Q2 2022 So-Young International Inc Earnings Call

We are confident that once the market or consumption is recovered, we will still be able to acquire new customers in the market. That's why we still need to see the economic development in the next couple of months. Hopefully, everything can have much more satisfactory conditions in the fourth quarter, which can have a better performance to the year. So I think that's the best estimate I can give and hopefully it answers your question. Thank you. Our next question comes from Leo Chang with Virtual Bank. Thank you, management, for taking my question. First question is, we see the number of paying service providers still grow robustly with COVID-19. Can management share the reason behind the growth under the top quarter? My second question is about So Yang Select. Can management share the monetization model for So Yang Select and are we expecting to see the revenue contribution in the second half? Thank you.

For the pain that is provided, I think because in the second quarter in Shanghai and Beijing, those large cities used to be very important or takes around the top four cities have chunked around 30 to 34% of our total revenues in 2021. And all of them have impacted by the COVID-19. And we tried to...

help the service providers recover from the pandemic. And also we have different, we improved our operating policies or strategies in the lower tier cities to help service providers to get back to the full platform and trying to acquire customers from our platform. So we have different policies to let them have relatively lower cost and high efficiencies to acquire customers.

It helped to recruit...

lower tier cities service providers to the platform and hopefully they can get return for their investment and get new customers in next few quarters. We will see in the future as to how the trends can consist. But still we will be very conservative because of the

I think the macroeconomic committee is still very challenging and we will try our best to help customers or service providers to survive and get back to the regular business in the next few quarters. And for the second question, so you are on select. It has been a new product we rolled out in July .

And still it's currently testing in the six cities I just mentioned in the remarks.

From current data, if a big health...

to improve the service providers user conversion rate. And we will keep tracking the data. And although I have to say currently I can't disclose more on data, how the revenue contributions are because of the story on select, probably in the third quarter financial results we will see more color.

That's very helpful. Thank you. Thank you.

Thank you and once more if you have a question please press star then 1. Today's next question comes from Chloe at CICC. Please go ahead.

Hi, management. Thanks for taking my questions. So congratulations on the solid result of the second quarter. So my first question is about the R pool. So we have seen a 42% decrease year over year on the R pool for the service providers in the second quarter. So should we expect the trend to be continued? And my second question is that we acquired the Wuhan Miracle in the third quarter 2021. So could you

Please give us some more color about the synergy and what is the future prospect of Wuhan miracles? Thank you and Someone is going to be in line to theThis is the first version for us to watch this.

Okay, for the first question, are proof of service provided?

I think it's been enough.

To be frank, that's because of the...

I think service providers invested less because of the COVID impact. It's saying like us, we invested less in sales and marketing on other platforms as well. So it's being a very prudent approach.

to do better cost control.

For the future, that decreasing trend can consist.

In the past couple of months, including June and July , I think the country in August , we are not seeing further decreasing in terms of...

for these providers spending on the platform.

But gradually or slowly recovering, that's the current trend. I think it's also in line with the currency economy recovery trend.

Hopefully...

when all the pandemic

impact.

or the pandemic control policy being loosened. I think it's the

I think service providers will start to invest more on the platform. And the app will also be back to a normal level.

And for your second question for the Wuhan Miracles images.

We have tested new approach in terms of helping the Wuhan Miracles product better approach the end users on the platform. And we do see positive signs. And there is new products by Wuhan Miracles pipeline and we will also apply the policies or the cooperation together and help the new product being better accepted by the platform users and also by the market.

So, although I think it can not currently be seen or reflected from the financial numbers.

We do expect that we'll have a better result in I think in 2023 rather than in 2022.

Okay, thank you, very helpful. So I will have a next question. So about our pool, I'm wondering is it a decrease? Is it related to like we are exploring the lower tier cities and the institutions that are paying less than the higher tier cities?

Wow

I think the major reason is because of Shanghai and Beijing. These two cities account for, the top four major cities account for 35% or 30% of the total revenues in 2021. And in the second quarter, Shanghai, basically we have no revenue in the full quarter. And in Beijing we have like a third.

of the revenue because, or half of the revenue, regular quarter revenues because of what

or half of the regular quarter revenues because of the COVID.

I think other than those impact for those lower peers cities. They have been spending or invested in very stable status. So they didn't spending more but also we also not seen. They are decreasing their spending on the platform but the wjor C ities have impacted materially. So I think if.

being back to normal, the Shanghai institutions will spend more and we will see the optimal recovery from those major cities.

Okay, many thanks. I have no further questions.

Thank you.

Ladies and gentlemen, this concludes our question and answer session. I'd like to turn the conference over to Vivian Xu for closing remarks.

Well, thank you for your participation in today's conference. You may now disconnect and have a good day. Bye. Thank you all. Bye.

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