bound to Chico Georgetown.

Sure Bob talking to somebody who remain challenged CCT adults are essential to us is not so hot warm investments onto its earlier. Please don't do a poll question Nigel.

And you will put home Coco as usual separately, we've worked to ensure consistent standardization of non surgical procedures and service, while helping institutions to enhance contract performance and authenticity of high quality service.

We will continue to grow our market share in announced surgical categories and expand our go to market strategy by introducing more offloading and popular products that address different customer needs.

Sure.

So sean or maintenance issues as you why are you <unk>.

Conversely, you called out women's size socially.

<unk> shum pull up he pay attrition issue you show, how youll boundary Youll Hauck <unk> <unk>.

To a flight hour operation in the surgical categories, we allocated more resources to support back to both doctors and expand our advantage in this area.

Xiaomi I don't yourself Hudson CEO without changes.

<unk> essentially those lines and she'll go tell you since the soco jointly called out women that you've got a lot more Georgetown.

<unk>, yet posted to John's Hawaii women, partially you're going to see here if you can touch.

Some of those off.

So this is somehow consolidate that.

One teacher, which Youll Joshi options, such as Jim did you mention.

Jim.

She knows hunting.

So you get a true <unk>.

And she said well that's why don't you go long ago, She's only telco essentially Josh and vehicle Kashi on Jennie O Joel.

Now I would like to give you update on our business integration with Hanmi recall laser systems.

Close the deal in the Middle of Q3, the acquisition of Aloha Miracle has helped us expand our institutional network for.

Filming of service and is a great example of our strong growth strategy exploring collaboration opportunities with equipment and device manufacturers as well as magical addressable.

We have set up a flagship store.

<unk> also announced platform and added online products too so we have Pos.

As of early November so we are having established business relationships with more than 30 institution derived from Hanmi logo network.

So I'm hopeful that John called out kind of year, almost pseudo grimoire changeover in Shanghai Samsung sedan.

Yeah, So on Carolina El Corte <unk>.

Going forward, we will scale this service model and seek opportunities with upstream product provided through trials that will connect to them directly with many of our users.

Gen one's home yet.

Jim Let me add to Niccolo.

Hope.

Hi, it's John challenging times.

We showed you a quote on the.

So your so called Yugo, Cecilia and good and in some cases.

Okay.

Yes, she would have gone down and then go to <unk>. So you might you know hired earlier this year. When my first answer was a woman sorry since you've owned <unk> for.

Which is it is a tissue.

Non gold bounds.

Chico tissue coalition pool table, they'll do hot Chicago.

On the regulatory front, we remain close communication with regulators and for our industry guidelines by promoting self discipline on platform governance conducting stringent internal review Mckesson mechanics, and our doctors and institutions our database.

And facilitating vitaros approval of SaaS.

And our service offerings as a leader in the medical aesthetics, and a matter of industry, we particularly focus on the accuracy of the online information we provide on <unk> services.

Our institutional partners with compliance audits and promoted the standardization and alterative Amazon.

Midstream.

So he on a mobile society.

Sure Heath JJ <unk> produce and of course it doesn't.

It will be if you tie because I'm sure some of them will.

Well no quake, Josh so to even the leap.

Turning to hook <unk>, Joseph who she.

Your thoughts on your mind sure Sunoco, daughter, Yoko Kodak Pontiac <unk> Suez elemental Jaguar today, so she lives.

Fortunately, we don't quote up well Magellan table and reaches all hung in Belgium for pizza.

To summarize so we our goal is to provide the comprehensive magazine.

And Matt information that will resolve inflammation a symmetry within the industries. Meanwhile, we are developing our <unk> platform to enhance our cooperation with upstream product suppliers.

In addition, we are strengthening our community operations Kevin.

Commodity ample supply and an improving overall user satisfaction rates by facility consolidating rather at Ada service in the treatment execution phase.

We believe this will help us extend our reach to a growing number of <unk> users and a range of size of total addressable market.

As we continue to grow our reputation as the most attracted a matter of aesthetics and a matter of peer platform in China. We will further strive to raise the standardized our standards and the quality of the industry.

Some of them show them and this therefore, you mean just saw suddenly told US how would you hope so homes El Paso affiliate on here let.

Let me <unk> to give us elevated obsolete.

Okay.

Up to the QA. Thank you. Thanks, Chris please be reminded that all amounts quoted here will be RMB. Please also refer to our earnings release for detailed information of our comparable.

Financial performance on a year over year basis for the third quarter Tucson in 'twenty one.

Total revenues were RMB, $431 5 million up 20% year over year.

From a RMB $360 million in line with our previous guidance.

The increase was primarily due to increasing the number of paying medical service providers.

And the consolidated revenues.

Of the $48 1 million in 'twenty, one Q3 from a miracle.

The number of paying medical service providers on the platform with 4841 increased 18, 2% from.

4096 in the third quarter of 2020, the total number of medical service providers subscribing to information. So this is all filling his platform was 2242 during the quarter compared with 2146 in the third quarter of 2020.

Within total revenues information services and other revenues.

$369 seven minutes up 39% year over year from RMB $265 7 million.

2020.

A decrease of three 7% from RMB $335 1 million in the third quarter of 2020 sales and marketing expenses were RMB $190 7 million.

Down 13, 9% from RMB, $221 6 million a year ago.

Primarily due to the decrease in expenses associated with branding and marketing activities sales and marketing expenses, including share based compensation expenses of RMB, two 2 million.

We've RMB $2 $2 million in the corresponding periods of 2020.

G&A expenses were RMB $54 7 million up eight 7% from RMB $53 million year ago, primarily due to the consolidation of general and administrative expenses of 400.

G&A expenses, including share based compensation expenses of RMB 10 million compared with $12 2 million in the corresponding period of 2020.

Research and development expenses were RMB $77 1 million up 22, 1% from RMB $63 2 million a year ago. The increase was primarily due to the consolidation of the research and development expenses.

For her medical.

R&D expenses for the third quarter of 2021, including share based compensation expenses of RMB one <unk>.

Compared with RMB six minute in the corresponding period of 2020 income tax expenses was RMB four 3 million compared with RMB $16 3 million income tax benefit in the third quarter of 2020.

Net income attributable to <unk> International Inc.

Was RMB six 8 million compared with net income attributable to so young internationally into RMB <unk> 9 million in the third quarter of 2020.

Non-GAAP net income attributable to <unk> International was on the $28 9 million compared with RMB $26 4 million in non-GAAP net income in the same period of 2020.

Basic and diluted income per ads attributable to ordinary shareholders were RMB is 0.06, and RMB 0.06, respectively compared with <unk>.

<unk> zero, one and.

0.01, respectively. During the same quarter of 2020.

Now for our balance sheet.

As of September 32021, we had total cash and cash equivalents restricted cash and term deposits term deposits and short term investments of RMB.

1.8 billion compared with RMB 2.7 billion as of December 31, 2020 for the fourth quarter of 2021, So young expects.

Other revenues to be between RMB $430 million and RMB $450 million representing.

One 3% to 6% increase from the same period of 2020.

The above outlook is based on the current market conditions and reflects the company's preliminary estimates of market and operating conditions.

When a customer demand. This concludes our prepared remarks, I will now turn the call to the operator and open the call for Q&A, operator, we are ready to take questions.

Certainly.

Participants who wish to ask a question. Please press star one on your telephone and wait for your name to be announced.

If you.

Ask your question in Chinese please repeat.

In English immediately.

Well it says it wasn't any challenges on what it would have been issued.

What I meant.

What are your geography and your thoughts.

<unk> got the.

<unk> gone, there didn't Guatemala, and Guy Baber Zama.

Thanks management for taking my questions I have a question on about the regulation side.

Comments about the guidelines on magical and instead of co op advertising law enforcement as well as the brand opened regulation Bekele HOA situation. Thank you.

Yeah, you know Mayo now post CTO he'll also shippers shellfish issue. So you will find our Suzhou Hangzhou Guangzhou juices in the mill.

Many local oncologists lots of non Covid.

Can you follow.

Once you're there you ship all hula shelf either the whole country.

As matter of aesthetics has both magical nature and consumption nature. The guidelines are medical anesthetics advising law enforcement easier to buy the FAA EMR.

The state administration for market regulation.

Maintain the order of the matter of aesthetics market and a truly protected that event right and interest of consumers.

Joey Jokwe, along EMA 14 pie he onside Hugo who downwash issue food of course, Hangzhou, John Young Girls Rachel.

Congrats to advancing <unk> gradient.

South Asia, China, Paul Hooper.

Some final.

Finally found greater liquidity.

On the shelf Angel <unk> GT can sheet, all caught Chaco tsunami wave of adult bean chime in tissues and chip just said Hello, Sam team for so Paulo.

Although in South Asia, the tissue in Shanghai, Shanghai, China.

So all my service platform for medical aesthetics, we will scrap.

They followed the requirements of law protection of consumer rights and interests ecommerce law and other laws and regulations as mentioned in the guidelines as we provided the online information services.

Will that consume applied a specific information of products, including price performance specifications and a disclosure of information of their products or services in the comprehensive Jeannie accurately in a real time manner.

Posted material guarantee the writer node and the right to choose all consumers.

Post or me a way, it's easy to resolve Susana <unk> <unk>.

You cannot just Hudson under its adopt Tibor Tianjin being Johan Labor Soho jeans.

Total.

Great.

Sure.

Hum clarify you issued a final one Jim.

She knows really how you don't see it sort of hurts you hired solution with a few high yeah, you're right Chico telephone foreclosure, but now your product or to shoot gonofone she can shop.

Yes, thank you very far away.

Minimal change I.

Paul it's off the shelf edge or Chinese my question to you.

Chico are yet to Cotai telephone shootouts Foundation's El Al Queda congestion, Joe Shan Shan <unk> column.

Meanwhile, we will proactively followed the guidance to our guidelines to further establish and optimize.

Yes.

Take the imitation.

The initiative.

<unk> elite co promotion information.

And to maintain the standardization and all of our development.

As the platform, that's starting to reflect the place and the continuous they conduct self discipline.

We believe.

You should not see the consumers buy X aggregation or.

Information marketing and consume acquisition, we strictly forbid illegal promotion information and it take protection of consumer rights and interest.

Our institution they will tend to have more options.

No and compliant platform when choosing marketing channels.

Tier like hot so Julio Gamble, Jim glass, you'll leave you to.

<unk> Xi'an jewelry also.

John Jenson, Italy team, who understands naval ship, which is true.

<unk> you may have.

Yes.

Reservations are positive to the healthy development of industry at.

Leading the industry with us.

Extra self discipline further improve our internal review mechanic and the dry medical aesthetics to return to its magical nature.

Yes.

That's all thank you.

Thank you.

Our next question comes from the line of Nelson Cheung from Citi. Please go ahead.

Okay.

Yes.

Okay.

Yeah.

Nelson Your line is open you can ask your question now.

Okay.

Nelson if you're muted your line. Please on mute your line and ask your question. Your line is open.

Yeah.

Nelson Your line is open you can ask your question now please.

Okay.

Nelson from Citigroup. Your line is open you can ask your question. Please on mute yourself way ask your question.

Chandler.

Yes.

Uh huh.

She said why do you think that you went well what they want to use with Glenn you Yung King from it.

I'm kind of a Q2, you'll see.

Gotcha.

Okay.

Here again.

Tanya that kind of Ah Ah moment doesn't seem to me that you'd see that I suppose so let me translate myself so expense management for taking my question. So with the recognition of recognition of revenue this year.

Can management share the reasons behind them.

And what what's your expectation, but in a long term trend of this business going forward. Thank you.

Yeah.

I know you each generation essentially all those other things.

Hi Dalton.

South Asia huge chunk of your charge offs, Utah human cells.

Thank you firstly due to the resurgence of COVID-19, some mega cities consumer confidence is weaker than normal ended their weakness too.

<unk> is not that strong is impacted the medical aesthetics market market.

Yes.

Jason you may south a too selfish with.

You'll recall, Danielle I'll call to Portland house or they won't.

<unk> in the future.

We've got some dollars sheet autos is healthy.

Each unit.

Young good bundling video.

Video solution to a full front of where the economy is healthy. It's also on the July.

Some are delayed the price format of a set extreme and is generally expensive and some consumers need to taste prostate to travel to get the treatment. The containment measures in some cities prohibits their movement.

Essentially the woman.

Chico Sundar.

John told you go touch on the solo Hugel color you won't see them cope with here, though it sounds hook or did you go nuts, how you're doing the adagio quadrant, which I think.

<unk> got some cheetah goodwill in.

In the meantime in this Q3, we tested new promotions with selected institutions, we encourage institution to expand inventory and give more rebates to users, making them have more incentive to face orders on.

Okay, you cannot say tied you call Youll see in Gulf of Children's Hotel, Joe you talked about your just your thoughts I shared with you on the Xiaomi Sangria adagio familiar with actual Cynthia Jones on other avenues are still her patterns, which is about your whole code anja shall be saying that onshore Hollywood actual Sunday its own down that pathway.

It's used to live her preferences. Thanks, Joe.

As a result, and as a new promotion GMB of online transactions in September was 19, 6% and 78% higher than that in the March and June respectively.

<unk> was.

76% and 39% higher respectively as well.

It's high on condo shows a woman Shan Shan Shan herself with Yana Tivo chimed in Belgium.

Yehuda will metrology Chung Shan Shan Shan.

And you're right.

Sure.

Put out there a holdup challis Ritchie and volatile you'll put out its own pinball top sorry, the people doing the Shanghai shows on Sephora Taylor announced their father, who don't show them, how they Asia choices that you called out that Tivo Chico the charges on my shoulder.

Over the long run with a better user experience and the standardization of our product offerings, we will enhance the fulfillment offering online transaction and extend our service to offline ensuring user gets the authentic products for institutions using online came in service will be a positive factor.

If they want to <unk> and accomplishing.

The harvest led to user place order online.

That's all thank you.

Yes.

Yeah.

Thank you. Your next question comes from the line of Vincent Yu from Needham and company. Please go ahead.

So as you point, you would not even factoring that all about.

<unk> got a whole world that even once you go to Egypt, Egypt a hole.

Obviously, we can't pay as you go blank blank did you.

He can go fast food.

You.

Ultimately.

So that's the Waddington number then Jacob and shopping for choosing with whom <unk> done.

People will medical guidance.

Okay.

Some of them will make that kind of the Keystone system.

No.

I will mention that.

Sure sure.

Okay.

Yahoo ones, you should probably get you don't need to do that.

That sounds.

So maybe we'll just see.

Sure.

Just your financials will name with <unk>.

Hi management. Thanks for taking my question. My third question is about the impact from COVID-19.

COVID-19 resurgence continue to impact our business operation can management share your view on this impact on fourth quarter, especially on user base.

And also for the next year would you see for user growth and revenue growth. My second question is about it progressing so young past compared to surgical categories, which piece.

Actually impacted by COVID-19, how is the growth trend with Samsung and.

Sure. Thanks.

No shelf with Opdivo in sheet.

So since you don't know him and Condor pool. That's also the issue of on time is how Lusaka youll start alert on CIT opportunity issue.

<unk> issued a gunshot 70 this assumption.

When you see somebody, Ohio, Joseph Shiner, Youll tell Joe Judy it's onshore.

Thank you for the first question in Q3 and Q4, the rebound of the damage in some cities broad short term uncertainties to our business. We are monitoring the development of the market and we'll make adjustments to our marketing strategy timely.

So do you mean, so you're your official Central Asia.

So volume socially Xiaomi also there due to some women's artificial sanya, which issued since you're going to need to do in Italia Portrush in Darfur taught us is also.

The Q4 and next year, we believe the popularity of non surgical category will maintain its momentum.

Well solid define our existing strong position our surgical site.

Executing our established strategy I'll now surgical site penetrate into more markets and gain market share.

Of course, Virginia, you met her father CTO team. So that's one of our diet on the MAA socially.

Maybe I'll show you some sort of shape you see you know Jay with them, but the initial.

Sure Tony you May Javier houses have been shot so he Belgium.

Voice of Haynesville do you does your job easier.

In China, you're doing some lusaka yellow Yehuda selfish.

Post two minutes, you should or T cells could hope with one simple tradeoff email, which is all off of Belgium hydrogen cells.

In the past several years the main driver for the growth of matter was that industry came from the plastic surgery because of these surgeries and now standardized now standard treatments the quality of which is largely depended on certain doctors. Therefore, the status of the industry remains fragmented.

With no.

With no Union Marcio standard <unk> poor service quality.

COVID-19 by some degree had changed user behavior in the meantime, the advancement of the technology of life aesthetics.

An expanding user growth acceleration in the development of the digitalization and the standardization of the industry.

Well the Chongqing, so you choose the liquids are available.

Chase how do you go from car T cell Joseph Osha appeal.

And then a leap.

Starting with the.

She's just survey in Samsung She all car taught you say, who the <unk> shock the COVID-19.

How are they utilize him quite soon shop.

We believe such trend to continue in the next five years institutional reply to improve their macro scale and service quality, while the upstream equipment and it dropped providers want to increase their exposure.

And brand influence to end users both of them will need more service from our platform.

Thank you Thiago when Sheila.

It took us as home furnishing and cashes Joshua young children tastes wonderful Guy that's either.

Hi.

Yes. Please go ahead Gartner tissue challenges with regard to see you go towards the towards the adult and CTO more telco with sugar.

So George you go short challengers for the agile storage logical quota Adolfo <unk> volume, which is logical.

Cause I forgot somebody that understood yeah type without Johan it to kind of <unk> that you mentioned.

Operation for the OEM past awards, starting last October and the number is Colorado has expanded to over 50.

From the never ending.

Corporate institutional also increased.

250 from Nike excellence, while spending the coverage we are continuously optimizing service hearings and a popular category obviously on that.

So officials.

Orlando officials deemed as essential.

So that is fully on the pathogenesis of Lilly Pulitzer can you conduct your whole woman does such a narrow automated so you don't use it.

Those are the Balkans hunting youll photonasty content and therefore don't question here late.

So I don't know Jim late <unk> turns out June how golar tundra dabashi she's on photon a city that you quote, especially.

Especially in southern Germany since <unk> Tabak.

Well now start to call. It the orders accounted for 76% of total orders during the quarter. Meanwhile, the hot selling products that were established with our advantage in the community content and a new media such as photo and therefore the.

<unk> termination hockey and other category record of more than 85% year over year.

The average <unk> from online orders.

Among them the online GMB for the per ton up or.

Even well over 400% year over year.

So since July.

Dominates the couch I Rudolf surgical agenda and claims you'll take once Johan.

Although Asia sure if I've said it I'll tell you.

And it's always hard to call. So thank you all very much Hugo Shitshow T O unquote usual hookup.

In addition, we added so impasse to shop opening and promotional campaigns often yearly joined infusion.

Helping small and medium sized institution with luck online resources and operational experience to rapidly increase the exposure and improved accurate client acquisition.

So it sounds like <unk> made some conscious assortments I official do Im sure Youll go together to equal yes women's artificial yeah, we're done that equals Russell tone. So to your first of all your lifetime. So your official officials relay xiaomi.

It doesn't pencil women's health sheet silly facial shama the Belgian one.

Yeah, Paul So youll holds artificial Duane.

Sean So cogent has its own Pts post <unk>. So you should have cycle times on the sedan.

G boundary Yaacov <unk> officials on the CFO, Tony Tivo chunky churn shouldn't Holdco, daughter, you mean.

In summary, we mentioned before.

So we are positive.

That as we take to enhance contract.

And also <unk>.

Now surgical site.

The whole nonsurgical business benefited from the rising popularity of Nonsurgical services, we are committed to a standardization of non surgical service in the long term continuous enhanced content performance and ensure user clean Jai premia experience of authentic product under long surgical site. Meanwhile.

We are seeking a cooperation trials with absolute manufactured further helping youth it yourself, there pinpoint nonsurgical categories, improving the OLED.

This section.

Penetrating into more medical aesthetics users.

Yeah sure. Thank you.

Yes.

Thank you. Thank you.

Your next question comes from the line of Dr. Cheng from <unk>.

Since COVID-19.

Yeah.

Hey, Jack on anytime you want with it.

One quick one for me.

May you hired.

Oh.

Kind of a menu.

We do yes.

Yeah.

Sat down nutrition challenge moving past Q, how many in does it got young who has been on the table.

And then my question.

So my question is regarding to <unk> and.

<unk>.

Just wonder why the reason behind the decrease and the reason behind the decrease in marketing expense.

And what is the marketing and promotion strategy for next quarter and next year. Thank you.

Uh huh.

You cannot use essentially all the Soviets host Eagle Ford time, So we don't hold ourselves.

So when you answered <unk> pharma on Sunday July with this hotel.

Thank you firstly due to the impact negative impact of <unk> <unk> of COVID-19, and some large cities consumer confidence was hug and consumption weighting events declined resulting in a Q on Q decrease in EMEA.

Just on the insights and an inch water Soho Tito <unk> Super helpful.

Societies, all 71 course, Yolanda juice with.

Of course, you can do it youll sell down of course email.

So your children horses here in order to hold onto a do it yourself at home.

Secondly, as we already mentioned at the beginning of this year, our marketing strategy in this year is to add.

More COVID-19.

Putting the priority of user quality ahead of quantity.

Which is different from the strategy when.

When we focused on targeting new users.

Essentially the on your policy auto function Dol, James outlaw she's shopping habits wholesale deals as soon as I know hung in the ulcer Tikal Tai Shan Shan neither on the top yards of the needle inside she thought is for huntington's hides or sell with wholesale shortly.

Hi, This is John.

<unk>, our image as a professional matter of a Fedex and a medical platform.

China and.

Some key social ecosystem.

Solar PV <unk> CTO shipping with our <unk>.

Thank you Chantal.

Okay.

Thank you.

Your next question comes from the line of <unk> from CIC.

Uh huh.

He's only been on the call it sounds you're right panel so Dorothy I shall ask him with Gen. One feature that you guys do Nancy.

You should consider taro going beyond our comfort that Goldman Sachs have moved 10, Joseph Tung T. Chomp T that you go find out quickly.

Thanks management for taking my question just wondering if you could give us more business update on Morocco, and thank you added the business of upstream equipment right could you. Please also share with us more color about your long term development strategy. Thank you.

Uh huh.

The woman.

She said the silver tell you choose a crusher, which always Xian Chongqing height, K silicone, Washington did say it shows Sanyo to Washington Post you may have to couch it.

So your question so Joe consultants yet.

So you guys cite you choose your control that you're gonna want model she's.

<unk> seen Hugo Kashi onto any hurdle.

Uh huh.

In the third quarter, we closed the deal to acquire <unk> medical we have set up a flagship store for Hanmi will call on our capital and to promote its products to our users and to integrate it put us with so we on Pos.

As of early November So you had established business relationships with more than 30 institution derived from our medical network.

When you consider hunter if other phones.

So of course, it's easier now <unk> tissue producers.

So accordingly.

<unk> <unk> Nagel <unk> sulfate. So she has helped me and Sean <unk> Johnny.

Referring to your second question in the past few years, we have made efforts to solve the difficulty after years of decision making.

Providing more transparent information by nominating and optimizing our COO.

Ambarella uses to gain better understanding of matter of <unk> extremists with professional help address any forward information level.

So you don't know you may be even the Johnson woman.

She is our assumption does Belgium told me, what Johnson <unk> Creek unit.

You may see you'd be able to follow suit.

Yeah.

So it's hard to say to you won't get Yahoo, Samsung Sunshine.

What you've always said you can pay for Shanghai, you may some bullshit tissue Balaton, who does all of it yet.

With the refinement.

Our operation our online service will be more.

Standardized and transparent in price, we are able to correct. The latest later users replace our production usage specification and other information. We also pioneered in offering online right protection at no cost, providing advanced compensation and <unk>.

During Q4, our relevant medical aesthetic treatment our users.

So does that shows a woman who joined Johnson.

LG women Glen Johnson Creditanstalt, some yields handing the call John.

Hello, Youll Shanda population, so you're going to lose our Shenzhen, daughter, Youll, Sean So you may shelf.

So youll see children.

You may shelf. So we can push our Yehuda you made a huge hole types tissue culture is.

They shouldn't do you do it when the Ali you won't even how you judge how are you going into Dawn corridor suddenly you mean higher <unk>.

So I am <unk> Shang so how does <unk> put on some cases.

At present, as we better understand the medical aesthetics industry, we are well aware that the higher transaction value of upstream products and the limited a choice of categories have set limits for more users to enjoy matter of aesthetics consumption.

The demand side, we are seeing that in medical aesthetics consumption expanding out to our regional user base as the demand for the matter of a Fedex continues to rise.

For the reason we believe at the current stage, we will average ages of our platform. He Hess Corporation with the supply and explore into industry enable more users to have access to good magical experience and expanded the overall market size.

Thank you that's all.

Thank you.

There are no further questions.

Brings to the end of our call. Thank you for participating you may all disconnect.

Thank you Omar.

Okay.

Yes.

Thank you connect.

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