Q3 2023 So-Young International Inc Earnings Call
Speaker 1: Ladies and gentlemen, thank you for standing by for So Young's third quarter 2023 earnings conference call.
Ladies and gentlemen, thank you for standing by for so Young's third quarter 2023 earnings conference call.
Speaker 1: At this time, all participants are in a listen-only mode.
At this time all participants are in a listen only mode.
Speaker 1: After management gives their prepared remarks, there will be a question and answer session.
After management gives their prepared remarks, there will be a question and answer session.
Speaker 1: As a reminder, today's conference call is being recorded.
As a reminder, today's conference call is being recorded.
Speaker 1: I would now like to turn the meeting over to your host for today's call, Ms. Vivian Hsu. Please proceed, Ms. Hsu.
I would now like to turn the meeting over to your host for today's call Ms. Vivian Xu. Please proceed in this year.
Speaker 2: Thank you operator and thank you everyone for joining. So young 3rd quarter 2023 earnings conference call Join me today on the core is mr. Shin Jing our co-founder chairman and CEO and mr. Nick Zhao CFO , please note that the discussion today will contain Forward-looking statements made under the safe harbor provisions of the US private securities and the litigation reform act of 1995
Thank you operator, and thank you everyone for joining so yes third quarter 2023 earnings conference call.
Joining me today on the call is Mr. Xing Jin co founder Chairman and CEO and Mr. Chow CFO. 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.
Speaker 2: forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations.
Forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations.
Speaker 2: Potential risks and uncertainties include, but are not limited to, those outlying our public findings with the SEC, including our annual report on Form 20-F.
Potential risks and uncertainties include but are not limited to those outlined in our public filings with the SEC.
Our annual report on form 20-F.
Speaker 2: So, we understand that it does not undertake any obligation to update any forward-looking statement, except as required under a paper law.
So young does not undertake any obligation to update any forward looking statements, except as required under applicable law.
Speaker 2: At this time, I would like to turn the call over to Mr. Hsing-Jing. Test, please.
At this time I would like to turn the call over to Mr. Xing Qi cash piece.
Speaker 3: Hello everyone, welcome to Xinyang's 3rd Financial Transformation Conference in 2023. In the 3rd quarter, Xinyang was under economic and environmental pressure.
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Speaker 3: Finance and operating performance are stable, and the total income has reached RMB3.9 billion, and has increased by 19%, which is in line with the company's guidance. At the same time, we have successfully managed costs and expenses.
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Speaker 3: The profits will continue to improve. Under the US Accounting Regulation, the net profit of listed companies is 18.3 million yuan. Last year, it was 2.3 million yuan.
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Speaker 2: Hello, everyone. Thank you for joining Soyang Third Quarter 2023 earnings call.
Hello, everyone. Thank you for joining silly on third quarter of 2023 earnings call.
Speaker 2: Our business remained resilient and delivered solid financial and operational results during the quarter despite microeconomic headwinds.
All our business remained at receipt and and it delivered a solid financial and operational results during the quarter.
Baidu microeconomic headwinds.
Speaker 2: Total revenues were RMB390 million, an increase of 19% year-over-year, and in line with our previous guidance.
Total revenues were RMB 390 minutes.
Increase of 19% year over year and in line with our previous guidance.
Speaker 2: probability also continue to improve thanks to our care for management of our
Profitability also continued to improve since to our careful management of costs.
Speaker 2: That income attributable to So Yung International Inc. was RMB 18.3 million compared with RMB 2.3 million in the same period last year.
Net income attributable to so we aren't international E.
RMB $18 3 million compared with RMB 2.2, and many in the same period last year.
Speaker 3: Next, I will share two thoughts and judgments on the market trend for the future.
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Speaker 3: We believe that the US-China market will develop in two directions. First, the US-China market will gradually show a clear two-stage dividing trend.
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Speaker 3: Second, the Qingdao and Yimei markets will continue to grow at a high rate, and the market size will further increase. Based on the above judgment, we have also made corresponding changes in the business direction.
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Speaker 2: I would like to start by sharing my thoughts on where the sector is.
I would like to start by sharing my thoughts on where the sector.
Speaker 2: We strongly believe that medical aesthetics market going forward will head in two directions. The first is a gradual and stark popularization of high-tier users who are less impacted by a weak macroeconomic environment and will continue to seek high-quality services.
We certainly believe that medical aesthetics market going forward well head into direction there.
The first is the gradual and stock popularization of high tea or use it well that's impacted by a weak macro environment and we'll continue to seek high quality services in there.
Speaker 2: In this scenario, low- to mid-tier users would increasingly gravitate towards products with the best quality-to-cost ratio. The second is a continuation of high-speed growth of light medical aesthetics as the market continues to expand in size.
No real low to mid tier users, but increasingly rapidly towards products with a basket quantity to cost ratio.
The second is a continuation of high speed growth of light medical aesthetics market continue to expand inside.
Speaker 2: We are adapting each of our business to be able to cater to both of the two scenarios.
We are adapting each of our business to be able to catch it with both of those two scenarios.
Speaker 3: First of all, we will focus on the development of high-end E-media services to meet the needs of high-end E-media users. In the third quarter, we are committed to strengthening cooperation with high-quality doctors and institutions, integrating internal resources, and innovating the service process to provide high-quality users with a one-stop overall solution and service experience.
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Speaker 3: to enhance the user experience in the field of E-media professionals.
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Speaker 3: to help doctors and institutions get rid of the price war and return to the nature of medical care and get a reasonable price.
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Speaker 3: In the third quarter, we jointly launched Uzi 1.0, which is a long-term face-enlarging product. Online orders of GMV have increased by 40%.
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Speaker 3: The total number of surgical orders online has increased by 11%.
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Speaker 3: In addition, through the operation of shared hospitals and the investment of EMEI mCN, we have a deeper understanding of the ecology of EMEI doctors. This will help Xinyang App transform to a high-end model and provide users with more high-quality EMEI doctors to reduce the threshold for consumer decision-making.
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Speaker 2: Taking this into account, we are adjusting our community part business with a focus towards high-end service and users.
Taking this into account we are adjusting our community pop business with a focus towards high end service and use it.
Speaker 2: During the quarter, we strengthened cooperation with a select number of well-respected doctors and institutions, further integrated internal resources and optimized processes, all in an effort to provide the highest quality service and experience through our one-stop solution.
During the quarter, we strengthened cooperation with select number of well respected doctors and institutions for the integrated internal resources and optimize the processes all in an effort to provide the highest quality service and experience through our one stop solution.
Speaker 2: Offering premium content and enhancing the user medical aesthetics service experience has helped well-respected doctors and institutions avoid costly price wars while still generating reasonable premium. During the quarter, we worked with well-respected doctors to promote the face contouring category.
Offering premium content and enhancing the use of medical aesthetic service computers has helped we're always talking to doctors and institutions avoid the coffee price wars, while still generating reasonable premium.
During the quarter, we walked it was well respected doctor to promote at their face contouring category.
Speaker 2: Online GME for the face contouring category grew by 40% year over year during the quarter, while GME for all surgical categories grew by 11% quarter over quarter.
Online gaming for the phase contrary category grew by 40% year over year during the quarter, while Jamie for all surgical categories grew about 11% quarter over quarter.
Speaker 2: Average transaction value for non-surgical products grew by 60% year-over-year, and GMB grew by 72% year-over-year.
Average transaction value for nonsurgical products grew by 60% UBS and Jamie grew by 72% year over year.
Speaker 2: In addition, by cooperating clinics with BuildCare and investing in medical aesthetics MCNs.
In addition, I coped grating Phoenix Wisdom, B O care any lasting mattress that it's M. C. N. We have obtained a deep understanding of the mechanics, which is helping us transform so we our app into a high end platform that offers the user a large selection of premium doctors to choose from and you.
Speaker 2: we have obtained a deep understanding of the mechanics which is helping us transform SoYoungApp into a high-end platform that offers users a large selection of premium factors to choose from and reducing the decision-making cost.
We do see the decision making process.
Speaker 3: Secondly, we will develop in a direction that meets the needs of people with high cost-effectiveness.
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Speaker 3: U-shark business is the innovation of the Qingyimei service model and an important step forward towards the standardization of offline Qingyimei service.
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Speaker 3: Since the launch in August last year, the scale of the business has not expanded steadily. In the third quarter, the number of users' sales and orders has increased by 23% compared to the previous year. Among them, the product of hypersonic anti-shake, which is represented by ultrasonic bubbles, has increased 44% compared to the previous year. As I mentioned in the last quarter's telephone conference,
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Speaker 3: With the expansion of the U-shark business scale, we pay more attention to ensuring that users have an online and offline consumer experience, improving the efficiency of existing network points, and optimizing business operations. In this quarter, more than 13% of the U-shark orders contributed to more than 100 network points cooperated with XinYang.
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Speaker 2: Suryan Prime is being a gesture to serve the group, looking for the best cost to ratio product. Suryan Prime is a unique innovation for the light metal aesthetics industry and a critical step to standardize offline services.
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Yeah, I'm Prime is a unique innovation for the light Madame aesthetics industry and a critical step to standardize standardize offline services since its launch in August of last year. The business has rapidly expanded and the scout wasteful feared August decreasing by 23% sequentially go into.
Speaker 2: Since its launch in August of last year, the business has rapidly expanded and scaled with fulfilled orders increasing by 23% sequentially during the quarter. Within fulfilled orders, high intensified focused ultrasound under the ultrasonic ATH category in particular increased by 44% sequentially.
Quarter, but being fulfilled orders high intensified focused ultrasound under the ultrasonic ath category.
In particular increased by 44% sequentially.
Speaker 2: As I mentioned in our last earnings call, at Soyang Prime Scales, our focus is on ensuring the best possible online-to-offline user experience, improving operational efficiency for our institutional network.
I mentioned in our last earnings call as Suey I'm Prime Scouse, our focus is on ensuring the back to possible online to offline use excuse me improve.
Improving operational efficiency for our institutional network.
Speaker 2: and refine operations. During the quarter, orders through Soyang Prime from the more than 100 institutions we worked with contributed over 13% of fulfilled orders in-house.
And refining operations during the quarter August was the OEM prime from the more than 100 institutions, we walked with country beauty, it's over 13% of our field August in house.
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Speaker 2: To further standardize the measurement system for light medical aesthetics institutions, we built a flagship clinic on the second floor of our head office to test our systems in real time. The team operating the clinic fully integrated with Soyoung Prime and has already seen monthly visits increased by more than six-fold over the past three months.
To further standardize the match them into system for like medical aesthetics institutions, we build a flagship clinic on the second floor, our head office to test our systems email in real time the team operating the clinics fully integrated with the OEM Prime and has already seen monthly visits increased by more.
Then six fold over the past three months equally as important the clinic has already achieved profitability.
Speaker 2: Equally as important, the clinic has already achieved profitability.
Speaker 3: Finally, our supply chain business can seize the opportunity to grow rapidly in the future in the Qingyi US market, and this part of the business has also achieved significant growth in the third quarter.
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Speaker 3: Xinyang's supply chain business is a new attempt to expand to an industrial chain upstream after many years of exploration and deep insight into the industry. In the upstream light and power equipment field, we have further customized and developed a new generation of ultrasonic anti-shrinkage equipment, ultrasonic shields, on the basis of magnetic laser.
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Speaker 3: and use this product as the basis to improve our DTC model. In the upstream real estate field, we have achieved high-speed growth in performance through the Arasti team. We expect that the total annual shipment volume will reach the target level by next year.
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Speaker 3: In July this year, we signed a deep strategic partnership with Xinhong Pharmaceuticals, a new star in the US pharmaceutical industry, to obtain exclusive contracts for two products.
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Speaker 3: and provides a rich picture of qingyingmei in the range that is renewable.
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Speaker 2: Lastly, our supply chain business is being positioned to capture opportunities if the light medical aesthetics market continues expanding rapidly.
Lastly, our supply chain business is be positioned to capture opportunities if the light medical aesthetics market continue expanding rapidly.
Speaker 2: This is best encapsulated with the standout performance it had during the quarter and the remarkable growth it has generated.
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Capsulate it awaits the standout performance it had during the quarter and is remarkable growth it has generated.
Speaker 2: The supply chain business is a result of our initiative to implore opportunities and acquire deep industry insights that would allow us to expand upstream along the medical aesthetics supply chain. Looking at the upstream medical lasers product category, following the acquisition of Wuhan Miracle, we built a new generation of ultrasonic ATMG equipment called the Micro Focus.
Supply chain business is a result alcoholic nation due to import opportunities and acquire deep industry insights that would allow us to expand upstream along the matamoros that if supply chain looking at the upstream medical lasers product category. Following the acquisition of a miracle we'd be.
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Speaker 2: a micro-focused ultrasound device, which we are using to build out our direct-to-consumer business model.
Micro focus.
Ultrasound device, which we are using to build out our direct to consumer business model.
On the medical injection part, we established as a team.
Teams really elastic and achieved a rapid growth in performance.
Speaker 2: Full year shipments are expected to be seven times that of last year.
Full year shipments are expected to be seven times that of last year.
Speaker 2: In July , we also signed a strategic cooperation agreement with Xihong by Pharma for the exclusive distribution rights of two Philips products.
Your line, we also signed a strategic Corporation agreement with Chi home My pharma for the exclusive distribution rights up to fill a product called.
Speaker 2: cooperation agreement, such as these, filled gaps and greatly enhanced our light metal aesthetics product portfolio.
Cooperation agreements such as such.
Such as these fill gaps and greatly enhanced our light medical aesthetics product portfolio.
Speaker 3: is different from the single-use R&D, production, and sales model of other traditional commercial companies.
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Speaker 3: We will make full use of our reputation and brand advantage in the C-end user group and the ability to cover the network of B-end institutions to quickly establish a market for new products.
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Speaker 2: Distinct from the traditional upstream R&D production supply chain model used by manufacturers, we are able to add further value by developing synergies with our existing business and fully leverage our institutional network and expansive consumer reach.
This thing with the problems of traditional upstream R&D production and supply chain model used by manufacturers, we are able to add further value by developing synergies with our existing business and to fully leverage our institutional network and expansive consumer reach.
Speaker 2: This allows us to quickly bring new products to market and rapidly make them competitive.
This allow us to quickly bring new products to market.
And it rapidly make them compacting uncompetitive.
Speaker 3: As you can see, the supply chain sector, including the supply chain sector in Wuhan, has a revenue of about RMB75 million in the third quarter, which is 19% higher than the total revenue contribution, which accounts for 20% of the total revenue contribution. And we only started to produce real-time products last year.
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Speaker 3: First of all, we try to operate in the competitive category of hyaluronic acid. At present, this business income is constantly rising, and in August and September , we continue to achieve monthly profit. This is a good proof that a belief platform and high-quality products can produce good coordination.
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Speaker 2: In the third quarter, revenue from our supply chain business, which includes Wuhan Miracle, reached RMB75 million, an increase of 19% year-to-year and accounting for 20% of total revenue.
In the third quarter revenue from our supply chain business, which includes the behind Miracle reached RMB 75 million, a increase of 19% year over year and accounting for 20% of total revenue.
Speaker 2: We entered the injectable filler market just last year with a product designed for the highly compactive hyaluronic acid serum. Remy for this serum keeps hitting new heights and has already become profitable on a single month basis in August and September .
We entered as an injectable filler market at just the last year with a product designed for the highly competitive hydronic AC serum.
Revenue for this year keeps hitting new heights, and it has already become profitable on a single mountain spaces in August and September.
Speaker 2: This success directly reflects the enormous synergies we are able to create between the Soyang platform and high-quality upstream products.
This success directly reflects the anomaly synergies, we're able to create between the Sui on platform and high quality upstream products.
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Speaker 3: A wide range of markets to be discovered in non-first-tier cities The population penetration rate Improving is still the core driving factor for the growth of the industry
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Speaker 3: And as the industry continues to be standardized, the competitive advantage of XinYang, which has the ability to integrate innovation, will become more and more obvious. We will focus on the above three major business directions. Complete integration of institutions, doctors, and products, these three major industrial elements. Deep integration, continuous exploration of diversified income to improve performance, create long-term value for shareholders.
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Speaker 2: Over the long term, the medical status industry in China still has plenty of room to grow with user penetration rates that are still very low. Markets beyond the first-tier cities remain largely adapted. As standardization spreads across the industry, our fully integrated capabilities and other competitive advantages will become more pronounced.
Over the long term the medical aesthetics industry in China still has plenty of room to grow with us their penetration rates are still very low market beyond the first T. S unions remain largely untapped it standardization spread across the industry, our fully integrated capabilities and other comps.
It is a competitive advantage, where it became more pronounced.
Speaker 2: Our focus will remain on our three core business segments, where we will work to further integrate institutions, doctors, and products in order to create sustainable, diversified revenue streams and create long-term value for our shareholders.
Our focus will remain our straight core business segment, where we will work to further integrate institution doctors and programs.
Order to create sustainable you might divide the revenue streams and create long term value for our shareholders.
Yeah.
Speaker 2: I will now turn the call over to our CFO , Nick, to review the financial results for the third quarter before taking questions.
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Speaker 4: Okay. Hello, this is Nick. I will now go through our financial performances this quarter.
Hello. This is snake oven now go through our financial performance this quarter. Please.
Speaker 4: Please be reminded that all amounts quoted here will be in RMB. Please also refer to our earnings release for detailed information of our comparative financial performances on a year-over-year basis.
Please be reminded that all amounts quoted here will be RMB. Please also refer to our earnings release for detailed information of our comparative financial performances.
Year over year basis.
Speaker 4: Total revenues during the quarter will RMB 385.3 million, up 19.2% of the year, and in line with our guidance.
Total revenues during the quarter were RMB $385 3 million up 19, 2%.
A year and in line with our guidance.
Speaker 4: The increase was primarily due to an increase in revenues generated by Soyoung Prime and the sales of medical products.
The increase was primarily due to an increase in revenues generated by Sylvia on prime and the sale of some medical products.
Speaker 4: Information services and other revenues will RMB 285.9 million of 24.1% year-over-year, primarily due to an increase in revenues generated by Soyoung Prime.
Information services and other revenues were RMB $285 9 million up 24, 1% year over year, primarily due to an increase in revenues generated by so you're implying.
Speaker 4: reservation services revenues decreased by 18.8% over a year to RMB 24.1 million, primarily due to our operating strategy, which gives higher subsidies to end users.
Reservation services revenues decreased by 18, 8% year over year to RMB 24, 1 million, primarily due to our operating strategy, which gives higher subsidies to end users.
Speaker 4: Revenue from sales of medical products and maintenance services were RMB75.2 million, up 19.2% year-over-year, primarily due to an increase in sales of cosmetic injectables.
Revenue from sales of medical products and to maintain their services well RMB $75 2 million up 19, 2% year over year, primarily due to an increase in sales of cosmetic injectables.
Speaker 4: Cost of revenues for RMB 142.6 million, up 51.7% year-over-year. The increase was primarily due to an increase in costs associated with Soyang Prime.
Cost of revenues were RMB $142 6 million up 51, 7% year over year. The increase was primarily due to an increase in costs associated with Sylvia on prime.
Speaker 4: within cost of revenues, cost of services and others for RMB 103.5 million.
Within cost of revenues cost of services and others were RMB $103 5 million.
Speaker 4: up 74.2% year-over-year, primarily due to an increase in costs associated with the Soya Prime. Cost of medical products sold and maintenance services, or RMB 39.1 million, up 13% year-over-year, primarily due to an increase in costs associated with the sales of cosmetic injectables.
74, 2% year over year, primarily due to an increase in costs associated with the city on prime cost of medical products. So in our maintenance services were RMB $339 1 million up 13% year over year, primarily due to an increase.
And costs associated with the sales of cosmetic injectables.
Speaker 4: Total operating expenses for RMB244.7 million, up 3.4% year-to-date.
Total operating expenses were RMB, $244 7 million upstream, 0.4% year over year.
Speaker 4: Sales and marketing expenses for RMB 143.8 million up 15.3% year-over-year, primarily due to an increase in expenses associated with branding and user acquisition activities.
Sales and marketing expenses were RMB $143 8 million.
Up 15, 3% year over year, primarily due to an increase in expenses associated with branding and the user acquisition activities.
Speaker 4: G&A expenses were RMB50.2 million, down 16% over a year. The change was primarily due to the reversal of share-based compensation expenses, partially offset by an increase in payroll costs associated with the expansion of administrative employees to support our business upgrade and new strategic business.
G&A expenses were RMB, $50 2 million down 16% year over year. The change was primarily due to the reversal of share based compensation expenses, partially offset by an increase in payroll costs associated with the expansion of administrative employees to support.
Our business upgrades and the new strategic businesses.
Speaker 4: R&D expenses for R&B 50.6 million, down 2.7% year-over-year, primarily due to improvements in staff efficiency.
R&D expenses were RMB 56 million down two 7% year over year, primarily due to improvements in staff efficiency.
Speaker 4: Income tax benefits were RMB 2.2 million compared with income tax benefits of RMB 16.5 million in the third quarter of 2022.
Income tax benefits were RMB, two 2 million compared with income tax benefits of RMB 16, 5 million in the third quarter of 2022.
Speaker 4: Net income attributable to SoYoung was RMB 18.3 million compared with a net income of RMB 2.3 million during the same period last year. non-GAAP net income attributable to SoYoung was RMB 9.5 million compared with RMB 9.9 million non-GAAP net income attributable to SoYoung in the same period of 2022.
Net income attributable to so young was RMB $18 3 million compared with a net income of RMB $2 3 million during the same period last year.
non-GAAP net income attributable to so young was RMB nine 5 million compared with RMB nine 9 million non-GAAP net income attributable to so yeah in the same period of 2022.
Speaker 4: basic and diluted earnings per ADS attributable to ordinary shareholders were RMB 0.18 and 0.18 respectively compared with basic and diluted earnings per ADS attributable to ordinary shareholders of RMB 0.02 and 0.02 respectively during the same period of 2022.
Basic and diluted earnings per ads attributable to ordinary shareholders were RMB <unk>.
One eight and is there a point in about eight respectively, compared with basic and diluted earnings per ads attributable to ordinary shareholders of RMB 0.02, and 0.02, respectively. During the same period of 2022.
Speaker 4: We have ample cash on hand, with total cash and cash equivalents, restricted cash, term
We have ample cash to all hands with a total cash and cash you pay evidence restricted cash time deposits and short term investments of RMB, One 4 billion as of September 32023, compared with RMB, One 6 billion.
Speaker 4: and short-term investment of RMB1.4 billion as of September 30, 2023, compared with RMB1.6 billion as of December 31, 2022.
At December 31st 2022, the decrease was primarily due to investments in building up our supply chain product pipelines of RMB 38 million and share repurchases of approximately RMB 121 million.
Speaker 4: The decrease was primarily due to investments in building our supply chain product pipelines of RMB 38 million and share repurchases of approximately RMB 121 million.
Speaker 4: For the fourth quarter of 2023, we expect total revenues to be between RMB 380 million and RMB 400 million.
For the fourth quarter of 'twenty to 'twenty three we expect total revenues to be between RMB 380 million and RMB 400 million.
Speaker 4: The above outlook is based on our current market conditions that reflect the company's preliminary estimates of market and operating conditions and the consumer demand.
Our outlook is based on our current market conditions that reflects the companys free minutes preliminary estimates of market and operating conditions and consumer demand.
Speaker 4: This concludes our key remarks. I will now turn the call to the operator and open the call for Q&A.
This concludes our Q remarks, I will now turn the call to the operator and open the call for Q&A.
Thank you. Thank you.
Speaker 1: If you would like to ask a question, please press star then 1 on your telephone keypad. If your question has been addressed and you would like to remove yourself from queue, please press star then 2. We do ask that you pick up your handset before pressing the keys. Once again, ladies and gentlemen, that's star then 1 if you have a question.
If you would like to ask a question. Please press Star then one on your telephone keypad.
If your question has been addressed and he would like to remove yourself from queue. Please press Star then two we do ask do you pick up your handset before pressing the keys.
Once again, ladies and gentlemen that started in the water. If you have a question.
Speaker 1: And today's first question comes from Thomas Chung at Jefferies. Please go ahead.
And today's first question comes from Thomas Chong of Jefferies. Please go ahead.
Yes.
Okay.
Hello, Paula side your line is open.
Speaker 5: Hi, good evening. Thanks, management, for taking my questions. Can you share about the progress so long point made and expectation for Q4 and 2024? And my next question is about our estimate for market expenses in Q4 and next year. Thank you.
Hi, good evening.
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Our estimate for market day benefit in Q4 and next year. Thank you.
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Speaker 3: In the third quarter, Xinyang Youxiang's business operation is just one year full. We see that the number of users who cancel the order is 11 times that of the same period a year ago. The user scale is expanding rapidly. This also fully proves that Youxiang's service has won the favor of many consumers.
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Speaker 3: In the third quarter, the number of users who use the super-booster as a representative of the super-booster antifreeze products increased by 44% and formed a stronger reputation advantage.
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Speaker 2: Thank you for your questions. I will take the first one. We launched Suiyuan Prime just over a year ago. Since then, fulfilled orders have grown by tenfold during the quarter when compared to last year. As our user base expands rapidly, which I believe demonstrates the transaction, its services are gaining among consumers.
I. Thank you for your questions I will take the first one we launch them.
I'm just over a year ago, she's been fulfilled orders have grown by 10 fold during the quarter when compared to M. P.
Last year as our user base expands rapidly, which I believe demonstrate that transaction services and gain among consumers redeem fulfilled orders high intensify focused ultrasound.
Speaker 2: Within fulfilled orders, high intensified focused ultrasound under the ultrasonic ADH category, in particular, increased by 44% sequentially, generating strong word of mouth.
<unk> underground ultrasonic 80 age category in particular increased by 44% of sequentially generated a strong word of mouth.
Speaker 3: As I mentioned, we have set up a sample store in our office building on the second floor. We have set up a clinic management team, and we are collaborating with Youxiang. We are constantly exploring the standardized management system of Qingyi Meizhizhou to polish the business model of Youxiang.
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Speaker 2: As I mentioned during my prepared remarks, we built a model clinic for high, we call it a flagship school for high, for light metastatic procedures on the second floor of our office. The team operating the clinic are fully integrated with Soyang Prime and are driving the development of a standardized measurement system for light metastatic institutions and further improving the overall business model.
As I mentioned it during my prepared remarks that we build our model panic for high we call. It is our flagship school for high power like Mad If I said its procedures on the second floor of our.
And the team operating the clinic or 40 integrated with the OEM Prime and driving the department of a standardized measurement system for 19 out of a set of institutions and further improving and improving the overall business model.
Speaker 3: Next, we will continue to expand the influential user group and continue to improve our service experience. Catch the huge wave of Qingyi Meibaofa and create high-priced Qingyi Meibaofa services for users. At the same time, increase the scope of product cooperation with institutions and implement a standardized management system to become a full-fledged partner of a large number of small and medium-sized Qingyi Meibaofa institutions.
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Speaker 2: We will continue to be Soyum Prime's user base.
We will continue.
On prime user base.
Speaker 2: to improve the service experience, capture emerging opportunities within the light medical service asset industries, and create products and services with high quality to cost ratio.
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Speaker 2: We will also expand the number of categories with cooperation with institutions and implement a standardized measurement system to strengthen our position as an all-around partner for small and mid-sized live medical settings institutions.
It will also expand the number of categories, we preparation with institutions and an independent eye standardized measurement of system to strengthen our position as an all around timing for small and mid size like medical aesthetic institutions.
Speaker 3: At the same time, the supply chain business can be well combined with the e-commerce business in the future. The products of the supply chain end can land directly in the e-commerce channels. Q4, we launched a new generation of ultrasonic anti-shrinkage equipment, ultrasonic shield, which is custom-developed. The clinical performance is good. In the future, e-commerce will gradually increase new large-scale single-product products, thereby improving the profitability of e-commerce business, and play a huge co-operative effect with the supply chain business.
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Speaker 2: We plan on integrating SoYang Prime with our supply chain business in the future. Products from the supply chain business can be directly through SoYang Prime. MicroFoxt Autosound device, the new generation of ultrasonic AT engine equipment, we launched in the fourth quarter, has performed well in clinical applications.
We plan on integrating yeah, so we I'm prime with our supply chain business in the future product from the supply chain business can be directly source OEM Prime Microfocus got also some device the new generation of ultrasonic 18 agreement we launched in the first quarter has performed the way our <unk>.
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Speaker 2: Going forward, Soyang Prime will gradually introduce new products, further improve margins, and create synergies with our supply chain business.
Going forward, so young prime will gradually introducing new products further improve margins and create synergies with our supply chain business.
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Speaker 4: I will respond to the question regarding the marketing expense. We have placed an emphasis on improving advertising efficiency this year. Commercial rate for user placing an order online improved in the third quarter, mainly due to our community content, strong brand image, and new user acquisition methods, such as a private domain operation.
I'll respond to the question.
Question regarding the marketing expense.
Have placed access improving advertising efficiency this year.
Most of them right for use of placing an order online improved in the third quarter, mainly due to our community content strong brand image and new user acquisition methods, such as a private domain operating operations.
Speaker 4: Looking ahead to Q4 and 2024, we will continue to leverage our community content, strong brand, and other competitive advantages to further improve the user experience to increase user conversion rates.
Looking ahead to Q4 in 'twenty 'twenty four we will continue to leverage our community content strong brand.
And the comparative competitive advantages to further improve the user experience to increase user conversion rates.
Speaker 4: Lastly, we will also continue deploying a highly efficient marketing strategy, expand user acquisition channels, improve marketing ROI, and carefully manage marketing costs to maintain our margin and improve the profitability of the company.
Lastly, we will also continue deploying a highly efficient marketing strategy expand the user acquisition channels improve marketing all I and carefully manage marketing cost to maintain our margin and improve the profitability of the company.
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Speaker 1: Thank you. And our next question comes from Nelson Chen with Citi. Please go ahead.
Thank you and our next question comes from Nelson Cheung with Citi. Please go ahead.
Speaker 3: Thank you for accepting my question. My question is about the environment of a more prosperous market. I would like to ask you how you see this year's quarter, especially the performance of the entire US market in this period, and our outlook on the US market in 2024.
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Is that Oh, sounion that U can English anytime that you get that London, So I would translate myself in English. So thanks management for taking my questions. So how would management expect the medical aesthetic market to develop in fourth quarter, especially during our December 11th period and also into the next year 2024.
Speaker 6: So I will translate myself in English. So thanks management for taking my questions. So how would management expect the medical effective markets to develop in fourth quarter, especially during the double 11 period and also into the next year, 2024? Thank you.
Thank you.
Speaker 3: Thank you for your question. As I mentioned in the previous speech, I think the US-China market will develop in two directions in the future. First, the US-China market will gradually show a clear two-stage distribution trend. The consumer ability of high-end users is limited by the macroeconomic environment and will still pursue high-quality US-China services. And the low-end US-China consumer group will be affected by the macroeconomic market and will be affected by the macroeconomic market.
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Speaker 3: Second, there is still a lot of room for growth in the Qingyingmei market, and the market size will continue to grow. Based on the above two judgments, we have also made corresponding changes in the business direction.
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Thank you for asking me, India first as I mentioned in prepared remarks, I believe the matter of a static market going forward. We have had in two directions. The first is gradual and stock of population.
Speaker 2: Thank you for asking me. And first, as I mentioned in prepared remarks, I believe the macro-asset market going forward will head in two directions. The first is gradual and stark popularization of high-tier users who are less impacted by the weak macro-environment and will continue to seek high-quality services.
Of high tier users, who are not impacted by the weak macro environment and we'll continue to seek high quality service.
Speaker 2: In this scenario, low to mid-user will increasingly gravitate towards products with the best quality-to-cost ratio. The second is a continuation of high-speed growth of light medical aesthetics and the market continues to expand in size. We are adapting each of our business to be able to cater to both of these scenarios.
In this scenario low to maybe use oh, well, increasing gradually gravitated towards pre tax break them back to quality to cost ratio. The second is a continuation of high speed growth of like medical aesthetics, and medical and the market continues to expand inside we adapt.
Each of our business to be able to content to both of these scenarios.
Speaker 3: We will focus on three major areas of development on the basis of the Hang Shi professional medical platform. First, the change in the direction of the POP business.
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Speaker 3: First, we strive to meet the needs of high-end users and realize the transformation to a high-quality E-media Internet platform. Second, we want to meet the needs of high-performance users and continue to explore the standardized management system of E-media institutions to provide users with a high-performance service experience. Third, the supply chain business can help us grasp the future high-growth E-media market share and play a co-operative effect between different business blocks.
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Speaker 2: Based on the output prediction, we will focus on our three business segments to create a consolidated professional medical aesthetics platform for all consumers. First, we are adjusting our community e-commerce business with a focus towards high-end services and user-seeking high-quality online medical aesthetics services.
And based on the our petition we will focus on our three business segments to create solid data the professional medical aesthetics purple all consumers are trying to we are adjusting our community commerce business with a focus towards high end services and the use of seeking high quality online now.
But that if services second story on Prime ESB adjust to serve Europe works look for the best quality cost ratio products as we continue to explore standardized measurement system for like medical aesthetics.
Speaker 2: Second, Soya Prime is being adjusted to serve user groups looking for the best quality cost ratio products as we continue to explore standardized management systems for light medical settings.
Speaker 2: Third, our supply chain business is being positioned to incrementally capture a larger share of the light metal prosthetics market as it continues to expand rapidly and to create synergies with other business segments.
Third our supply chain business is being positioned to increase incrementally capture a larger share of the lifeblood of aesthetics market as it continues to expand rapidly and to create synergies with other business segments.
Speaker 3: The National Bureau of Statistics released the consumer data for October two days ago. From October 1 to October 10, the total number of consumer goods retailed increased by 6.9%, and the total number of consumer goods retailed increased by 7.6% in October . Consumer consumption has shown a continuous decline.
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Speaker 3: As the economy continues to recover and we steadily advance our industrialized transition strategy, we are optimistic about the 2024 and future US consumer market. At this stage, we may face a period of financial fluctuation, but our investment in users and institutions has not changed our original intention to create value for the industry, and we are confident in the future results.
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Speaker 2: In addition, according to consumption data published by the National Bureau of Statistics, total retail sales of consumer goods during the first 10 months increased by 69% year-over-year and 76% year-over-year in October , indicating that the economy is gradually gaining recovery momentum.
In addition to.
Fuel consumption data published by the National Bureau.
<unk> total retail sales of consumer.
Consumer goods.
The amount increased by 69%.
Yeah, and the 76% year over year and October indicating that the economy is gradually gain recovery momentum.
Speaker 2: In summary, we remain confident with the growth perspective in the medical status market has for 2024 and further into the future.
In summary, we remain confident at least a relative perspective.
Medical aesthetics market has for 'twenty 'twenty, four and further into the future.
Speaker 2: Even though our business is occasionally impacted by volatile markets, it remains resilient. We will continue investing in acquiring high-quality users and institutions to create value for the industry and are confident in our long-term growth perspective.
Even though our business is occasionally impact goodbye, while in tile market. If it were mainly seen it we will continue investing in acquiring high quality users and institutions to create value for the industry and are confident in our long term growth perspective.
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Thank you.
Speaker 7: Thank you, and our next question today comes from Chloe Wei at CICC. Please go ahead.
Thank you and our next question today comes from quote anyway, let's see I see see please go ahead.
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Speaker 1: I'm sorry, we're not able to hear your audio at this time, so we'll move to the next question, which is from Gigi Ren with CITIC. Please go ahead.
I'm, sorry, we don't really want to hear your audio firms, who will move to the next question is from G. G C.
C I T. I C. Please go ahead.
Okay.
Speaker 8: How do you expect margins to trend next quarter and going forward?
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From the sales team has improved for two consecutive quarters of.
How do you expand margins to trend next quarter and going forward. Thank you.
Yeah.
Speaker 4: Thank you for your question. With a soft consumer sentiment, we will focus on driving revenue growth with gradual diversification of revenue streams. Our supply chain business and So Young Prime is showing a solid performance each quarter and reflects this focus.
Thank you for question a bit softer consumer sentiment will be a forecast.
Driving revenue growth with Oh gradual diversification of revenue streams.
Our supply chain business and so young prime is.
Is showing solid performance each quarter and reflects this forecast.
Speaker 4: The improvement in our profitability for the past two consecutive quarters reflects the improvement we have made in operating efficiency. We will continue to execute this strategy and remain confident that we will be able to maintain profitability next quarter.
The improvement in our profitability for the past two consecutive quarters reflect the improvements we have made in operating efficiency. We will continue to execute this strategy and remain confident that we'll be able to maintain profitability next quarter.
Speaker 4: 2023 is a critical year for our business transformation. We have made steady progress in laying a solid foundation for future growth and creating long-term sustainable value for our shareholders.
23 is a critical year for our business transformation, we have made steady progress in laying a solid foundation for future growth and creating long term sustainable value for our shareholders looking forward to 2024 will be will continue to grow revenue improve.
Speaker 4: Looking forward to 2024, we will continue to grow revenue, improve operating efficiency, and carefully manage costs. We will be well-positioned to increase our competitiveness and maintain healthy cash flows as we leverage opportunities to generate returns for our shareholders. Thank you.
Operating efficiency and to carefully manage costs, we will be well positioned to increase our competitiveness and to maintain healthy cash flows.
The average opportunities to generate returns for our shareholders. Thank you.
Thank you.
Yeah.
Speaker 1: Thank you. And our next question comes from Chloe Wei with CICC. Please go ahead.
Thank you and our next question comes from Clos anyway, we'll see ICC. Please go ahead.
Speaker 9: I have a question for Mr. Jin, we have observed that the competition in the English-American market, including advertising, is also quite intense, so we would like to know what Mr. Jin thinks about the future of the English-American industry, and what do you think about Xinyao's position in the long-term market competition?
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Speaker 9: So I will translate myself. Mr. Xinjin, what do you think of the future competitive landscape and given the thoughts, how do we position ourselves in the long run? Thank you.
I really I will translate myself.
Searching gene what do you think of the future competitive landscape and given their thoughts on how do we position ourselves in the long run. Thank you.
Yeah.
Speaker 3: Thank you for your question. In the US market, we have been exploring and discovering new business models, breaking away from traditional Internet thinking, opening up new ways of thinking, exploring the development of the US industry, and exploring the value of the industry.
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Speaker 2: Thank you for your question. We have been exploring new business models across different verticals within industry that are outside the traditional Internet business models. We are trying to find new ways to think about industry development and exploring value creation.
To give a question are we have been exploring new business models across different verticals within industries that are outside the traditional internet investments models. We are trying to find new ways to think about industry department and exploring value creation.
Speaker 3: First of all, in the middle of the industry, which is the Internet, we see that mainstream short video platforms are trying to enter the US market from Q3.
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Speaker 3: We believe that short video platforms and integrated e-commerce platforms should adopt a low-cost group purchase business model that fits their platform characteristics. Based on our judgment of the future two-level market diversification trend, we will adopt an operational strategy that is differentiated from the competition to meet the needs of high-end US users and provide a better consumer experience, which is also conducive to improving the profit space of the business.
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Speaker 2: First, looking midway upstream, we are seeing that major short video platforms tap into medical aesthetics in the third quarter. We believe these platforms, as well as the major e-commerce platforms, are mainly applying a low-price growth purchase model, which fits their operation models. Based on our expectation of industry popularization,
First unlocking the way upstream we have seen that in major shelf video platform tap into Matamoros ethics in the third quarter. We believe these platforms as well as the major E Commerce platform Amaney applying a low priced core purchase model, which fits their operation models based on our expectation.
Our industry and capitalization.
Speaker 2: future, we are adopting a different operating strategy with our pop business to focus on the demand of high-end users by providing them a better consumption experience, which will also improve our market.
The future we are adopting a different operating.
Strategy with our pump business to focus on what amount of heightened users by providing them a better consumption experience, which will also improve our margins.
Speaker 3: For the downstream market, with the development of Qingyi Meimei and the pursuit of cost-effectiveness for a large number of users, we believe that the Qingyi Meimei chain will have a huge market growth space in the future, but there are no competitive chain organizations in China. At present, there are only two brands with more than 20 stores in the Qingyi Meimei chain.
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Speaker 3: The overall standardization and operating profit level have not yet reached a good level. We see that there is already a very successful model abroad, which provides a high-quality EMEI consumer experience for mid- and low-end users. Therefore, we will explore the EMEI standardization management system through the operation of EMEI business, and create high-value EMEI services for users, and become a comprehensive partner of a large number of small and medium-sized EMEI institutions.
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Speaker 2: Downstream, at the institutional end of the spectrum, users are increasingly seeking products with a high quality-to-cost ratio, which our operations will be able to cater to as space grows.
Downstream institutional and health care.
It's backed him users are increasingly seeking products with a high quality to cost ratio, which our operations, we will be able to content to add this space grows we believe that chain stores of life medical.
Speaker 2: We believe the chain stores of light medical aesthetics will have a huge market growth space in the future. Domestic competitors in the vertical are few and far between, with only two brands going over 20 chain stores with limited standardized products and low margin.
Fedex will have a huge market growth space in the future domestic competitors in their vertical are few and far between with only two brands growing over 20 chain stores with limited of standardized products and the low margin.
Speaker 2: They are successful models already deployed outside China, which provides a premier consumption experience for low to mid-tier users.
They are successful models already did that deployed outside China, which provides a premier consumption experience for low to mid tier users.
Speaker 2: We are working on deploying a standardized measurement system for light metabasitics institutions through Soyum Prime with high quality-to-cost product ratios for our users.
We are working on deploying our standardized management system for life matter of a Fedex infusion sure sodium prime with high quality to cost product ratios for our users.
Disposition.
Speaker 2: as an all-around partner for a large number of small and mid-sized biomedical aesthetics institutions.
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Speaker 3: For the upstream supply-end market, we can see that the market competition for the real-use products is fierce. However, there is still a lot of market potential in the lighting industry, especially in the super-sound and anti-shake products. So we also launched a customized lighting device in Q4, the super-sound shield. In the real-use product market, we can see that there is a huge room for growth in the regenerative market driven by new materials. We have also strengthened the layout of the product.
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Speaker 2: Upstream competition is getting fierce in the injections category, but enormous market potential remains intact for medical lasers, particularly in the ultrasonic AT engine category. Based on our observation, we customized and launched an ultrasonic AT engine product called the MicroFox Ultrasound device.
Upstream competition is getting the.
The injections category, but a number.
The potential tax for our medical lasers, particularly.
Ultrasonic 800 category based on our observation because Mike on the launch of the ultrasonic 18 agent product cognizant, Microsoft the ultrasound device during the first quarter for injections, we see enormous growth potential in that we generate if market driven by new materials.
Speaker 2: during the fourth quarter. For injections, we see enormous growth potential in the regenerative market driven by new materials and have expanded our offering in the category.
And have expanded our offering in the cakes.
Speaker 3: In short, we will not only pay attention to the development of the Internet business model, but also further explore the potential growth of the upstream and downstream markets, and pay attention to the long-term development of the industry. We believe that Xinyang's ability to upstream and downstream and integrate innovation will lay a solid foundation for its competitive advantage in the future. Today's investment will certainly achieve tomorrow's brilliance.
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Speaker 2: In summary, in addition to developing the Internet business model, we are also employing growth potential along the industry supply chain with a focus on the long term. We are confident that our superior positioning in the market and our competitive advantage will yield a solid result going forward, driven by our integration and innovation along the industry value chain. Thank you.
In summary in addition to developing that into now the business model. We also incur in growth potential along the industry's supply chain with a focus on the long term, we are confident that our superior positioning in our market and our competitive advantage.
Yes.
South Dakota.
Driven by our integration and innovation along the industry value chain. Thank you and thank you for asking.
Speaker 1: Thank you. And ladies and gentlemen, we are approaching the end of today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.
Thank you ladies and gentlemen, we are approaching the end of today's conference call. We thank you all for attending today's presentation.
You may now disconnect your lines and have a wonderful day.
Speaker 10: What.
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Speaker 10: you
Yes.
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