Q1 2024 So-Young International Inc Earnings Call
Operator: Ladies and gentlemen, thank you for standing by for So-Young's first quarter 2024 earnings conference call. At this time, all participants are in listen-only mode.
Ladies and gentlemen, thank you for standing by for so Young's first quarter 'twenty 'twenty four earnings conference call.
At this time, all participants are in listen only mode.
Operator: After management gives their prepared remarks, there will be an opportunity for questions and answers. As a reminder, today's conference is being recorded. I would now like to turn the conference over to your host for today's call, Ms. Mona Chiao. Please go ahead, Ms. Chiao.
After management give their prepared remarks, there'll be an opportunity for questions and answers.
As a reminder, today's conference is being recorded.
I would now like to turn the conference over to your host for today's call Mismo Nutshell. Please go ahead ma'am.
Mona Chiao: Thank you, operator, and thank you, everyone, for joining So-Young's first quarter 2024 audience conference call. Joining me today on the call is Mr. Xing Jin, our co-founder, chairman, and CEO, and Mr. Nick Zhang, CFO.
Mismo Nutshell: Thank you operator, and thank you everyone for joining us so yes first quarter 'twenty 'twenty earnings Conference call. Joining me today on the call is Mr. Seizing our co founder chairman and CEO and Mr. Nick Jonas That's Oh, please know that stay discussion today will contain forward looking statements made under the safe.
Mona Chiao: Please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the U.S. private securities and the Litigation Reform Act of 1995. Forward-looking statements are subject to risks and alternatives that may cause actual results to differ materially from our current expectations. Potential risks and alternatives include, but are not limited to, those outlined in our public filings with the SEC, including our annual report on Form 20-F. So-Young does not undertake any obligation to update any forward-looking statements, except as required under applicable law. At this time, I'd like to turn the call over to Mr. Xing Jin.
Speaker Change: Hey, there Politians leap you asked why rate Securities and litigation Reform Act of 1995 forward looking statements are subject to risks and alternatives that may cause actual results to differ materially from other carbons expectation potential risks and also noticed includes but are not limited to those outlined in our public.
Fundings to me, that's the states, including our annual report on form 20-F, So young does not undertake any obligation to update any forward looking statement, except as required under applicable law at this time I'd.
Speaker Change: I'd like to turn the call over to Mr. Xing Jin.
Xing Jin: Hello, everyone. Welcome to today's telephone conference.
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Xing Jin: In the first quarter of this year, our business performed well and achieved a total income of 3.18 billion yuan. , For the first time in five years, we achieved profit under the NAGEP standard in the first quarter. , 23.3%,
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Xing Jin: Hello everyone, thank you for joining the call today.
Speaker Change: Hello, everyone and thank you for joining the call today, our business performed well in the first quarter with total revenues, reaching RMB 318.3 million exceeding the upper end of our guidance at the same time. This marks the first time in five years, that's what we achieved non-GAAP profitability in the first quarter.
Xing Jin: Our business performed well in the first quarter, with total revenues reaching RMB 318.3 million, exceeding the upper end of our guidance. At the same time, this marks the first time in five years that we achieved non-gap profitability in the fourth quarter. Our new businesses continue to grow rapidly, with revenue from self-sold medical products and maternity services increasing 23.3% year-over-year. Our pipeline of upstream products continues to further diversify its offerings, while So-Young plans to maintain a healthy development.
Speaker Change: Business is continuing to grow rapidly with revenue from the medical products and maternity services increased 23, 3% year over year, our pipeline of upstream products content continues to further diversify its offerings well sorry, I'm from machine Health Department.
Xing Jin: We continue to promote the opening process of chain stores. We have newly opened and invested in three institutions in the first quarter.
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Xing Jin: The unit's performance is well ahead of the industry's average level, and the price advantage is obvious. In the first quarter, 77% of the total number of people serving in faith-based organizations increased. XinYang is steadily advancing the comprehensive development from product to institution to help the industry gradually rebuild its pricing system and value distribution. [inaudible] In terms of products, institutions, and platforms, with the steady progress of our new business strategy, we are full of confidence in the growth of the future.
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Xing Jin: We have made significant progress in the expansion of our chain of clinics. In the first quarter, we opened operations at three clinics, all of which boast unit area efficiencies well above industry average at a notable price advantage. In the first quarter, the cumulative clients served by our clinics increased 77% quarter over quarter. We have also made steady progress with vertical integration from products to institutions, driving the restructuring of the pricing system and value allocation in the industry.
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Speaker Change: Increased 17, 7% quarter over quarter and they've also made US. We've also made steady had weight of vertical integration from products to institutions, driving construction, oh pricing system and value allocation and industry. They smell provides consumers with medical as that's cool services, that's a more.
Xing Jin: This will provide consumers with medical aesthetic services that are more cost efficient and help with the sustainable development of medical aesthetic practitioners. In terms of products, institutions, and the So-Young platform, as we make steady progress in these initiatives, we are confident in the growth opportunities for us going forward.
Speaker Change: Close to efficient and helps me so symbols of islands of medical and aesthetic practitioners in times of prep products institutions, and so we platform as we made a steady progress in this initiative, we are constant seen the growth opportunities for us going forward.
Xing Jin: In the community e-commerce business sector, we continue to promote a differentiated competitive strategy to constantly consolidate our advantages in high-end projects. By customizing high-end customer service projects to meet the needs of high-end users, we also help organizations to increase profits. In the first quarter, our customer service price increased by 11.3%.
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Xing Jin: In terms of traffic, we have reduced online DRI traffic. Through both in- and out-of-station channels, we actively expand and cultivate accurate e-commerce private domain users. By operating in a private domain, we increase user flexibility and achieve more efficient commercial development. In the first quarter of 2020, our private domain size increased by 19.7%.
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Xing Jin: In our POP segment, we continued to apply our differentiated strategy to solidify our advantage within the premium segment of the market. By offering customer-sized and high-value services, we are not only able to serve high-end users but also assist institutions in increasing their profits. During the quarter, our order value increased by 11.3% year-over-year. In terms of traffic acquisition, we reallocated our budget away from low ROI online channels and instead focused on cultivating and returning a target user base within our private domains. We leveraged various channels within and outside of the So-Young platform and improved user engagement aiming to enhance our monetization efficiency. As a result, in the fourth quarter, users required through private domains increased by 19.7% quarter-over-quarter.
Speaker Change: Yeah ill hop segment, we continued to advantage our differentiated strategy to solidify our advanced H breathing the premium segments of the market by offering customer size and high value services. We are not only able to the sort of high end users, but also assist institutions in both team their profits during the quarter.
Speaker Change: Our order value increased by 11, 3% year over year in terms of traffic acquisition, we allocated our budget away from low R. O I owe my channels and instead focus on calibrating and returning a targeted user base, leading Alberta province domains, where leverage various channels, leaving an outsider.
Speaker Change: So we I'm platform, adding huge user engagement aiming to enhance our monetization efficiency as a result in the first quarter users required after a province domains increased by 19.7% quarter over quarter.
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Xing Jin: Based on the success of our Beijing headquarters in the second half of 2023, we have continued to promote the transition of cooperative stores to chain stores in the first quarter. Three stores opened in the first quarter. The business situation is moving forward according to the planned rhythm. As of May this year, the third batch of stores has also opened and are officially put into operation. In this process, we have established a complete standard business process for opening stores.
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Xing Jin: The opening speed is far beyond the industry level and has set a new record for the speed of power generation in the industry. At present, in other 5 to 6 core cities, we will continue to promote the nationwide layout of the chain stores. In the daily operation of Youxiang business, the user satisfaction of Xinyang is more than 4.9 points, 5 points per month, and the re-purchase rate is constantly increasing.
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Xing Jin: Turning to SoYoung Prime, we capitalized on the success of the model clinic we opened at our headquarters in Beijing in the latter half of 2023. Building upon this momentum, we accelerated our strategy transition from partner institutions towards establishing a chain of clinics. During the quarter, we opened three clinics with operations firmly on track. By the end of this month, we expect to open and commence operations for our third batch of clinics.
Speaker Change: Turning to three I'm fine we capitalized on the success of the model clinically opens at our headquarters in Beijing in the later half overtime to 'twenty three people doing foundation momentum, we accelerated our strategy to transition from partner institutions towards establishing a chain of clinics during the quarter, we opened three clinics.
Speaker Change: With operations firmly on track by the end of June.
Speaker Change: Of this month.
Speaker Change: We expect to open as commercial operations for our first batch of Kleenex Playstation two eight drive this transition we have established a comprehensive and centralized workflow system covering everything from site selection and evaluation to clinic opening at operations. This has enabled us to expand.
Xing Jin: To efficiently drive this transition, we have established a comprehensive and standardized workflow system, covering everything from site selection and evaluation to clinic opening and operations. This has enabled us to expand at a pace that significantly surpasses the industry average and set an industry record for the rollout of new clinics. We plan to expand our chain of clinics nationwide, starting with five to six core cities. At the same time, SoYoung Prime continues to garner exceptionally high user satisfaction, with user satisfaction of over 4.9 out of 5 for each institution every month, at an ever-increasing repurchase rate.
Speaker Change: At a pace that's sitting there ever since they surpassed the industry average and that's aimed is true back coach for the rollout of new clinics, we plan to expand our channeled Phoenix nationwide, starting with five to six quotes they taste at the same time, so yeah I'm fun continues to garner exceptionally high user.
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Xing Jin: Next, I will briefly review the progress of the upstream business This quarter, Korean brand Arasti's product sales have maintained a strong growth 80%. After a year of hard work, we have established a relatively perfect direct sales and agency dual-mode sales system, covering more than 750 institutions. Recently, we launched a series of non-operating hypersonic anti-shake products to replace hypersonic, further enriching the new oxygen light- The pre-sale shipment volume far exceeds expectations, further verifying our reputation and brand advantage in the C-end user group.
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Xing Jin: Lastly, I will provide a quick recap of the process we have implemented in our upstream supply chain business. Sales of the career-bred LRV continue to grow strongly over the quarter, increasing 80 percent year-over-year. In just one year, we have established a mature distribution network that covers 715 institutions through both direct and agency self-channels. Our recent launch of TrueLift, a non-surgical anti-aging ultrasound device, has further diversified our product portfolio, with sales far exceeding expectations.
Speaker Change: Lastly, I will provide a quick recap of the process. We have made in our upstream supply chain business sell so they crib provides and we're all we are continuing to grow strongly over the quarter, increasing 18% year over year in just one year, we have established a mature distribution network that covers 700.
Speaker Change: And 50 institutions through both direct and agency channels I'm Irish recent launch of two leased in non surgical anti aging ultrasound device has further diversified our product portfolio with astellas far exceeding expectations. The success of this product is it test.
Xing Jin: The success of this product is a testament to the strength of our brand, word-of-mouth recognition among consumers, and the domestic whole are able to quickly bring new products to market and rapidly secure their market positions through our expansive institutional network.
Speaker Change: And to the strength over our bright watt of mouth about coordination among consumers and still match rates hold we are able to quickly bring new products to market advantage. They secure their market positions through our its passive institutional and that's what.
Xing Jin: We believe that China still has great potential for growth in the US market. However, after 20 years of development, the public still has a bad impression of the medical industry. A few-dozen-dozen-yuan cotton wound costs several thousand yuan. Many medical institutions don't make money. Various signs indicate that there is a structural problem in the Chinese medicine industry. XinYang will start from the perspective of building a medical platform to integrate the upstream and downstream resources of the medical industry to provide consumers with better and more cost-effective medical delivery services from the fundamental to the actual effect so that the platform can continue to grow in income and profit and ultimately create more long-term value for our shareholders.
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Xing Jin: We recognize the immense potential for growth in China's medical aesthetics market. However, the industry still contends with a less-than-fearable public perception despite its development over the past two decades. While an HA injection that costs tens of RMB can be sold for thousands, many institutions within the sector struggle to turn a profit. Realities such as this point to structural issues. So-Young will address these issues by establishing an industry platform. By integrating the upstream, midstream, and downstream resources of the medical aesthetic industry, we aim to fundamentally reduce costs and increase efficiency and provide consumers with better and more cost-effective medical aesthetic services. This approach is designed to drive sustainable revenue and profit growth for the platform while ultimately delivering greater long-term value to our shareholders.
Speaker Change: And recognize the most potential for growth in China medical aesthetics market. However, the industry still contends with a lifestyle suitable public perception. Despite its departments over the past two decades Wow, a H a injection that's kosta tends to RMB can be sold for solvent.
Speaker Change: Many institutions in the sector has struggled to turn a profit realities, such as Dave pointed to.
Speaker Change: Two structural issues. So young will address these issues by establishing our industry platform by integrity team, they actually midstream and downstream resources. They met coal I start going to treat the aim to fundamentally reduce costs and increase efficiency and provide consumers with better and more cost effective.
Speaker Change: Medical aesthetic services based approach is designed to drive sustainable revenue and profit goals for the platform well ultimately delivering greater long term value to our shareholders.
Xing Jin: Next, CFO Nick will introduce the financial situation for the first quarter, and then we will start the Q&A session.
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Mona Chiao: I will now turn the call over to our staff, Onig, to review the financial results for this quarter before taking your questions.
Speaker Change: I'll now turn the call over to our staff Oh neat to review its actual resourceful. They quote her before taking your questions.
Nick Zhang: Hello, this is Nick. Please be reminded that all announcements quoted here will be in RMB. Please also refer to our earliest release for detailed information about our competitive financial performances on a year-over-year basis. Total revenues during the quarter were RMB318.3 million, up 2.6% year-over-year, exceeding the high end of our guidance. Growth was primarily driven by sales of medical products and maintenance services, which increased 23.3% year-over-year to RMB86.5 million, driven by the sales volume increase of cosmetic products and medical equipment. Information services and other revenues were RMB 208.7 million, a slight decrease of 0.7% year-over-year. Reservation service revenues decreased 22.3% year-over-year to RMB23.1 million, primarily due to the policy change for commission rates and subsidies.
Nick Jonas: Hello. This is Nick please be reminded that all amounts quoted here will be RMB who's also in say two of the earnings release for detailed information of our comparative financial performance year over year.
Speaker Change: Basis.
Nick Zhang: Cost of revenues was RMB 117.3 million, up 3.2% year-over-year, primarily due to increased costs associated with the sales of cosmetic products and medical equipment. Within cost of revenues, cost of services and others was RMB74.2 million, down 8.9% year-over-year, primarily due to a decrease in payroll costs. The cost of medical products sold and maintenance services was RMB43.1 million, up 33.7% year-over-year, primarily due to an increase in costs associated with the sales of cosmetic products and medical equipment.
Speaker Change: Revenues during the quarter were RMB $318 3 million up two 6% year over year exceeding the high end of our guidance growth was primarily driven by sales of medical products and maintenance services, which increased 23, 3% year over year to RMB 86.
Speaker Change: 5 million driven by the sales volumes.
Speaker Change: Volumes inquiries of cosmetic products and medical equipment.
Speaker Change: Information services and other revenues were RMB $208 7 million.
Speaker Change: That's a decrease of 0.7.
Speaker Change: 7% year over year.
Speaker Change: Reservation services revenue decreased 22, 3% year over year to RMB $23 1 million, primarily due to the policy change for commission rates and the subsidies.
Speaker Change: Cost of revenues were RMB $117 3 million up three 2% year over year, primarily due to increased inquiries to costs associated with the service of cosmetic products and imagine a medical equipment.
Speaker Change: Within cost of revenues cost of services and the others were RMB seven to $4 2 million down eight 9% year over year, primarily due to a decrease in payroll costs.
Speaker Change: Cost of magical products sold on a maintenance services were RMB $43 1 million up sort of three 7% year over year.
Speaker Change: I'm only due to an increase in costs associated with the sales of cosmetic products.
Speaker Change: The medical equipment.
Nick Zhang: Total operating expenses were RMB 237.8 million, up 3.5% year-over-year. Sales and marketing expenses were RMB 113.3 million, up 0.7% year-over-year, primarily due to an increase in payroll costs associated with the expansion of our marketing team. G&A expenses were RMB85 million, up 38.1% year-over-year, primarily due to an increase in payroll costs associated with the expansion of administrative employees to support the enhancement of our core and new strategic businesses. R&D expenses, or R&B, $39.6 million, down 29% year-over-year, primarily attributable to improvements in employee efficiency and income tax benefits of RMB 2.6 million compared with our income tax benefits of RMB 4.3 million in the same period of 2023.
Speaker Change: Total operating.
$237 8 million up three 5% year over year.
Speaker Change: Sales and marketing expenses were RMB $113 3 million up two upon 7% year over year, primarily due to our increase in payroll costs associated with the expansion of our marketing teams.
Speaker Change: Yeah.
G&A expenses were RMB eight 5 million.
Speaker Change: And then an upsell to eight 1% year over year, primarily due to an increase in payroll costs associated with the expansion of the administrative employees to support the he has meant of I'll call. It a new strategic businesses.
Speaker Change: Our R&D expenses were RMB, $339 6 million down 29% year over year, primarily attributable to improvements in employee efficiency.
Speaker Change: Income tax benefits were RMB, two six minute compared with income tax benefits of RMB $4 3 million in the same period of 2023.
Nick Zhang: The net loss attributable to So-Young was RMB21.2 million compared with a net loss of RMB11.9 million during the same period last year. Non-GAAP net income attributable to So-Young was RMB4.1 million compared with a RMB2.8 million non-GAAP net loss attributable to So-Young in the same period of 2023. Basic and diluted losses per ADS attributable to ordinary shareholders of RMB0.21 and RMB0.21, respectively, compared with basic and diluted losses per ADS attributable to ordinary shareholders of RMB0.12 and RMB0.12, respectively, during the same period of 2023.
Speaker Change: Net loss attributable to Sylvia was RMB $21 2 million compared with a net loss of RMB $11 9 million during the same period last year.
Speaker Change: non-GAAP net income attributable to <unk> was RMB $4 1 million compared with RMB, two 8 million net non-GAAP net loss attributable to so young in the same period of time.
Speaker Change: 23.
Speaker Change: Basic and diluted loss per a D. S attributable to ordinary shareholders were RMB 0.21 in the RMB zero point to one respectively, compared with basic and diluted losses per ads attributable to ordinary shareholders of RMB zero point in 12, and RMB zero point in 12, respectively.
Speaker Change: During the same period of 2023.
Nick Zhang: We have maintained a robust cash position with cash and cash equivalents, restricted cash, and term deposits, term deposits, and short-term investments totaling RMB1.3 billion as of March 31, 2024, effectively flat when compared with December 31, 2023. For the second quarter of 2024, we expect total revenues to be between RMB 380 million and RMB 400 million. Our outlook is based on current market conditions that reflect the company's preliminary estimates of market and operating conditions and customer demand. This concludes our key remarks. I will now turn the call over to the operator and open the call for QA. Operator, we are ready to take practice.
Speaker Change: We have maintained a robust cash position.
Speaker Change: The cash on cash equivalents restricted cash and term deposits tend to do about it.
Speaker Change: Short term investments totaling RMB, one 3 billion as of March 31st 2024.
Speaker Change: Effectively flat when compared with December 31st 2023.
Speaker Change: For the second quarter of 'twenty 'twenty four we expect total revenues to be between RMB 380 million and RMB 400 million to up about outlook is based on the current market conditions that reflects the company's preliminary estimates of market and all.
Pricing conditions and the customer demand.
Speaker Change: This concludes of Oh, all came in remarks, I'll now turn the call to the operator and open the call for Kiwi.
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Operator: Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. To ask a question, you may press the star key and then one on your touch-tone phone. If you are using speaker equipment, please pick up your handset before pressing the star key. To withdraw your question, please press star and then 2. Again, if you would like to ask a question today, please press star and then 1. The first question we have comes from Chloe Wei of CICC. Please go ahead.
Speaker Change: Thank you so ladies and gentlemen, we will now begin the question answer session to ask a question you May Press Star then one on your Touchtone phone.
Speaker Change: If you are using speaker equipment piece pick up your handset before pressing the star keys.
Speaker Change: To withdraw your question. Please press Star and then two.
Speaker Change: Again, if you would like to ask a question today. Please press star and then one no.
Speaker Change: First question, we have comes from E rate of TICC. Please go ahead.
Chloe Wei: Thank you for the question. First of all, the performance of the first quarter was very good. The new business seems to be growing very well, so I feel that the management team's speech also revealed more positive expectations than at the beginning of the year. So I would like to ask the management team if they can share the current changes in the industry trend and our outlook on the growth of the previous year's revenue.
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Speaker Change: I'm sure that you've got some tonnage out well so let me translate myself. Thanks management for taking my question. Congrats on the solid first quarter results on the top line well ahead of our expectation. So my question is about the full year outlook from what we call from the prepared remarks I believe all the time you have to have more pause.
Chloe Wei: Thanks, management, for taking my question. Congratulations on the solid first quarter results. The top line was well ahead of our expectations. So my question is about the full-year outlook. From what we got from the prepared remarks, I believe our time has turned more positive. So is there some trend maybe management wants to share with us? And given the headwinds from the macro, how should we think about our full-year top-line growth? Thank you.
Speaker Change: So is there some trend and maybe you might even want to share with us.
Speaker Change: And given the headwinds from the macro how should we think about our full year top line growth. Thank you.
Speaker Change: Yeah.
Xing Jin: Thank you for your question. In the first quarter of 2024, the development of the pharmaceutical industry was basically consistent with our observations and judgments at the beginning of the year. First of all, the E-commerce market in China is gradually recovering with the recovery of the overall consumer market. In the first quarter, the total number of consumer products in society increased by 4.7%. E-commerce consumption data also shows a gradual increase in trend.
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Xing Jin: Second, as the maturity of e-commerce users increases, their needs are more diverse. Therefore, it is difficult to attract high-quality e-commerce customers in a single low-priced way. We need more products and services to meet the needs of users.
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Xing Jin: Development in the medical aesthetics industry in the first quarter is in line with our observation and expectation at the beginning of the year. First, the Chinese medical aesthetics market is gradually recovering with the overall consumer market. As retail sales of consumer goods in China increased by 4.7% year-over-year in the fourth quarter, medical aesthetics consumption data has also reflected a gradual growth trend. Second, as the medical aesthetics user group tends to mature, user demands are more diversified. It's difficult to attract high-quality clients simply with low prices. Instead, more enriched products and services are required to cater to differentiated user demands.
Speaker Change: Several months of medical aesthetics industry in the first quarter is in line with our observation and expectation at the beginning of the year first the Chinese medical aesthetics market is gradually recovering with the overgrown construction markets.
As retail sales of consumer goods in China increased by four 7% year over year in the fourth quarter medical aesthetics consumption data has also reflected eight grandchildren trade second I've seen medical aesthetics user groups tens mature usually the miles are more diversified it's difficult to archrock.
Speaker Change: Act high quality clients simply with low prices.
Speaker Change: He reached the products and services are required to cater to do fishy taste users mountains.
Xing Jin: In the next 20 years, we will keep our business strategy stable and build a medical industry platform based on our existing business. We will collaborate with the medical industry to provide high-quality and cost-effective medical care services to our customers. In 2024, we will maintain our strategies based on our...
Speaker Change: Is arsenio little jump out surely you would sound like do you say Oh, yeah, well they teach coach of English language and pilot churches, who Hollywood single shot you will see us jumping until they saw what your whole culture culture is happy to you know its helpful.
Xing Jin: In 2024, we will maintain our strategies based on our existing business. We will establish a platform that vertically integrates upstream supply chains, midstream operations, and downstream distribution channels to fundamentally optimize costs and enhance efficiency. This strategy approach will enable us to deliver superior and more cost-effective services to consumers. Xie Xie.
Speaker Change: 'twenty 'twenty four we will maintain our strategies based on our existing business, where we have established a platform that's vertically in terrorism upstream supply chains midstream operations and downstream distribution channels to fundamentally optimize close any house efficiency. This strategy approach.
Speaker Change: Will enable us to deliver superior at more cost effective services to consumers.
Speaker Change: Tissue.
Yeah.
Speaker Change: Uh huh.
Operator: Thank you. The next question we have comes from He Xinpeng of CITIC Securities. Please go ahead.
Thank you.
Speaker Change: Okay next question.
Speaker Change: Thank you. The next question we have comes from Asian pump of C. A T C. T. I C Securities. Please go ahead.
Xing Jin: Thank you, everyone. Thank you for the opportunity to speak. It's an honor for me to be able to speak in front of all of you.
Speaker Change: Hey, guys. Yeah go ahead.
Speaker Change: Okay. She joins you wait and hear sugar of course is that.
Speaker Change: When they go attention.
Speaker Change: Sure.
Speaker Change: It should be.
Speaker Change: Georgetown Fisher.
Speaker Change: Yes sure.
Speaker Change: Uh huh.
Speaker Change: I'll take a shot at yard they're not just shoot you go pulp Yelp Joseph idea that you can do or don't do need to close. The Jabil you are assuming I know you got to negotiate so okay. Thanks for this opportunity I guess two questions. Firstly, how would you consider at all.
There's no metrics the check and they use and what it is.
Is it different.
In this.
Speaker Change: Intensified traffic competition yet.
Speaker Change: Thank you.
Xing Jin: Hello, thank you for your question. The first question is, in terms of online traffic, all industries are experiencing intense traffic competition. In addition to the app, we continue to use community content and self-media resources to increase community activity to attract more natural user traffic. On the other hand, we are also vigorously operating in the private domain to try to connect the app and the private domain. Through private domain storage and increasing user activity, we are opening up new traffic pools.
Oh gosh, that's you're right.
Speaker Change: Cleveland Hino toy show something like Hot cocoa.
Julie: Oh, yeah, sorry, Julie to clear the wholly owned.
Julie: But the one on the new tissue with homework yeah, Yeah. That's.
Such a literal some HQ2 and Hugo so to who you do like seeing cold water theory of Hollywood out not only if I'm you know I'm, sorry, Italian tissue seem really houses by Iqos series that whole cohort C. They'll try it with.
Julie: So you'll put up where you do a car to a singular answer our triple for shoot you an email files I mailed them yet.
Xing Jin: This part of the data is not reflected in MAO, but from the recent GMV online payment orders, the transaction data is basically stable. This also shows the effectiveness of this strategy. At the same time, it also reduces our traffic costs and improves profits. In terms of third-party traffic cooperation, we pay more attention to the accuracy and efficiency of traffic to reduce DRI traffic, further reduce traffic costs, and improve platform profits.
Julie: Since he.
Julie: They say Helen Xu for dealers, who doesn't tell you showed you a lot of country better Hirsch about children, even though that's it suddenly a lot until you Toyota you'll shellshocked.
Julie: You should also know you're telling to yellow.
Julie: But the Ot solar lyric sorry D. Sorry, finally, what else would you will find me it well that includes our crown jewel even on the children to her telephone showed you a tell in D. T O R. The Nordland telephone people are generally doing alcohols home, but she celgene hardly ratio of him.
Xing Jin: In terms of online traffic, all industries are experiencing intensified competition for traffic. For So-Young APP, we continue to boost engagement and attract more organic user traffic through the operation of community content and self-media resources. In addition, through extensive private domain operations, we strive to connect So-Young APP with private domains, expanding its traffic pool as we increase private domain rotation rate and user engagement. This part of data is not reflected in our MEU, but judging from recent transition data such as GM Wei and online orders, it has remained basically stable.
Speaker Change: In terms of Oh, my traffic all industries are our Asbury St in terms of as far as competition for traffic for somehow a P. P. We continue to both engagement and attract small organic user traffic the operation of community content and self media resources, Yeah edition, So X times, they privates domain.
Speaker Change: <unk>, we strive to go to connect so we are a P. P with privates domains expanding its traffic pool actually increased private domain mutation rate and user engagement. This parts of data, it's not reflect hating over M EU, but judging from the recent transition date hooks that trying to jam, we Oh my others.
Speaker Change: It reflects it has remains basically stable it takes months to the effectiveness of this strategy is kind of also helps lower our traffic cause any house profit surgery in terms of cooperation with third party traffic sources, we emphasize on traffic I'm curious a placement.
Xing Jin: Hints to the effectiveness of this strategy. It can also help lower traffic costs and enhance profits. Lastly, in terms of cooperation with third-party traffic sources, we emphasize traffic accuracy and placement ROI, reducing budget for channels with low ROI to further reduce placement costs and increase margins of our platform.
Speaker Change: I mean do you aspire to reach four channels with low R. O I to further reduce our placement costs and increase margin instead of YY platform.
Xing Jin: The second question is, compared to the first one, XinYang has two advantages in terms of diversification and competition. One is that our users are of high quality and the price is high. The second is that we have the advantage of having a free medical institution, including XinYang's chain and shared hospital. So we have more room for innovation.
Speaker Change: They are the ones who shall he or.
Speaker Change: Yeah, It's how you want to go there you'll surely uncle.
Speaker Change: You show them the value of Hudson uncle, Kalanchoe offshore Manning yield shows how that seal units you go there you'll ship bulk horse here that is short horticulture yeah sure.
Speaker Change: So you will nail cleaned out of Chongqing food, yet the socially good Cook well Nigel just curious I mean, you all too.
Xing Jin: For surgical customers, we organize offline face-to-face consultations, inviting famous doctors to focus on the patient's face, helping the patient save time and transportation costs. And face-to-face communication also improves the user's decision-making efficiency. For high-end injection-related customers, we select high-quality doctors on the platform and complete the appointment and delivery within our own or cooperative institutions. In this way, we can have stronger control of the appointment and delivery process; at the same time, we have the right to price, and we can do the user-friendly operation at a slow pace, avoiding the risk of user loss. Compared to our peers, we have
Speaker Change: He told me he said, yes, she's already Hmm is at bio who chose to Joe's whole language Osmose Homebody are meant to show you what else you to show you two you called on to sell a cool cool when they essentially impute horizontal Godzilla you show so I wouldn't in city, what are your thoughts or the chicken with a bunch of them, it's awful sell like crazy.
Speaker Change: So hopefully you'll go China quota pushes on all those things are true ours, you'll clearly be one door to door. That's usually how youre you female are usually with sugar for the ship.
Xing Jin: Compared to our peers, we have two advantages. First, we have high-quality users and a high average order value.
Speaker Change: Compared to our peers, we have two fishy taste on one page. So so we have high quality users and a higher average order value that comes with benefits from our own offline medical as that's kind of our institutions, including so yangsheng kleenex and shared hospitals, which provide us with great headroom for Nova.
Xing Jin: Second, we benefit from our own offline medical aesthetic institutions, including So-Young chain clinics and shared hospitals, which provide us with greater room for innovation. For surgical customers, we organize offline consultations and invite multiple renowned doctors to participate. Centralized consultations help users save time and transportation costs, and face-to-face communication also improves users' decision-making efficiency. For high-end injection customers, we screen high-quality doctors on the platform and complete service delivery within our own or cooperative institutions. With this approach, we have stronger control over the contract fulfillment and delivery process while simultaneously commanding price power and conducting refined user operations in a closed-loop manner, thus avoiding the risk of user attrition.
Speaker Change: Asian first surgical customers well organized offline consultations on in whites, most renounced doctors to participate centralized consultations help users save time and transportation costs and face to face communication also improve users' decision making efficiency.
Speaker Change: So high and injection customers be scoring high quality doctors on the platform and complete service deliveries, leaving our own all corporations and institutions with this approach we have stronger control over the contracts for fulfillment and delivery process well, it's the Newtown.
Speaker Change: Obviously commanding price power and conducting you would find to use their operations in a closed loop manner, thus avoiding the risk of abuse arbitration.
Speaker Change: Yeah.
Speaker Change: Thank you.
Operator: The next question we have comes from Yi Bing of Haitong. Please go ahead.
Speaker Change: The next question we have comes from Keybanc capital. Please go ahead.
Speaker Change: Yeah.
Yi Bing: Thank you, Guan Licheng. Congratulations to the company for achieving excellent results under the great environmental pressure of the first quarter.
Speaker Change: Oh, okay. Okay.
Speaker Change: Oh gosh, if at any time, yeah, especially I'm going to go with this.
You can do what drove that and then she goes down you said are yet what countries Douglas Lindsay Savarese, you always know Johnson <unk> Johnson with me.
Yi Bing: My question is about XinYang YouXiang. Is the current development of XinYang YouXiang in line with expectations? And what is the long-term plan for our self-owned chain store? Is the current progress of opening new clinics under So-Young Prime in line with your expectations? And what is your mid-term to long-term plan for proprietary chain clinics?
Speaker Change: Berke I didn't think Joshua Vogel for you chip.
Speaker Change: Yeah sure at that number because I think it was like you know don't conflict with what cause that younger okay. Thanks.
Speaker Change: Management I'll translate myself my question I always thought that the story on crime I want to ask is the current progress of the opening new clinics and that's the way I'm try them in line with your expectations and what's your midterm to long term plans for our proprietary shrank mimics.
Thank you.
Xing Jin: Hello, thank you for your question. At the beginning of this year, we planned to open 15 EMEI-linked institutions this year. At the end of the first quarter, we opened three new institutions. At the beginning of the second quarter, we opened two new institutions. At present, the total number of institutions has reached six, which is in line with expectations. At the same time, we have established a standardized process from selection to opening, which has greatly improved the opening speed of EMEI-linked institutions and created a new record in the industry.
Speaker Change: Oh, I should say that you're right.
Speaker Change: 10 inch when a woman, who watch and yes, there's some high school job.
Speaker Change: Email Nashville, Chico J J E T. Two more Shanghai Alessandra Genco judgments about your I know you wish in Carlisle R Chop, which and so once you go through with you in downtown La Lucha sounds here for Ya cheap we supposed to know on the children that you'd hall Trisha. This is Paul Cayer that Belgium, Hollywood saw tough, which he showed.
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Xing Jin: We planned to open 15 clinics in 2024 at the beginning of the year. By the end of the first quarter, we had opened 3 clinics. Since then, we have added 2 more before today's earnings. Now we are opening 6 clinics in all, generally in line with our expectations. During the process, we have established a comprehensive and standardized workflow system, covering everything from site selection and evaluation to client opening and operations. This has enabled us to expand at a pace that significantly surpasses the industry average and set an industry record for the rollout of new clinics.
Speaker Change: We have plans to open 15 clinics in 2020, one as the beginning of the year by the end of the first quarter. We opened three clinics. Since then we've added two more before today's earnings now we are opening six clinics and all generally in line with our expectation during the process. We have established a comprehensive.
Speaker Change: And centralized workflow system covering everything from site selection and evaluation to clients called the opening and operations. This has enabled us to expand at a pace that's sticking into since they used to pass this industry average and stuff are industry records for the Rollouts of new clinics.
Women Chandelle Chongqing Qingdao Shijiazhuang told me with Hollywood shoot, Belgium, Chile, Chile, Chile is Soho neighborhood are you just telling me who so should.
Xing Jin: We emphasize quality, cost-effectiveness, transparency, and non-conformity so that standardized beauty is the first choice for daily beauty care. In the next three years, we expect to reach a joint scale of 100 to 150 products.
Speaker Change: Well, I suddenly or maybe to adult E by adult ebay wishes other initial anymore.
Xing Jin: Emphasizing authentic products, cost performance, and transparency, our aim is to position standardized light medical aesthetic services as the fourth choice of everyday cosmetic conception. We expect to reach the scale of 100 to 150 clinics in the next three years.
Speaker Change: Emphasizing authentic products coast performance and transparency. Our aim is to position centralized large medical aesthetic services and the first choice every day cosmetic conception.
Speaker Change: We expect to reach the scale of 100 to 150 clinics in the next three years.
Xing Jin: At the same time, we continue to build an institutional operating team to combine the advantages of free supply chain product supply, development, and innovation. We will promote the standardized management system of Qingyi-Mei institutions, at the same time promote the online construction of the whole process of institutional management, and improve the operational and management efficiency of the institutions. In the future, we will continue to promote the performance and evaluation of joint institutions and reduce the fixed and variable costs of various institutions, gradually improve the penetration rate of free supply chain products, improve the profit space of chain institutions, and provide users with a higher cost-effectiveness ratio.
Speaker Change: So it kind of in that whole ship, well, then tissue tortilla and Chico Union country cheerful, let's see who really in terms of go to U K Fox. So that's how the tender youll ship.
Speaker Change: Switching to image Hugo, Belgium high quality sheet posted twitching Hugo colleague Charlie with her social watch it sure he's got Chico meal for quality shoddy rely on and junk sushi tweaking.
Speaker Change: Chico Douglas Charles Okay. So John D. Kushan, calling until now have been those home, but towards E. G O convenience hunting I shouldn't hold U T. So yeah short you called out even cogent posts you pay your quota you go golf shoes are beautiful.
Xing Jin: While expanding our chain of clinics, we continue to build our operation team. Combining our advantages in product supply, development, and innovation, we are driving the build out of a standardized management system for light medical aesthetics institutions, as well as online process management capabilities to improve operating and management efficiency for institutions. In the future, we will continue to improve efficiency per staff and efficiency per unit area for our chain of clinics, increase penetration of our proprietary supply chain products, and improve margins of our chain clinics while providing users with more cost-effective services.
Speaker Change: While expanding our channel clinics may continue to build our operation team combining our advantages in product supply development and innovation, we are driving the abuser out surveys analyzed management systems for like medical aesthetics institutions as well as.
Speaker Change: And all my process management capabilities to improve operations at management efficiency for institutions.
Speaker Change: In the future, we will continue to improve efficiency per stuff any efficiency per unit area for our child clinics increased penetration of our preparatory supply chain projects improved marching overarching clinics, while providing users with more cost effective services.
Speaker Change: So I just showed you that whole ship well now go to Josh Joshi order magnitude on NUCYNTA Yehuda E surely actual Chico social oaken, but toll should you like hut you'd also you usually do you go to you who might need to top up the mutual shabad shop for a home you cheat.
Xing Jin: While improving efficiency, we pay more attention to user satisfaction. We are well aware that user satisfaction is the foundation for the survival of a consortium. From the data, in January to April, the user satisfaction of consortia was 98% or more, which was in line with our expectations.
Xing Jin: User satisfaction is fundamental to chain operation. With that in mind, we emphasize user satisfaction more. From January to April, user satisfaction in our chain of clinics reached 98%, and was in line with our expectations. Thank you.
Speaker Change #100: User satisfaction is fundamental to ching operation, it's actually might emphasize more on user satisfaction from January to April user satisfaction yards chain of clinics reached 19, 8% and in line with our expectations.
Speaker Change: Sure sure. Thank you.
Speaker Change: Yes.
Operator: The next question we have comes from Joey Tan of Jefferies. Please go ahead.
Speaker Change #101: The next question we have comes from Joey ton of Jefferies. Please go ahead.
Speaker Change #101: Yes.
Joey Tan: Thank you for giving me the opportunity to ask this question. First of all, congratulations on the company's good performance. I have two questions for the management team. The first question is about whether there are any new developments in the commercial supply chain. The second question is about the company's account and cash reserves. I see that there are about RMB 1.3 billion. What are the future plans and needs? Let me translate that myself.
Speaker Change #102: You can check language on June one to the tune of two quick switching going cheap concrete you buy now.
Speaker Change #103: Well I don't want to count that when.
You go once a sequential comment.
Speaker Change #104: Yeah Yeah.
Speaker Change #105: But concert that John Johnson controls and all that kind of or some things I mean, when I was like Wow I want to wish.
Speaker Change #104: Hmm.
Joey Tan: Thanks to management for taking my question, and I have two questions. The first question is, can management share on new progress for the upstream supply chain business? And the second question is, with the cash reserve of a progressing equity of 1.3 billion, what is the future plan and usage? Thank you.
Speaker Change #104: I'm talking about myself.
Speaker Change #106: Thanks for taking my question and I have two questions.
Speaker Change #107: My question is conventionally sure Coco as well right.
Speaker Change #106: Hmm.
Speaker Change #106: And the second question is with the cash reserve.
Matthew: Matthew I'm going to be one 3 billion.
Speaker Change #109: That's a complaint in the USA.
Xing Jin: Hello, I will answer the first question. In terms of products, Elasti continues to keep a strong foothold. The first quarter's shipment volume increased by 80%, and the income increased by 56.5%. At the same time, we only spent a year establishing a relatively comprehensive agency system. The agency system covers more than 750 medical institutions.
Speaker Change #109: And you saw diesel and fuel with Oh, sorry is how many are from it Shiloh T tissue biopsy. The challenge in this shithole digital which will allow and told me. It turns on box was a posture showroom told me it turns on passenger or slow down.
Speaker Change #109: You sure Toshi or N C O N E N J Jill Chilean I shall do like I said, a little itchy she COBOL daily Hood see Chico equal Sky Toguchi by where she got you let you go.
Xing Jin: On the product side, first, Aravi maintained strong momentum, with sales increasing 80% year-over-year and revenue increasing 56.5% year-over-year in the fourth quarter. In addition, we spent just one year to establish a mature distribution Network, covering 715 institutions through both direct and agency self-channels. In the future, we will continue to integrate on the upstream supply chain, help companies to increase profit and return to users with products of sound cost performance
Product side, so it's a rather them attain strong momentum with sales increasing 80% year over year and revenue increased 56, 5% year over year in the fourth quarter. In addition, we spent just one year or two established a mature distribution networks covering a set of 115 institutions.
Speaker Change #109: They were both direct and agency stuff channels in the future. We will continue to integrate them upstream supply chain help companies to increase profits and really trying to users with profit products of sounds coast performance, reaching where you.
Speaker Change #109: One situation.
Speaker Change #110: Well since you called out some people quite <expletive> junior notes, which will mean boutique. So timesheet treaties household tissue for their latest hunting boot you saw you saw what you're doing social delegates, how you're cheap Tibor yen zillow or as I said why you would change on their co pay for people who are used to it.
Xing Jin: We continue to expand our product line and launch face-to-face promotion products this year We continue to enrich the product layout of optical electronics At the pre-sale stage, the sales volume is far beyond expected This further verifies our reputation and brand advantage in the C-end user group As well as the ability to cover the B-end network Thus, we can quickly establish the market competitiveness of new products In the future, as other products are gradually launched, we believe that the revenue and profits of our upstream platforms will have very good sustainability.
Speaker Change #110: It would be trying to go longer if we kind of leave Jay our Suzhou tele, sometimes this isn't until earlier than it would be.
Speaker Change #110: She is a woman put you, though she'd have champions.
Speaker Change #110: Well the assumption when I saw you bought acquired a showroom Hollywood Muji junky old faithful holiday. So she was only up.
Xing Jin: Second, we continue to expand our product pipeline. The launch of our facelift product, TrueLift, further diversifies our photoelectric category with sales far exceeding expectations. This is a testament to the strength of our broad word-of-mouth recognition among consumers and domestic how we are able to quickly bring new products to market and rapidly secure their market position through our expansive institutional network. We expect to add more products and continuously generate incremental revenue and profit growth from the supply chain business.
Speaker Change #111: Second we continue to expand our project pipeline the launch of a face lift product to lift further diversifies, our photo electric category, which sounds far exceeding expectations.
Speaker Change #111: It's a testament to the strength of our power brands, what Oh mouth recognition among consumers and still mass truth, how we are able to quickly bring new products to market and rapidly secure their market position. So our expensive institutional network, we expect to add more products at a continuously generates incremental revenue.
Speaker Change #111: Menu and profit growth from the supply chain business.
Nick Zhang: This is Nick. I would like to answer the second question, which is about the future use and planning of Xing Jin. First of all, we will continue to develop a new business layout along the upstream and downstream of our industry, including the layout of our upstream shares and the layout of our downstream chain institutions, to lay a solid foundation for the strategic planning of our entire industry integration. Secondly, we will continue to pay back to our shareholders through our stock repurchase plan and the possibility of future potential dividends.
Nick Jonas: This is Nick.
Speaker Change #112: He's got a close to a until you win a few of them juggled on teacher, She mentioned that syndrome symptom.
Speaker Change #113: You want to hope, we Wow, especially I know in no way a sushi.
Speaker Change #114: And if so how you go through the year with a boat you Judy Meehan Borecole Michelle.
Speaker Change #115: Bluetooth I own myself, Oh, that's what you're going to put you know they are women.
Speaker Change #116: Uh huh.
Speaker Change #117: I will hop in here and good to ensure that's useful.
Speaker Change #117: Java and I'll just show them the haulage to shoot Xiaodong, who don't work with taxes, a woman local health. When you go that you what you realize change that I would single cell phone Oakland I'll, just shoot a horse power.
Nick Zhang: I will translate. We will use the cash for two purposes. First of all, we will continue expanding along the upstream and downstream of the industry, including the upstream product pipeline and downstream chain clinics, to lay solid ground for our integrated industry platform. And secondly, we will implement a repurchase plan or potential dividend to return values to our shareholders.
Speaker Change #118: But I was trying to say what about use of cash for two purposes first of all we will continue expanding along upstream and downstream of the industry, including upstream product pipeline and downstream Champ clinics to lay solid ground for our integrated industry platform.
Operator: Thank you. Thank you, sir. Ladies and gentlemen, we have reached the end of our question and answer session and our conference. Thank you for joining us today. You may now disconnect your lines.
Speaker Change #118: And secondly, we want a share repurchase chevron's first touches a pad or a potential dividend to return value to our shareholders. Thank you.
Speaker Change #118: Yeah.
Speaker Change #119: Thank you so ladies and gentlemen, we have reached the end of our question and answer session and our conference. Thank you for joining US today you may now disconnect your lines.
Speaker Change #119: Okay.
Speaker Change #119: Okay.
Speaker Change #119: [music].
Operator: Thomas Chong, Fuk Cheung, Vivian XU, Xing Jin, Hui Zhao, So-Young International Inc Thomas Chong, Fuk Cheung, Vivian XU, Xing Jin, Hui Zhao, So-Young International Inc Thomas Chong, Fuk Cheung, Vivian XU, Xing Jin, Hui Zhao, So-Young International Inc Thomas Chong, Fuk Cheung, Vivian XU, Xing Jin, Hui Zhao, So-Young International Inc Thomas Chong, Fuk Cheung, Vivian XU, Xing Jin, Hui Zhao, So-Young International Inc [inaudible]
Speaker Change #119: Okay.
Speaker Change #119: [music].