Q2 2024 So-Young International Inc Earnings Call

August 23, 2024

ladies and gentlemen thank you for standing by for so young second quarter two thousand and twenty four earnings conference call

Operator: Second quarter, 2024 earnings conference call. At this time, all participants are in a listen-only mode. After management gives their prepared remarks, there will be a question-and-answer session. As a reminder, today's conference call is being recorded.

Speaker Change: at this time all participants are in listen only mode after management gives our prepared remarks there will be a question to answer session

Operator: I would now like to turn the conference over to your host for today's call, Ms. Mona Qiao.

mona ch: as a reminder today's conference call is being recorded i would now like to turn the conference over to your host for today's call miss mona ch please go ahead missmona

Mona Qiao: Please go ahead, Ms. Mona. Thank you, operator, and thank you, everyone, for joining So-Young's second quarter 2024 earnings conference call.

mona ch: thank you operator and thank you everyone for joining solium's second quarter on twenty four earnings conference call joining me today on the call is mr singing our call on chairman as theo and miss turn next job sa o please note that the discussion today will contend forward-looking statements made under the stateve habor provisions of the u s private securities

Mona Qiao: Joining me today on the call is Mr. Xing, our co-founder, chairman, and CEO, and Mr. Nick Zhao, SAF O.

Mona Qiao: Please note that the discussion today will contend for the low-instruments made under the September provisions of the U.S. Private Securities and the Litigation Reform Act of 1995. Four low-instruments are subject to risks and alternatives that may cause actual results to deformity purely from other current expectations. Potential risks and alternatives include, but are not limited to, those outlined in our public finance with SEC, including our annual report on Form 20-F. So-Young does not undertake any obligation to update any for low-instruments, except as required under effort below.

mona ch: state litigation reform act of one thousand hundred nety five forward-looking statements are subject to risks and alternati that may hold actual results to differ materially from our current expectations potential risks and uncertainties include but are not limited to those outlining our public fning with assesa including our annual reports our from twenty half

m singine: so on does not undertake any obligation to update any forward-looking statements except as required under applate below and this time i'd like to turn the call over to m singine

Xing Jin: And this time, I'd like to turn the call over to Mr. Xing. This is Earnings Call. Our performance during the second quarter was so late. This total range of RMB 474 million, exceeding the top ends of our guidance, non-GAAP net profit, what RMB 22.2 million, up 43.1 percent year-over-year, showcasing our high-quality growth at the effectiveness of industry integration.

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Speaker Change: hello everyone wewilllcome to today's earnings call i will performance during the second quarter would solid this total gramue of r mb for hro and some point fourmillam extuding the top end of our of our guidance

Speaker Change: non-gaap net profit was m b twenty two point two main atp forty three point one percent the-over-year showcasing our high quality grouth at st actiumvates of industry integration

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Xing Jin: This is the first time in the U.S. and the company of the low-instruments in the U.S. and is currently in the U.S. selling high-quality and 持續-developed new stages of development.

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Xing Jin: We have the high-quality, high-quality, and 持續-developed high-quality and 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持-developed high-quality, 持-developed high-quality, 持-developed high-quality, 持-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed high-quality, 持續-developed Next, let's look at the two-digit-5 development situation.

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Speaker Change: we cap ital ized trade exact exactly our drtory made in pric progrgress during the quarter per our new business seglements continue to grow rap revenue from the medical products at mten services racing r b one hundred and six mill twenty two point six percent over year product sha our abstrange suply train business increaseed and our tranne clinics expanded those contributing significant way to growth we are the only plusatform covering the tory m and down am of the entire as that co indthetory and are theindustry error high quality and some development

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Speaker Change: this closely a li thing just revalue try with involving consumer needs sures a diverse range of high quality and affordable products optimize the customer experience and rify standards for medical aesthetic services

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Xing Jin: In the mobile phone, we continue to promote high-resolution development strategies. Through the use of modern tools, we have been able to achieve a number of things with modern technology. We have been working on the development of high-resolution products in the public market. We have been able to look at the development of high-resolution products using high-resolution products in the future.

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Xing Jin: We have been able to look at the development of high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using 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using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products using high-resolution products by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by by 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Speaker Change: we continue to drive high-quality development in our part segment and strengthen our a competitive advantageation the made to high end market by by refining operations and deploye target user subsidies

Speaker Change: with client amount for premium customized products growing we adjust our structur and upgrandedate as k use ensuring their authenstate and further ageed they categories offered by our lading partner inst institutions we also strengthen support for high quality institutional partners by integrity our part business with our channel clinics to create deper as greatater synergies

Speaker Change: enabling us to better makeet the inolving and diverse medical aesthetic needs of mamade to high end users

Speaker Change: in the second quarter j m away from medico astake products and services reached r m b before handhundred and twenty eight mailing are over to hard and thirty thousand verified orders around seventy percent and eight percent respectively we continue to optimize our traffic acquisitition diretory by realallocating budgets away from low o i channels to our report private domain

Speaker Change: weref mululttichannelof private domain operations allows us to calculvate and retain a target user base and riviews their engagement as monetitorzation efficiency in the second quarter the use of private domains reached eight hundred and ten thousand our fourteen percent quarter quarter

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Xing Jin: Currently, we have opened 14 clinics in front of commercial areas in eight core cities, including Beijing, Shanghai, Shenzhen, Hangzhou, Chengdu, Wuhan, Chongqing, and Changsha. All of these clinics are fully operational and performing in line with expectations. There are generally strong user base, the reputational strength of our blood and standardized fulfillment capabilities. The number of verified customers increased by 85% quarter to quarter; the repeat per transfer rate exceeded 60%. And customer satisfaction improved to reach an impressive 4.97 out of five. We've also achieved solid operational efficiencies. For example, our Beijing clinic generated revenue of 6.2 million in June, with pretext profits of 1.3 million and a profit margin of around 20%.

Speaker Change: less move well to so um fres currently we have op sortty clinics in prme of commercial areas in age causitities including theyen shall actchang and hunl chanddol have chunting and chunsha of these clinics are fully operational and performing in line with expectations

Speaker Change: leverage our strong user base the reputational strength of our brad and and standard died fulfillment capabilities the number of verified customers increased by eighty five percent quarter quarter it repeat purchance rate exceedated fifty percent and customers satisfaction improved to rage i imppriceive nine point sey

Speaker Change: four points ninety seven of five we've also achieved solid operational efficiencies

Speaker Change: for example our basijing clinix generated revenue of six b two mainilla in jwe with pretax profit of one point three and m and a profhe margin of overaround twenty eight percentent

Xing Jin: The repeat per transfer rate hit 67%, higher than the industry average. Notably, both units' area efficiency and monthly revenue per doctor outperformed traditional clinics. The experience we have accumulated from these providers with valuable insights that we will apply to other new clinics to accelerate their growth.

Speaker Change: the repeat perchance rate hat sixty-seven percent higher than the industry average not by both unit area efficiency and multi revenue per doctor outperformed traditional clinics

Speaker Change: the experience we have accumulated from this providers with valuable insights that we will apply to other newu clinics to accelerate their growth

Xing Jin: We are very optimistic about the future of light medical aesthetic clinics. As planned, we began franchising our chain of clinics in the second half of this year in order to rapidly expand our footprint by replicating this proven standardized model in the target state. In the last month, we have been able to provide a new product to the core of the industry. The brand new brand is the product of the last year. We have accumulated a lot of products to provide a new product to the core of the industry. For the last product, we have provided a real foundation.

Speaker Change: we are very optimistic about the future of light metal esthetic clinics

Speaker Change: as plans began franchising our channel clinics in the second half of this year in order to vapacate they expand our foot prained by replicating this proven standardized model in in the target statities

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Xing Jin: At the same time, we have used a new product to provide a new product to the core of the industry. We have provided a new product to the core of the industry.

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Xing Jin: Lastly, I will provide updates on our supply chain business, leveraging our extensive consumer behavior data and experience team. We are building full category up during medical aesthetic manufacturing capabilities for our broader ecosystem. With over-exacted operations, we have accumulated a wealth of consumer behavior data and user demand insights. Learning a solid foundation for the development and customization of our products. In addition, leveraging our extensive institutional coverage and strong customer marketing capabilities, we are able to rapidly strengthen the competitiveness of new products using our clinics to ensure a steady stream of sales. Our core team is composed of professionals from top domestic and international manufacturers, each possessing an average of five to ten years of industry experience and strong expertise in product selection and sales.

Speaker Change: last time i will prowide updates on our supply chainbbusiness

Speaker Change: leverage al tensive consumer behavior data and experien team we are building for category upstream medical esthetic manufacturing capitalab is for our broadary cosystem with over a dees of operations we have accumulated a real of consumer behavior data and user demounand insight

Speaker Change: laying a solid foundation for the for b development and customermization allow our products addation leveragage and our extensive institutional coverage and strong customer marketing capabilities we are able to rapid way strengthen they competitor ate new products is there our clinics

Speaker Change: to ensure a study swam of self

Speaker Change: our cotte is composed of professionals from top domest ic add international manufacturers each poscessing and average over five ten years the winindust rate expericed and strong expertise in product selection and sales

Xing Jin: In the second half of the year, we will continue to expand this team with a goal of reaching 100 members by the end of the year. Additionally, with seeing a continuous increase in shipments of true leafs, our newly launched non-surgical anti-aging ultrasound device, reflecting a strong potential to be a market heat. Meanwhile, the CREB-BLAD-BLAD-USA has maintained strong growth momentum, with second quarter shipments exceeding 40,000 units, up 76% quarter quarter and 130% year over year. From this dose of injectables grew by 65% quarter quarter and 170% year over year. As of the second quarter of 2024, we partnered with 118 institutions for this dose of injectables.

Speaker Change: in the second half of the year we will continue to expand these team with april of reaching one hundred members by theend of the year

Speaker Change: additionally weve see a continuous increase in shipments of truly our newly launched nonsurgical anti-aging ultra stout devves reflecting a strong potential to be a market heat

Operator: Second Quarter, 2024 Earnings Conference Call At this time, all participants are in a listen only mode.

Operator: Second Quarter, 2024 Earnings Conference Call At this time, all participants are in a listen only mode. After management, gives their prepared remarks, there will be a question to answer session. As a reminder, today's conference call is being recorded.

Speaker Change: meanwhile the cre drive a high teen strong grill momentum eight second quarter shipment threey forty thousandn age at seventy six percent quarter quarter and one hundred and thirty percent year over year revenue from tos of jeff grew by sixty five percent quarter quarter and were hundred and seventy percent year a year as the second second quarter of two thousand and twenty four with partners with some hundred and eighteen institutions for the ce inj

Operator: After management, gives their prepared remarks, there will be a question to answer session. As a reminder, today's conference call is being recorded.

Nick Zhao: Cost of R&B 155.1 million up 3.1 percent year-over-year primarily due to an increase in cost associated with sales of cosmetic products.

Operator: After management, gives their prepared remarks, there will be a question to answer session. As a reminder, today's conference call is being recorded.

Mona Qiao: I would now like to turn the conference over to your host for today's call, Ms. Mona Qiao.

Operator: I would now like to turn the conference over to your host for today's call, Ms. Mona Qiao.

Mona Qiao: Please go ahead, Ms. Mona.

Nick Zhao: Within cost of revenues, cost of services and others will R&B 101.9 million down 4.4 percent year-over-year primarily due to a decrease in cost associated with sodium prime.

Mona Qiao: Please go ahead, Ms. Mona.

Mona Qiao: Thank you, operator, and thank you, everyone, for joining So-Young Second Quarter, 2024 Earnings Conference Call.

Mona Qiao: Thank you, operator, and thank you, everyone, for joining So-Young Second Quarter, 2024 Earnings Conference Call. Joining me today on the call is Mr. Xing, our co-founder, Chairman, and CEO, and Mr. Nick Zhao, SAF O. Please note that the discussion today will contend for the low-instruments made under the September provisions of the U.S. Private Securities and the Litigation Reform Act of 1995. Four low-instruments are subject to risks and alternatives that may cause actual results to deformity purely from other current expectations.

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Mona Qiao: Potential risks and alternatives include, but are not limited to those outlined in our public finance with SEC, including our annual report on form 20F. So-Young does not undertake any obligation to update any for low-instruments except and required under effort below.

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Mona Qiao: Joining me today on the call is Mr. Xing, our co-founder, Chairman, and CEO, and Mr. Nick Zhao, SAF O.

Mona Qiao: And this time, I'd like to turn the call over to Mr. Xing. This is Earnings Call.

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Xing Jin: The LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO-LENCHO- This bias is self-recovery in conception as the macroeconomic challenge over the near term. We believe that the Chinese medical aesthetic market still has enormous potential in the long term. I think the trip begins with shuffling and enters a period of consolidation, leading brands like So Young, with a unique ecosystem and full category advantage, a real position to capitalize on the new opportunities, expand their market share and give potential, and solidify their position as market leaders. We believe our pop business is ideally suited to meet demands for non-standardized treatments, while our child-cranics can serve as a standardized treatment.

Mona Qiao: Please note that the discussion today will contend for the low-instruments made under the September provisions of the U.S.

Mona Qiao: Private Securities and the Litigation Reform Act of 1995.

Xing Jin: Our performance during the Second Quarter was so late. This total range of RMB 474 million, exceeding the top ends of our guidance, non-gap net profit, what RMB 22.2 million, up 43.1 percent year-over-year, showcasing our high-quality growth at the effectiveness of industry integration.

Speaker Change: despers they sof recovery in conception as the macroeconomic challenge over the near term we believe that the chinese medical thathe markets that still has normous potential in the long term as been the triree begins rehuuing as h a heories of consolidations leading like so young with a unique ecosystem and fore category advantage a will pepositions to capitalize our the you opportunities expands their market share and build potential and some the five be position as market leaders

Mona Qiao: Four low-instruments are subject to risks and alternatives that may cause actual results to deformity purely from other current expectations.

Nick Zhao: Cost of medical products, sold and maintenance services will R&B 53.2 million up 21.3 percent year-over-year primarily due to an increase in cost associated with sales of cosmetic products.

Mona Qiao: Four low-instruments are subject to risks and alternatives that may cause actual results to deformity purely from other current expectations.

Speaker Change: we believe our hub business is ideally thirty to meet demands for announced standardized treatments while our channel clinics can service standardizeded treatments

Xing Jin: Supporting both of these businesses with a steady stream of exclusive products is our upstream business, which will also benefit from to see and to be opportunities and guaranteed sales offered by both downstream businesses.

Speaker Change: the foting both of thesease businesses with a steady strain of exclusive products is our upstream business which will also benefit from tuessay and to be opportunities and guaranteed ceals offered by both downstreaming businesses

Mona Qiao: Potential risks and alternatives include, but are not limited to those outlined in our public finance with SEC, including our annual report on form 20F.

Xing Jin: [inaudible][inaudible] economic growth of the high Let's move on to So-Young friends. Currently, we have opened 14 clinics in front of commercial areas in eight core cities, including Beijing, Shanghai, Shenzhen, Hangzhou, Chengdu, Wuhan, Chongqing, and Changsha. All of these clinics are fully operational and performing in line with expectations. There are generally strong user base, the reputational strength of our blood and standardized fulfillment capabilities. The number of verified customers increased by 85% quarter to quarter, the repeat per transfer rate exceeded 60%.

Xing Jin: Combined, these three business segments create enormous synergies and form our air and triangle. We strongly believe that vertically integrating the industrial value chain will drive innovation, effectively ensure the quality of services, and open up new growth opportunities for the young going forward.

Speaker Change: comb this three business segments create normal synergies and form our air in triangle we strongly believe that vertically integrating the indust value channel will djori innoation ef fectively ensure the quality of services and open up new growth opportunities for the we on going forward

Speaker Change: sinceally clites are hardpeople does how you go to home in junes inda h

Nick Zhao: Let our sample leak take over now to go through the second quarter's financial results. After that, we'll open up for questions.

Speaker Change: less our s nix takeover now to go through the second quarter's financial results after that we'll open up for questions

Nick Zhao: Hello, this is Nick. Let's see reminded that our mask order here will be in R&B. This also returns to our earnings release for these nations of our competitive financial performances year-over-year basis. Total revenues during the quarter will R&B 407.4 million, down 1.1 percent year-over-year, exceeding the high end of our guidance on the back of a 22.6 percent year-over-year increase in sales of medical products and maintenance services. Information services and other revenues for R&B 279.2 million, down 6.6 percent year-over-year, primarily due to a decrease in the number of medical service providers subscribing to information services in our platform.

Speaker Change: although this is the next pol remind the that our amoun for year we' being our b this also represent the earnings release ternation of our emperive financial performances are year-over-year basis

Speaker Change: total revenues during the quarter r and b four hundred and a seven point four million down one point one percent of the over- year exceeding the high end of our guidance on the back of twenty to two point six percent year over-year increase in sales of medical products and many neative

Speaker Change: information services and other revenues qu the two hundred and seventy nine point two million down six point six percent over-year primarily due to a decrease in a number of medical service providers subscribing to information services in our platform

Nick Zhao: Resolution services brand new decreased 16.9 percent year-over-year to R&B 22.4 million, primarily due to policy changes for commission rates and subsidies. Cost of R&B 155.1 million, up 3.1 percent year-over-year, primarily due to an increase in cost associated with sales of cosmetic products. Within cost of revenues, cost of services and others will R&B 101.9 million, down 4.4 percent year-over-year, primarily due to a decrease in cost associated with sodium prime. Cost of medical products, sold and maintenance services will R&B 53.2 million, up 21.3 percent year-over-year, primarily due to an increase in cost associated with sales of cosmetic products.

Speaker Change: reservution so that its revenues decreased sixteen point nine percent to the over-year to rb twenty two point four millute primarily due to policy changes for commissioner rates and subsidies

Speaker Change: cost of revenues were r and b one hundred and fifty five point one million half three point one percent the over year primarily due to an increase in costs associated by the sales of cosmattic products

Speaker Change: within costs of revenues cost of services and others were r and b one hundred and one point nine million down four point four percent a year primarily due to a decreasing costs associated with so young prime

Speaker Change: cost of medical products sold and minim services will r m b fifty three point two million of twenty one point three percent yearoveryear primarily due to an increase in cost asssociated with the sales of cosmet cogmemattic products

Nick Zhao: Total operating expenses will R&B 245.6 million, down 13 percent year-over-year. Sales and marketing expenses will R&B 132.3 million, down 4.1 percent year-over-year, primarily due to a decrease in expenses associated with branding and user acquisition activities. DNA expenses will R&B 70.8 million, down 23.3 percent year-over-year, primarily due to decreases in share-based compensation expenses and the professional consulting fee. R&B 42.5 million, down 18.5 percent year-over-year, primarily attributable to improvement in study efficiency. Income tax benefits of R&B 2.6 million compared with income tax benefits of R&B 0.8 million in the same period of 2023. Next income attributable to So-Young was R&B 18.9 million compared with a net loss of R&B 2.5 million during the same period last year.

Speaker Change: total operating senses will randb two hundred and forty five point six minute down thirteen percent yearover year

Speaker Change: sales and the marketing expenses will r and b one hundred thirty two point three million down four point one percent y over-year primily due to a decrease expenses associated with the branding and use acquisition activities

Speaker Change: gn a expenses were r and b seventy point eight million down twenty three point three percent yearover-year primarily due to decreases in sharebased conversation centes and the professionalof consulting feet

Speaker Change: randd lenses will r and b forty-two point five minutes down eighteen point five percent a over-year primarily attributable to improvement in staff efficiency

Speaker Change: income tax benefits to r and b two point six minute compared with income tax benefit r and b euro upon eight minill in a same period of twothousand and twenty three

Speaker Change: left income attributable to so young was rand b eighteen point nine mining compared with a netloss of r b differentm during the same period last year

Nick Zhao: Now gap net income attributable to So-Young was R&B 22.2 million compared with R&B 15.5 million in the same period of 2023. Basic and a diluted earnings for ADS attributable to ordinary shareholders will R&B 0.818 and 0.18 respectively, compared with a basic and diluted losses for ADS attributable to ordinary shareholders of R&B 0.02 and 0.02 respectively during the same period of 2022, 2023. We have maintained our robust cash position with a cash and cash equivalent, restricted cash and term deposits, term deposits and short term investment totaling R&B 1.25 billion as of June 30, 2024. Moving to our outlook, given the relatively soft micro-conditions, especially with respect to questionally spending, for the third quarter of 2024, we expect total R&B to be between R&B 350 million and R&B 370 million.

Speaker Change: non-gaap net income attributeable to so young was r d twenty two point two meting compared with r and b fifteen point five minion in a period of two thousand and twenty three

Speaker Change: basic and dout earnings for ad s attributed two audinary shareholders will r and b yourro point eight one eight and a zero point one eight respectively compared with the basic and value losses of ads attributable to audin er shareholders of r and b zero point zero two and a zero point ero two acively during the same period is two thousand andtwentytwo thousand and three

Speaker Change: we hel maintained of the bus cash position with a cash and cash equivalent restricted cash and terms deposits term deposes and short term investment totalting r and b one point two five bill as of june thirty twothousand and twenty four

Speaker Change: moving to our outlook given the relatively soft to micro conditions especially with respect to questionally spending

Speaker Change: for the third quarter of tenthousand andtwentty four we expect total revenues to be between r and the three hundred and fifty million and r m b three hundred and seventey million

Nick Zhao: This outlook also takes into account the uncertainties of the pace of clinics opening and ramping up. As we are in the early stage of our clinic expansion and our business transformation, that being said, we are confident of strategic initiatives integrating the upstream and downstream of the aesthetic medical industry value chain will ideally position us for long-term growth. Their initiatives will enable us to capture a significantly larger share of the market and establish a solid foundation of profitability. As our clinics mature and market conditions stabilize, we expect our initial performance to gradually improve.

Speaker Change: this outlook also takes into account the uncertainties of the pace of a clinic opening and r ramping up

Speaker Change: as we are in the early stage of our clinic expansion and our business transformation

Speaker Change: that's being that we are confident of a strategic initiatives integrating the upstream and a downstream of the athetic medical industry valution ideal they position us for long-term growth

Speaker Change: their initiatives will enable us to capture a significant larger share of the market and establish a solid foundations of its visility

Speaker Change: as our clinics mature and market conditions stabilize we expect our financial post performance to gradually improve

Nick Zhao: This concludes our key remarks.

Operator: I will now turn over to the operator and open the call for QA. Operator, we are ready to two questions. Thank you.

Speaker Change: this includes our key remarks i will now turn over to the call to the operator and open the call for qeight

Operator: We will now begin the question and answer session. To ask a question, you may press star, then one on your touch-tone phone. If you are using a speaker phone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two.

Speaker Change: operator we are ready to two questions thank you we will we will now begin the question-and answer session

Speaker Change: to ask a question you may press re than one on your touch onephone phone

Speaker Change: if you're using a speaker phone please pick up your handset before pressing the keys and to draw your question please star than two and at this time will pause momentarily to a simbol roster

Operator: At this time, we will pause momentarily to a simple roster.

Mona Qiao: So-Young does not undertake any obligation to update any for low-instruments except and required under effort below.

Chloe Wei: The first question will come from Chloe Wei with CICC. Please go ahead. The second question will come from Chloe Wei with CICC. The third question will come from Chloe Wei with CICC.

Chloe Way: anythe first question will come from chloe way with c i c c please go ahead

Mona Qiao: And this time, I'd like to turn the call over to Mr. Xing.

Xing Jin: And this time, I'd like to turn the call over to Mr. Xing.

Speaker Change: you're ying go you say if you 't going art years you how sure are hard that you try you about here and ortman and allow how that you go to the you and sure you be doubtfor the show for now what you're going to when you got your t shoot

Mona Qiao: This is Earnings Call.

Xing Jin: This is Earnings Call.

Xing Jin: Our performance during the Second Quarter was so late.

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Xing Jin: And customer satisfaction improved to reach an impressive 4.97 out of five. We've also achieved solid operational efficiencies. For example, our Beijing clinic generated revenue of 6.2 million in June with pretext profits of 1.3 million and a profit margin of around 20%. The repeat per transfer rate hit 67%, higher than the industry average. Notably, both units area efficiency and monthly revenue per doctor outperformed traditional clinics.

Xing Jin: This total range of RMB 474 million, exceeding the top ends of our guidance, non-gap net profit, what RMB 22.2 million, up 43.1 percent year-over-year, showcasing our high-quality growth at the effectiveness of industry integration.

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Xing Jin: [inaudible][inaudible] economic growth of the high Let's move on to So-Young friends.

Speaker Change: if you sure you should that you go something ching the yity sound a woman no you your ong ship would you be so let me translate myself

Chloe Wei: Firstly, congratulations on the solar results. The revenue continued to exceed the high-end and really strong bottom line. And my question is about the over-or-trans. So entering the second half of this year, we have seen signs of slowdown in most consuming companies' guidance, say the online platforms, tourism, and et cetera. So I understand that it's mostly due to the macro-hatween. But can management share more color on the trends we have seen in July and August from the consumers and also from advertisers' side.

Speaker Change: firstly comecongratulations on the solidar results

Speaker Change: the revenue continue to exceed key high end and really strong bottomline and my question is about the over trend so entering the second half of this year we have seen signs so slowdown in most consuming company guidance

Xing Jin: The experience we have accumulated from these providers with valuable insights that we will apply to other new clinics to accelerate their growth. We are very optimistic about the future of light medical aesthetic clinics.

Speaker Change: say the online platforms tourisms and etc so i understand that mostly due to the macro hadatweenen but can management share more color on d trends we have seen in july and august from the consumers and also from advertiser sites

Xing Jin: As planned, we began franchising our chain of clinics in the second half of this year in order to rapidly expand our footprint by replicating this proven standardized model in the target state. In the last month, we have been able to provide a new product to the core of the industry. The brand new brand is the product of the last year. We have accumulated a lot of products to provide a new product to the core of the industry. For the last product, we have provided a real foundation.

Xing Jin: There are generally strong user base, the reputational strength of our blood and standardized fulfillment capabilities.

Chloe Wei: And looking into the second half, are there anything we would like to share with the market about how we plan to adapt to the new changes? Thanks.

Speaker Change: and looking into the second half of other there anything we would like to share with the market about how we plan to adapt to the new changes

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Xing Jin: At the same time, we have used[inaudible] Lastly, I will provide updates on our supply chain business, leveraging our extensive consumer behavior data and experience team. We are building full category up during medical aesthetic manufacturing capabilities for our broader ecosystem. With over-exacted operations, we have accumulated a wealth of consumer behavior data and user demand insights. Learning a solid foundation for the development and customization of our products. In addition, leveraging our extensive institutional coverage and strong customer marketing capabilities, we are able to rapidly strengthen the competitiveness of new products using our clinics to ensure a steady stream of sales. Our core team is composed of professionals from top domestic and international manufacturers, each possessing an average of five to ten years during the industry experience and strong expertise in product selection and sales.

Speaker Change: jo challengge you to w southwwhile curse shuring celate own men introuding to diaemissions h you'll not s it ton' up future i and throughue that jvers as you could

Xing Jin: The current state of the medical aspect in the trade isn't quite where we thought it would be at the beginning of the year. According to data from the MBS, the retail sales of consumer goods in China increased by 3.7% over year in the first six months of 2024. A disseleration compared to the first quarter of 2024 at the last quarter of 2023. Despite its weak consumer confidence and discretionary responding, the medical aspect of the market continues to grow and offers significant structural opportunities. The market share of light medical aesthetic services is expanding, driven by strong consumer demand for minimally invasive and convenient services.

Speaker Change: the curon states of the medical that take industry is qu we thought it would be at the beginning of the year according to data from the n b the rach our ce of consumer groues in china increased five report seven percent over the year in the first six monthes of two thousand andtwenty four a ceeration compared to the first quarter of two andtwenty four at the last quarter of twent twenty th rate despite out with consumer confidence and discretationary rate thiscreation spending the medical aspect ic market continues to grow and offer significant structural opportunities

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Speaker Change: vic share of light medical asthatative services aids expanding driven by strong consumer demand for minimalay in why st and compopinion services meanwhile the upstr supply chain is experiencing a surge growth fal by innovations and and supply chain optimizations that are propelling the industries over road advancement

Xing Jin: Meanwhile, the upstream supply chain is experiencing its surge in growth, filled by innovations and supply chain optimizations that are propelling the industry's overall advancement.

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Xing Jin: In the past few months, the industry has provided a two-year-old car. First of all, the demand for consumer goods is increasing rapidly. The industry has been developing large-scale research platforms. This is a more high-resolutionary project for the market. In addition, the growth and development of consumer goods in the industry is increasing. In fact, the investment of consumer goods is increasing, and the market is increasing in the future 4-5 years. The growth of consumer goods in the industry is increasing.

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Xing Jin: In the second half of the year, we will continue to expand this team with a goal of reaching 100 members by the end of the year. Additionally, with seeing a continuous increase in shipments of true leafs, our newly launched non-surgical anti-aging ultrasound device, reflecting a strong potential to be a market heat. Meanwhile, the CREB-BLAD-BLAD-USA has maintained strong growth momentum with second quarter shipments exceeding 40,000 units, up 76% quarter quarter and 130% year over year. From this dose of injectables grew by 65% quarter quarter and 170% year over year. As of the second quarter of 2024, we partnered with 118 institutions for this dose of injectables.

Speaker Change: deal exhibit or a china accical sinder channels quick

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Xing Jin: Our industry research highlights two key forecasts that will shape the future of industry. First, we expect to say the standardization of light money in the industry is increasing. This will lead to emerging large chain brands and enhance market norms and efficiency, resulting in a more mature sector. Second, over the next four to five years, we anticipate that leading chains will dominate the market, significantly accelerating the industry concentration. As top-rise capture larger share of markets, new opportunities will be created for investors and entrepreneurs to capitalize on this trade.

Speaker Change: our industry research highlight two k forecast that will shape the future of industry first we expect to say based standardization of light manco asthatt services gain momentum this will relate to emergence the large chamberbranze andin a house market norms and efficiency resulting a more mature sector

Xing Jin: The number of verified customers increased by 85% quarter to quarter, the repeat per transfer rate exceeded 60%.

Xing Jin: And customer satisfaction improved to reach an impressive 4.97 out of five.

Speaker Change: second over the next four to five years we anticipate that lading chance will dominant the market

Speaker Change: significantent ally accelerating the trade concentration as top rise capture larger sharehold market new opportunities will be created for you and entrepreneur to capitalize on this trade we plan to begin franchising our train of clinics in the in the second half of the year this we will not only contribute to the indust trace expansion but also position as for success in rapidly in will be marke

Xing Jin: We've also achieved solid operational efficiencies.

Xing Jin: We plan to begin franchising our chain of clinics in the second half of the year. This will not only contribute to the industry's expansion, but also position as for success in rapidly involving markets.

nelson chong: Next question. Welcome from Nelson Chong with City Bank. Please go ahead. Thank you for taking my question.

nelson chong: the next question will come from nelson chong with the city bank please go ahead

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nelson chong: now would if y e fast management for taking my questions my question is regarding the popposiness and wonder what would be the companiess outlook on the positioning of the popices in your future parpment and are there any new business strategy that can be shared quest thank you

Xing Jin: My question is regarding the pop business and wondering what would be the company's outlook on the positioning of the pop business in your future development, and are there any new business strategy that can be shared with us. Thank you.

Speaker Change: good how gu you relach you right

Xing Jin: [inaudible] This bias is self-recovery in conception as the macroeconomic challenge over the near term. We believe that the Chinese medical aesthetic market still has enormous potential in the long term.

Speaker Change: orwhe the poping would i go to the finan own the debatess sure that youose some bobuf

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Xing Jin: The pop business remains a vital component of our life and we are looking forward to seeing the future development of the pop business in our future development and we are looking forward to seeing the future development of the pop business in our future development and we are looking forward to seeing the future development of the pop business in our future development and we are looking forward to seeing the future development of the pop business in our future development and we are looking forward to seeing the future development of the pop business in our future development and we are looking forward to seeing the future development of the pop business in our future development and we are looking forward to seeing the future development of the pop business in our future development and we are looking forward to seeing the future development of the pop business in our future development and we are looking forward to seeing the future development of the pop business in our 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and we are looking forward to seeing the future development and we are looking forward to seeing the future development and we are looking forward to seeing the future development and we are looking forward to seeing the future development and we are looking forward to seeing the future development and we are looking forward to seeing the future development and we are looking forward to seeing the future development and we are looking forward to seeing the future development and we are looking forward to seeing the future development and we are looking forward to seeing the future development and we are looking forward to seeing the We are looking forward to seeing the future development and we are looking forward to seeing the future development and we are looking forward to seeing the future development and we are looking forward to seeing Going forward, our chain of clinics will create strong synergies with our pop business and its girls to scale by identifying now standardized treatments in demand by customers of our trail clinics and promoting select high-quality institutions and doctors from pop.

Xing Jin: I think the trip begins with shuffling and enters a period of consolidation, leading brands like So Young, with a unique ecosystem and full category advantage, a real position to capitalize on the new opportunities, expand their market share and give potential, and solidify their position as market leaders. We believe our pop business is ideally suited to meet demands for non-standardized treatments, while our child-cranics can serve as a standardized treatment. Supporting both of these businesses with a steady stream of exclusive products is our upstream business, which will also benefit from to see and to be opportunities and guaranteed sales offered by both downstream businesses.

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Speaker Change #102: the popbusiness remains a liital component of our ro growp strategy and we will continue to focus on its development as we've said before we believe that chinese and coesstatic market will become increasedingin a polarized

Speaker Change #103: consumer spending our standardized treatment is becoming more value-driven while spstandending our now standardized treatment is becoming more selective

Speaker Change #103: with consumers ing to pay a premium for the highest quality care

Speaker Change #103: to adapptt to this marketts landscape our strugy is two foult

Speaker Change #103: one for standardized treatment we leverage this rength and service quality of our cha clinics to make client demand

Xing Jin: Combined, these three business segments create enormous synergies and form our air and triangle. We strongly believe that vertically integrating the industrial value chain will drive innovation, effectively ensure the quality of services and open up new growth opportunities for the young going forward.

Speaker Change #104: and to for ann standardized treatments we will rely on diverse diverse ray of treatments that our poupitiness for servversy facilage to satisfy various needs

Speaker Change #105: do you pop you when in ch ch functioncial fget

Xing Jin: For example, our Beijing clinic generated revenue of 6.2 million in June with pretext profits of 1.3 million and a profit margin of around 20%.

Nick Zhao: Let our sample leak take over now to go through the second quarter's financial results. After that, we'll open up for questions.

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Xing Jin: The repeat per transfer rate hit 67%, higher than the industry average.

Nick Zhao: Hello, this is Nick. Let's see reminded that our mask order here will be in R&B. This also returns to our earnings release for these nations of our competitive financial performances year-over-year basis. Total revenues during the quarter will R&B 407.4 million down 1.1 percent year-over-year exceeding the high end of our guidance on the back of 22.6 percent year-over-year increase in sales of medical products and maintenance services. Information services and other revenues for R&B 279.2 million down 6.6 percent year-over-year primarily due to a decrease in the number of medical service providers subscribing to information services in our platform.

Xing Jin: Notably, both units area efficiency and monthly revenue per doctor outperformed traditional clinics.

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Speaker Change #111: we are mo inter a curative model just like co and sen by selecting high quality institutions l doctors and premium f q in each vertical we aim to simplify customer division making increase f k u transaction where you and ultimate strengthen our control over the supply side toenhoun our pricing power additionally for partners who strong technically lack operational expertise will offer comcompprehensive operational services management a form example this is must ter injector team which consists inject special le

Nick Zhao: Resolution services brand new decreased 16.9 percent year-over-year to R&B 22.4 million primarily due to policy changes for commission rates and subsidies. Cost of R&B 155.1 million up 3.1 percent year-over-year primarily due to an increase in cost associated with sales of cosmetic products. Within cost of revenues, cost of services and others will R&B 101.9 million down 4.4 percent year-over-year primarily due to a decrease in cost associated with sodium prime. Cost of medical products, sold and maintenance services will R&B 53.2 million up 21.3 percent year-over-year primarily due to an increase in cost associated with sales of cosmetic products.

Speaker Change #111: each bosting in impicive track recordds of ten thousand treatment we provide them with online operational support enabling them to focus if closeively to the very servarious to customers demands these servies has g bracid way and receives spirade positive feedback

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Nick Zhao: Total operating expenses will R&B 245.6 million down 13 percent year-over-year. Sales and marketing expenses will R&B 132.3 million down 4.1 percent year-over-year primarily due to a decrease in expenses associated with branding and user acquisition activities. DNA expenses will R&B 70.8 million down 23.3 percent year-over-year primarily due to decreases in share-based compensation expenses and the professional consulting fee. R&B 42.5 million down 18.5 percent year-over-year primarily attributable to improvement in study efficiency. Income Tax Benefits of R&B 2.6 million compared with income tax benefits of R&B 0.8 million in the same period of 2023.

Speaker Change #113: the twenty and publpose te and you go so go how the manand sureut that ho should you y child those in our hu

Speaker Change #114: going forward our channel clanicses will create strong synergies with our popiness as its growth to scale

Speaker Change #115: by identifying now standardized treatment in demand by customers abverage chaml clinics and promoting se high quality institutions and doctors ramp up we are maximizing both customers satisfaction and commercial value

Nick Zhao: DNA expenses will R&B 70.8 million down 23.3 percent year-over-year primarily due to decreases in share-based compensation expenses and the professional consulting fee.

Xing Jin: We are maximizing both customer satisfaction and commercial value.

Patrick Yi: Thank you. The next question will come from Patrick Yi with Citic Securities. Please go ahead. Hello, everyone. I am Patrick Yi. I am the head of the Department of Marketing and Marketing. Thank you for your opportunity. I still want to welcome the company's open business. One of the things we want to know is how to open the business of our trail clinics. Let me just agree to translate for myself. Thank you for taking my question. I am Patrick from Citic Securities. I am just wondering more questions about the clinical chain business.

Sisa: sisa thank you

Nick Zhao: R&B 42.5 million down 18.5 percent year-over-year primarily attributable to improvement in study efficiency.

patrick key: the next question will come from patrick key with stic securities please go ahead

Nick Zhao: Income Tax Benefits of R&B 2.6 million compared with income tax benefits of R&B 0.8 million in the same period of 2023.

Speaker Change #118: ion just i on the i mention just ment

Nick Zhao: Next income attributable to So-Young was R&B 18.9 million compared with a net loss of R&B 2.5 million during the same period last year.

Nick Zhao: Next income attributable to So-Young was R&B 18.9 million compared with a net loss of R&B 2.5 million during the same period last year. Now gap net income attributable to So-Young was R&B 22.2 million compared with R&B 15.5 million in the same period of 2023. Basic and a diluted earnings for ADS attributable to ordinary shareholders will R&B 0.818 and 0.18 respectively compared with a basic and diluted losses for ADS attributable to ordinary shareholders of R&B 0.02 and 0.02 respectively during the same period of 2022, 2023.

Nick Zhao: Now gap net income attributable to So-Young was R&B 22.2 million compared with R&B 15.5 million in the same period of 2023.

Nick Zhao: Basic and a diluted earnings for ADS attributable to ordinary shareholders will R&B 0.818 and 0.18 respectively compared with a basic and diluted losses for ADS attributable to ordinary shareholders of R&B 0.02 and 0.02 respectively during the same period of 2022, 2023.

patrick key: okay so let me just bre you transansport genernal translate for myself thank you for management and thank you for taking my question i'm patrick from cityic security

Speaker Change #119: so i'm just wondering more questsciions about a clinical chain benefits

Xing Jin: I am wondering what factors my constraint speed of the clinical chain expansion and what are the advantages that we all have in addressing these constraints, so that we can address these constraints more effectively than our competitors. And additionally, what are the current operating metrics for the chain of clinics?

Nick Zhao: We have maintained our robust cash position with a cash and cash equivalent restricted cash and term deposits, term deposits and short term investment totaling R&B 1.25 billion as of June 30, 2024. Moving to our outlook, given the relatively soft micro-conditions, especially with respect to questionally spending, for the third quarter of 2024, we expect total R&B to be between R&B 350 million and R&B 370 million. This outlook also takes into account the uncertainties of the pace of clinics opening and ramping up.

Speaker Change #120: so i'm wondering or factors my constraint speed of the clical chain expansion and what are the unique advantages so you have addressing these constraints so that we addressing concerains more effectively there our competitors

Speaker Change #120: and additionally what are the current of matrix for the chain of clinics and for example if our clics have wek evenither and what is your the future biness sense yes thank you very much

Nick Zhao: Moving to our outlook, given the relatively soft micro-conditions, especially with respect to questionally spending, for the third quarter of 2024, we expect total R&B to be between R&B 350 million and R&B 370 million. This outlook also takes into account the uncertainties of the pace of clinics opening and ramping up.

Xing Jin: And for example, if our clinics have reached the limit, and what is your future business tense? Yes, thank you very much. In general, factors such as site selection, furniture and renovation, license application, staff recruitment, marketing, and operational costs can impact how quickly new clinics can open up. Having said that, leads significantly improved new clinic opening efficiency by creating respective SOPs and implementing effective process management. This has helped us cast down the average time required to open up new clinics from about five months early to around three months now.

Speaker Change #121: are you how you lectyou

Speaker Change #122: min on colner you i kindid should do the she showre also also pid our reance of him kind resu inte h

Speaker Change #123: momentum home sces in also lo sho zjha this issuis equ to ploy so g or saw the little quali ta heo kid saudi chan change aed little cheap toldgenaniian children the willgo ers or your show down dollar which are a suary toyal

Xing Jin: The experience we have accumulated from these providers with valuable insights that we will apply to other new clinics to accelerate their growth.

Nick Zhao: As we are in the early stage of our clinic expansion and our business transformation, that being said, we are confident of strategic initiatives integrating the upstream and downstream of the aesthetic medical industry value chain will ideally position us for long-term growth. Their initiatives will enable us to capture a significant larger share of the market and establish a solid foundation of profitability.

Xing Jin: The experience we have accumulated from these providers with valuable insights that we will apply to other new clinics to accelerate their growth.

Speaker Change #124: in general factors suchas side selection furnishing and renovation license application staff staff recruitment marketing and operational cost

Speaker Change #125: can pack how quickly new clinics can open up

Speaker Change #126: having said that we significantially improved new clinic opening efficiency by creating respective slpeace and implementing effective process management this has helped us cut down the average time required to overap new clinic from about white mth early to around three mth now

Nick Zhao: As our clinics mature and market conditions stabilize, we expect our initial performance to gradually improve.

Nick Zhao: This concludes our key remarks.

Operator: This concludes our key remarks. I will now turn over to the operator and open the call for QA. Operator, we are ready to two questions. Thank you. We will now begin the question and answer session. To ask a question, you may press star than one on your touch tone phone. If you are using a speaker phone, please pick up your handset before pressing the keys. To withdraw your question, please press star than two. At this time, we will pause momentarily to a simple roster.

Operator: I will now turn over to the operator and open the call for QA.

Xing Jin: But we think that in the opening of the pandemic, the truth is that the speed of opening is lower than the speed. 1. Is there enough strength to strengthen or increase the pressure of power? 2. Is there enough strength to increase or increase the pressure of power? 3. Is there enough strength to strengthen the power of power? 4. Is there enough strength to strengthen or increase the pressure of power? 5. Is there enough strength to strengthen or increase the pressure of power? 6. Is there enough strength to strengthen or increase the pressure of power?

Operator: Operator, we are ready to two questions.

Speaker Change #127: or woman you rate i to grim water c en you not jer years on qida should do see such gi an issue it su for your to go chg whole econonomy

Operator: Thank you.

Operator: We will now begin the question and answer session.

Operator: To ask a question, you may press star than one on your touch tone phone. If you are using a speaker phone, please pick up your handset before pressing the keys.

Speaker Change #128: for get kindred of your addoor creation work are suphone on so out should go to the yield re her sheathai year

Operator: To withdraw your question, please press star than two.

Operator: At this time, we will pause momentarily to a simple roster.

Speaker Change #128: thank su for your touvo challenger goingila only so your charod only that ho b really the going get

Chloe Wei: The first question will come from Chloe Wei with CICC.

Chloe Wei: The first question will come from Chloe Wei with CICC. Please go ahead. [inaudible] So, firstly, congratulations on the solid results. The revenue continued to exceed the high end and really strong bottom line. And my question is about the overall trend. So entering the second half of this year, we have seen signs of slow down in most consuming company guidance, say the online platforms, tourism, and et cetera. Management share more color on the trends. We have seen in July and August from the consumers and also from advertisers side.

Speaker Change #128: sing phone your your children go chchildger gol jo ha gu you ho call on now indian the four children of children her ou get part you to su for your t childrenor to they actually change it hold dwhe show by they for your children go ch pres fortun

Chloe Wei: Please go ahead.

Xing Jin: However, we believe that the following factors are not truly determined how quickly we can scale our child clinics. 1. The ability to acquire customers. If we cannot guarantee that, we are simply included. 2. The ability to recruit a sufficient number of leading doctors and specialists. 3. The strength of our supply chain, which is a case of rain products at competitive price while keeping profit margins. 4. For sufficient capital, as the initial investment for each new clinic can cost millions of RMB. 5. The ability to obtain the necessary license. 5. The ability to obtain the necessary license for each new clinic can cost millions of RMB.

Speaker Change #129: however lately the following factors after a truly determine how quickly we can scalll our channel clinics

Chloe Wei: [inaudible] So, firstly, congratulations on the solid results.

Speaker Change #130: one the ability to acquire customers if we cannot guarantee that will simply incorud this

Speaker Change #131: to the ability to recruit its sufficient number of leading doctors and specialists three the strenth of our supply chain which is k offering products at competitive price well keeping profit margins

Speaker Change #131: for sufficient capital as the initial investment for each nucleclinic can cost mainance so rmv and five their ability to obtain the necessary license

Speaker Change #132: tryorry you some of anus jo say hocan from it see own places lunch hi ch how you push into the new ation urgent woman the don know who says on hoanily token goverlements focus from you your

Chloe Wei: The revenue continued to exceed the high end and really strong bottom line.

Chloe Wei: And my question is about the overall trend. So entering the second half of this year, we have seen signs of slow down in most consuming company guidance, say the online platforms, tourism, and et cetera.

Chloe Wei: And looking into the second half, are there anything we would like to share with the market about how we plan to adapt to the new changes. Thanks.

Xing Jin: 5. For sufficient capital, as the initial investment for each new clinic can cost millions of RMB. 5. For sufficient capital, as the initial investment for each new clinic can cost millions of RMB. 5. For sufficient capital, as the initial investment for each new clinic can cost millions of RMB. 5. For sufficient capital, as the initial investment for each new clinic can cost millions of RMB. 5. For sufficient capital, as the initial investment for each new clinic can cost millions of RMB. 5. For sufficient capital, as the initial investment for each new clinic can cost millions of RMB.

Speaker Change #133: i some himself found it

Speaker Change #133: some be you told so such a relility you go she outside is some children related to to e post a comore heration now that's your f encoury yourself or taoian famit woman homego in and the regin your a face ong each and your

Chloe Wei: Management share more color on the trends.

Chloe Wei: We have seen in July and August from the consumers and also from advertisers side.

Speaker Change #134: so questions timebeing children another two sort of moment that of many those jo children' decision to tal about your shop

Chloe Wei: And looking into the second half, are there anything we would like to share with the market about how we plan to adapt to the new changes.

Speaker Change #135: we are already posions to address esuial pect

Speaker Change #136: we have solid customer acquisition capabilities that leverage our from bload recommendation as the expensive user based already our our platform this is fothering house by our contact and online marketing capabilities our strong blide recommendnation scale however our business and compliance lead regulations

Chloe Wei: Thanks.

Speaker Change #136: give us a significistant of advantage when rereportating professionals

Speaker Change #136: when compared to and mediaosized institutions

Xing Jin: The current state of the medical aspect industry isn't quite where we thought it would be at the beginning of the year.

Xing Jin: The current state of the medical aspect industry isn't quite where we thought it would be at the beginning of the year. According to data from the MBS, the retail sales of consumer goods in China increased by 3.7% over year in the first six months of 2024. A declaration compared to the first quarter of 2024 and the last quarter of 2023. Despite its weak consumer confidence and discretionary responding, the medical aspect of the market continues to grow and offer significant structural opportunities.

Speaker Change #136: on the supply chain side our initiatives over over the past few years are already beginning to yield positive results

Xing Jin: In the last month, we have been able to provide a new product to the core of the industry.

Xing Jin: According to data from the MBS, the retail sales of consumer goods in China increased by 3.7% over year in the first six months of 2024.

Xing Jin: In the last month, we have been able to provide a new product to the core of the industry.

Speaker Change #136: as more of our products receiveve certification we expect our competitive advantage in this vertical to positively impact our financial performance warming in fully

Xing Jin: A declaration compared to the first quarter of 2024 and the last quarter of 2023.

Speaker Change #137: chai kwa chew tothy and gel joo ha balalifam woman tun wahch oah chany joh hom i go to union jo had i hiyiadjoin soong

Xing Jin: Despite its weak consumer confidence and discretionary responding, the medical aspect of the market continues to grow and offer significant structural opportunities.

Speaker Change #138: mayor rages appeal to high value the budget so you show your high walck to hcent so from i ownments or airput who se your care your

nelson chong: [inaudible] retail sales of the retail sales of the retail sales[inaudible] the retail sales of the retail sales of the retail sales of the retail sales of the retail sales of the retail sales of the retail sales The next question will come from Nelson Chong with Citibank, please go ahead.

Speaker Change #138: s cents will be on on a year or sen over the judutionial p

Xing Jin: In our next half-year, we will be opening up the Jiameng-Lian-Shu model, which will allow us to use the Zhe-Yu-Zi-Jing to open the shop. In the future, as procurement volume and use of our self-branded products increased, cost of across our chain of clinics will gradually fall, and profit margin will increase. We continue to open the next year, we will continue to open the store.

Speaker Change #139: ch i saw when j k the j years or more the young woman was you sales you you like i did so i p out ho you form it m going age school up p so how you like should have you found a p co those sound region now

Speaker Change #139: try to found woman ton world chang change over the counil your jil log will go to the ia

Speaker Change #140: by continuously housing our platform capabilities pri program p the year we are able to issu standardizedies management across mulicalple clinics in different regions we believe that the to standardized management li in the blackad and digitalization area whereare where we have a natural advanantage as internet company we have m capital to deployee in new clinics and we the franchise model that are launching in the second half of the year we also also allow us to to to exp without the need to v our own capital in terms of by applications as l from basiing and ha

Speaker Change #140: obtaining license in other regions of china is relatively simple and fbestast having already set up clinics nationalw we have accumulated experience in this area

Speaker Change #141: jes in end year jab qua momments i parker who conit the hers on achie solong coun assistant damand did

Speaker Change #142: in each man home union genions homeong ful her you can mo out which are beijing bary than the dealing your su year is being so greatate hunil shamond your sendamand de dealing you ssuammen d dealing put your single year

Speaker: has maintained strong growth momentum with second quarter shipments exceeding 40,000 units, up 76% quarter quarter and 130% year over year.

Speaker Change #143: sha some and they the turns out youro chi coan po ha j cindiaand car the chains some of your way more hoche

Speaker Change #143: you hope y your you yorder tonyon she tiyourizi serve your hope that out s cheat be pain polyyoung and day really chor will and su your fiveyour and socivyoung

Speaker: Then from this dose of injectables grew by 65% quarter quarter and 170% year over year.

Speaker: We will continue to open the store. [inaudible] As a result, consumer willingness and capability to spend may be constrained, increasing market uncertainty.

Speaker: As of the second quarter of 2024, we partnered with 118 institutions for the self-loving injectables.

Speaker Change #143: some would turns up power teni new year by year show roots have a little bit ial and

Speaker Change #144: mandde toy a street chli when you are e by sanallineand such chen nearly dado paag ash

Speaker Change #144: so year y gener woman shance cr g earlier your shallship feel way should have indthe end of cash turns up che on te jet

Speaker Change #144: it all woman found out tong ha nam so i y men two her homeber the person near power a ta fo shouldida che that be ljha anomally

Speaker Change #144: ho you here are most able pto hope she'is a how ti cyle grain motherthe coodct e g t or chy sh si mainthen years then the will beleachche some

Speaker Change #145: te some of the sure you're going to t but some requisites

Nick: [inaudible] Hello, this is Nick.

nelson chong: Thank you for taking my question.

Speaker Change #146: and so today's earnings call we have fourteen clinics lo commercial areas all of these clinics are for operational and performing in line with our expectations our basing clinic has been operational for fifteen months and has already become profitable recing is initial investment among the other clinics

Xing Jin: The brand new brand is the product of the last year.

nelson chong: My question is regarding the pop business, and wondering what would be the company's outlook on the positioning of the pop business in your future development, and are there any new business strategy that can be shared with us.

Xing Jin: The brand new brand is the product of the last year.

Xing Jin: My question is regarding the pop business, and wondering what would be the company's outlook on the positioning of the pop business in your future development, and are there any new business strategy that can be shared with us. Thank you, pop business in your future development, and we are looking forward to seeing the results of the pop business in your future development, and we are looking forward to seeing[inaudible] to seeing the results of the pop business in your future development[inaudible] Going forward, our chain of clinics will create strong synergies with our pop business and its girls to scale by identifying now standardized treatments in demand by customers of our trail clinics and promoting select high-quality institutions and doctors from pop. We are maximizing both customer satisfaction and commercial value.

Xing Jin: Thank you.

Speaker Change #146: three have been operational so five month with they remain ten for less than three m

Speaker Change #146: they are following a similar growth trajectory but we ll require a little more time to richbreak even

Speaker Change #146: to provide some water contex our clinics typically follow it will deffinine growth curve they generally go through its threeremarks trail period followed by nineths of accelerated growth

Maurities: maurities you were they reached after about twelve month of operations for example our basing clinic began for operations in may and officially opened in august last year

Speaker Change #148: since then when you have g to six point two main a due this year late pretax profits or one point three millam and a profit margin around twenty percent

Speaker Change #149: this outstanding performance validates the effectiveivenates however site selection clinic opening and operational structes providing viable insights that we will apply to other new clinics

Xing Jin: We have accumulated a lot of products to provide a new product to the core of the industry.

Xing Jin: Thank you, pop business in your future development, and we are looking forward to seeing the results of the pop business in your future development, and we are looking forward to seeing[inaudible] to seeing the results of the pop business in your future development[inaudible] Going forward, our chain of clinics will create strong synergies with our pop business and its girls to scale by identifying now standardized treatments in demand by customers of our trail clinics and promoting select high-quality institutions and doctors from pop.

Xing Jin: We have accumulated a lot of products to provide a new product to the core of the industry.

Speaker Change #149: to accelerate their goo

Speaker Change #150: by larveraging our medidial platform we have reduced overall costs while ensuring standardized services delivery allowing us to outfo outperform other institutions

Speaker Change #151: in the future as procurement volume and use our self-bradate products increase cost up across our trail craninicsx will gradually full and pro freth margin will increase

Speaker Change #152: cha group of phone

Speaker Change #153: sou woman geteissue i about house to i did

Xing Jin: We will continue to open the store, open the store, open the store, open the store, open the store, open the store, open the store, open the store, open the store, open the store, open the store, open the store, open the store, open the store, open the store, open the store, open the store, open the store. We continue to open the store, open the store, open the store, open the store, open the store, open the store, open the store, open the store, open the store, open the store, open the store, open the store, open the store.

Speaker Change #154: since are tent when they me could are opento

Speaker Change #155: youtie ear our sei channe moment isome kind so goingte helpouble art adopt un ancialment get

Speaker: Please be reminded that our mask 40 here will be in R&B.

Speaker: Please also refer to our earnings release for this nation of our comparative financial performance year-over-year basis.

Speaker Change #156: thiry seven year on in junk two i k out v most of the

Speaker Change #157: vir two human did challenge who we also patient sociated foryyeman did

Speaker: Total revenues during the quarter will R&B 407.4 million down 1.1% year-over-year exceeding the high end of our guidance on the back of 22.6% year-over-year increase in sales of medical products and maintenance services.

Speaker Change #158: to bo you you with a belgi ho foorship

Speaker Change #159: well maybe you may e the when show down j jz che conuom this is ontic feel goes i like sua so turn up her system on coant you

Speaker Change #160: look had fi business plans cente expanding our clinics across target ities we they focus on increasing the density of clinics within each state by the ends of two thousand and twenty flo we plan to open over twenty eight clinics in the second half ofover the year we will also launch our franchise model with external partners to elabor our self operated clinics as trainy centers and flagship clinics this will in about to standard izies and scale rid we we expect a significant year increase in the number of clinics

Speaker: Information services and other revenues for R&B 279.2 million down 6.6% year-over-year, primarily due to a decrease in a number of medical service providers, subscribing to information services in our platform.

Speaker: Resolution services for R&B 16.9% year-over-year to R&B 22.4 million, primarily due to policy changes for commission rates and subsidies.

Speaker: Cost of R&B 155.1 million up 3.1% year-over-year primarily due to an increase in cost associated with sales of cosmetic products.

Speaker Change #160: which will are not only strengthen our marketts position but also create new opportunities for revenue growth

Speaker Change #161: shisship thank you

Speaker: Within cost of revenues, cost of services and others will R&B 101.9 million down 4.4% year-over-year, primarily due to a decrease in cost associated with So-Young Prime.

joe han: the next question will come from joe han with jeffrey please go ahead

Xing Jin: open the store, open the store, open the store open the store, open the store, open the store, open the store open the store, open the store, open the store open the store, open the store, open the store open the store, open the store, open the store For example, the current generation of the current generation of the FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, F FESH, FESH, FESH FESH, FESH, FESH, FESH, FESH, FESH, FESH FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, F FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, FESH, F As a result, consumer willingness and capability to spend may be constrained, increasing market uncertainty.

Speaker Change #163: for turn i shall help shouldn't go to nego institu will be d cancon ficsu the tor

Speaker: Cost of medical products, sales and maintenance services will R&B 53.2 million up 21.3% year-over-year, primarily due to an increase in cost associated with sales of cosmetics products.

Speaker Change #164: we we want to a greater show older somete doars on the showm trans be the trtransficit to the mand you going to very show where generuous orth that being may or lobal hardship and under

Speaker Change #165: so letme just myself thank manageurements for taking my question a question is a highestary upstream seed de ficures is self other competitors and i could elaborate on the management s perspective regarding this jected ition and the business more for the extra sector this year thank you

Speaker: Total operating expenses will R&B 245.6 million down 13% year-over-year. Sales and marketing expenses will R&B 132.3 million down 4.1% year-over-year, primarily due to a decrease in expenses associated with branding and use acquisition activities.

Speaker Change #166: i how can in theachchildrenwent

Speaker Change #166: tobe ithard childho saw your chance out

Speaker: GNA expenses will R&B 70.8 million down 23.3% year-over-year, primarily due to decreases in share-based compensation expenses and the professional consulting fee.

Speaker Change #168: dida young f sometimes also almost he unmptions here choasonen without the somenting champion also sh alsolessay you bunquir childrental talk way woman i see are you own er they hope you value e gp you go ong of fu gu o

Xing Jin: For the last product, we have provided a real foundation.

Xing Jin: We are maximizing both customer satisfaction and commercial value.

Xing Jin: For the last product, we have provided a real foundation.

Xing Jin: At the same time, we have used[inaudible] Lastly, I will provide updates on our supply chain business, leveraging our extensive consumer behavior data and experience team.

Xing Jin: Thank you.

Xing Jin: At the same time, we have used[inaudible] Lastly, I will provide updates on our supply chain business, leveraging our extensive consumer behavior data and experience team.

Speaker: R&B expenses will R&B 42.5 million down 18.5% year-over-year, primarily due to improvements in staff efficiency.

Patrick Yi: The next question will come from Patrick Yi with Citic Securities.

Patrick Yi: The next question will come from Patrick Yi with Citic Securities. Please go ahead. Hello, everyone. I am Patrick Yi. I am the head of the department of marketing and marketing. Thank you for your opportunity. I still want to welcome the company's open business.

Speaker Change #169: now su seemimply sinceitimes in is really feelarly your ap crelated ues uion u the civil your to thetor there or de cheabouties who saw up since found the both

Patrick Yi: Please go ahead.

Xing Jin: We are building full category up during medical aesthetic manufacturing capabilities for our broader ecosystem.

Patrick Yi: Hello, everyone.

Xing Jin: We are building full category up during medical aesthetic manufacturing capabilities for our broader ecosystem.

Xing Jin: With over-exacted operations, we have accumulated a wealth of consumer behavior data and user demand insights.

Patrick Yi: I am Patrick Yi.

Xing Jin: With over-exacted operations, we have accumulated a wealth of consumer behavior data and user demand insights.

Xing Jin: Learning a solid foundation for the development and customization of our products.

Patrick Yi: I am the head of the department of marketing and marketing.

Xing Jin: Learning a solid foundation for the development and customization of our products.

Speaker: Income tax benefits will R&B 2.6 million compared with income tax benefits of R&B 0.8 million in the same period of 2023.

Patrick Yi: Thank you for your opportunity.

Patrick Yi: I still want to welcome the company's open business.

Speaker Change #170: church no lead are high all give vte ch

Xing Jin: In addition, leveraging our extensive institutional coverage and strong customer marketing capabilities, we are able to rapidly strengthen the competitiveness of new products using our clinics to ensure a steady stream of sales.

Patrick Yi: One of the things we want to know is how to open the business of our trail clinics.

Patrick Yi: One of the things we want to know is how to open the business of our trail clinics. Let me just agree to translate for myself. Thank you for taking my question. I am Patrick from Citic Securities. I am just wondering more questions about the clinical chain business.

Speaker: That income attributable to so-yang was R&B 18.9 million compared with a net loss of R&B 2.6 million during the same period last year.

Speaker Change #171: online traditional manufacturers that rely online year are d for to production to sales model we capitalize our unique ecosystem and fore category advantage to create synergies with our with our existing business life

Speaker: GNA income attributable to so-yang was R&B 22.2 million compared with R&B 15.5 million in the same period of 2023.

Speaker Change #172: they integrated approach allow us to amplify these the strength of our blidees reputation among customers and network coverage through institutional partners

Speaker: Basic and accelerated earnings for ADS attributable to ordinary shareholders will R&B 0.818 and 0.18 respectively compared with the basic and diluted losses of ADS attributable to ordinary shareholders of R&B 0.02 and 0.02 respectively during the same period of 2022, 2023.

Patrick Yi: Let me just agree to translate for myself.

Patrick Yi: Thank you for taking my question.

Speaker Change #173: as a result we can rap we cancome back to be market competitivevenized for new products and achieved customer targetings through our app as mediia matriicsx while using our clinics to ensure a study dreamme of self a capability that set us our part in industry

Xing Jin: Our core team is composed of professionals from top domestic and international manufacturers, each possessing an average of five to ten years during the industry experience and strong expertise in product selection and sales.

Patrick Yi: I am Patrick from Citic Securities.

Xing Jin: I am just wondering more questions about the clinical chain business.

Speaker: We have maintained our vast cash position with the cash and cash equivalent restricted cash and term deposits. Term deposits and short term investment totaling R&B 1.25 billion as of June 30, 2024.

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Xing Jin: And additionally, what are the current operating metrics for the chain of clinics?

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Speaker: Moving to our outlook, given the relatively soft micro-conditions, especially with respect to question-related spending, for the third quarter of 2024, we expect total RAM news to be between RMB 350 million and RMB 370 million. This outlook also takes into account the uncertainties of the pace of clinics opening and ramping up.

Speaker: This is reflected in our third quarter revenue guidance. As we transform our business beyond the properties, our revenue structure is undergoing a shift alongside, which is impacting growth margin levels. While our traditional information and resolution facilities continue to enjoy high growth margins, the increasing share of medical product sales, which have stable but lower margins, is affecting our overall margin profile. Furthermore, our chain of clinics, which is still in its early stages, has seen growth margin temporarily impacted by promotional activities.

Xing Jin: And for example, if our clinics have reached the limit, and what is your future business tense?

Xing Jin: Yes, thank you very much. In general, factors such as site selection, furniture and renovation, license application, staff recruitment, marketing and operational costs can impact how quickly new clinics can open up.

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Speaker: As we are in the early stage of our clinic expansion and our business transformation, that being said, we are confident of a strategic initiative, integrating the upstream and downstream of the aesthetic medical industry value chain.

Speaker: In the short term, we expect growth margins will continue to be impacted by the expansion of our chain of clinics and medical product sales. However, as our upstream supply chain capability strengthened and operation across our clinics mature, we will anticipate a corresponding improvement in growth margin.

Speaker Change #178: for example two lived our non surgical anti agent outtr sound de life generated tremendous pre orer volumes and so self volumes beyond expectations when a launch not long ago thisase performance showcase is potential to become a market hat and the capabilities of our team

Xing Jin: In general, factors such as site selection, furniture and renovation, license application, staff recruitment, marketing and operational costs can impact how quickly new clinics can open up. Having said that, leads significantly improved new clinic opening efficiency by creating respective SOPs and implementing effective process management. This has helped us cast down the average time required to open up new clinics from about five months early to around three months now. However, we think that in the opening of the pandemic, the truth is that the speed of opening is lower than a few seconds.

Speaker: We will add ideally position us for a long-term growth.

Speaker: Additionally, the introduction of our franchise model is expected to support growth margins through greater economies of scale, optimizing our profit structure even further.

Speaker: Their initiatives will enable us to capture a significant larger share of the market and establish a solid foundation of growth with ability.

Speaker: Thank you.

Xing Jin: Having said that, leads significantly improved new clinic opening efficiency by creating respective SOPs and implementing effective process management. This has helped us cast down the average time required to open up new clinics from about five months early to around three months now.

Speaker Change #179: similarly ourselves of the career bri us take continue to grow in addition we have been actively expanding our pipees with high growth potential our roadmap is robust with two new products ready for unch next year and three ount and three more in two thousand and twenty six

Speaker: As our clinics mature and market conditions stabilize, we expect our initial performance to gradually improve.

Speaker: This concludes our key remarks.

Speaker: This concludes our question and answer session as well as our conference call for today.

Speaker: I will now turn over to the call to the operator and open the call for QA.

Xing Jin: However, we think that in the opening of the pandemic, the truth is that the speed of opening is lower than a few seconds.

Speaker Change #179: all targeting popular segments of injectgo and energy-based devices we are confident we are confident these products will make significant contributions to revenue growp

Speaker: Operator, we are ready to two questions.

Speaker: Thank you.

Speaker: Thank you for attending today's presentation.

Speaker: We will now begin the question and answer session.

Speaker: You may now disconnect.

Xing Jin: One, whether there is enough strength to strengthen the science of science, or there is more pressure on the computer.

Xing Jin: One, whether there is enough strength to strengthen the science of science, or there is more pressure on the computer. Two, whether there is enough strength to increase the level of friendship and other experts. Three, whether there is enough strength to strengthen the science of science. [inaudible] of science of science of science of science of science science of science We have a clear understanding of this topic.

Speaker: To ask a question, you may press star than one on your touch tone phone. If you are using a speaker phone, please pick up your handset before pressing the keys.

Speaker: [inaudible] I don't know what to say.

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Xing Jin: Two, whether there is enough strength to increase the level of friendship and other experts.

Speaker: And to withdraw your question, please press star than two.

Xing Jin: Three, whether there is enough strength to strengthen the science of science.

Speaker: And at this time, we will pause momentarily to a simple roster.

Xing Jin: [inaudible] of science of science of science of science of science science of science We have a clear understanding of this topic.

Chloe Wei: And the first question will come from Chloe Wei with CICC.

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Chloe Wei: Please go ahead.

Speaker Change #182: larveraging our blood extensive consumer behavior data and if fam' timam we are building for category uping cut about case for broader ecosystem in the second half of the year we will continue to expand our team which is currently a composed of season exper from a leading domestic can in and international manufacturers we aim to build this team to a total of one hundred members by the end of the year

Speaker Change #182: chisha thank you the next question will come from ivleue with hightong securities please go ahead

ivleue: this some

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Chloe Wei: Let me translate myself.

Chloe Wei: Firstly, congratulations on the solid results.

Chloe Wei: The revenue continued to exceed the high end and really strong bottom line.

Chloe Wei: And my question is about the overall trend.

Chloe Wei: So entering the second half of this year, we have seen signs of slowdown in most consuming companies' guidance, say the online platforms, tourism, and et cetera.

Speaker Change #185: lo

Speaker Change #186: 's for questionition over the near term macro economic riskks such as slowing global growth and inflation rate presres continuue to weigh on consummer sentiment

Chloe Wei: So I understand that mostly due to the macro-hatween, but can management share more color on the trends we have seen in July and August from the consumers and also from advertisers side.

Speaker Change #186: as a result consumer willingness and capability to spend maybe constrained

Xing Jin: This is reflected in our third quarter revenue guidance. As we transform our business beyond the properties, our revenue structure is undergoing a shift alongside, which is impacting growth margin levels. While our traditional information and resolution facilities continue to enjoy high growth margins, the increasing share of medical product sales, which have stable but lower margins, is affecting our overall margin profile. Furthermore, our chain of clinics, which is still in its early stages, has seen growth margin temporarily impacted by promotional activities. In the short term, we expect growth margins will continue to be impacted by the expansion of our chain of clinics and medical product sales.

Speaker Change #187: increasing market uncertainty this is reflected the ourvers third quarter rvenue guidance

Chloe Wei: And looking into the second half, are there anything we would like to share with the market about how we plan to adapt to the new changes?

Speaker Change #188: as we transform our business beyond the poators

Speaker Change #188: our revenues structure is and under going a shift alongside which is impacting growth margin levels

Chloe Wei: Thanks.

Speaker: [inaudible] European Parliament of the European Parliament of the European Parliament[inaudible] Thank you.

Speaker Change #188: while our traditional information and resolution facilities continue to enjoy high growth margin the increasing share of medical produit sales which have stable by lower margins is affecting our o margin profile

Speaker Change #188: for ther more our chchain of a clinics which is still its earest stasages has seen growth growth margin temporarily impacted by pr omemotional activities

Speaker Change #188: in a shortterm we except growth margins will continue to be impacted by the expansion of our chainnel of clinics and medical product sales

Xing Jin: However, as our upstream supply chain capability strengthened and operation across our clinics mature, we will anticipate a corresponding improvement in growth margin. Additionally, the introduction of our franchise model is expected to support growth margins through greater economies of scale, optimizing our profit structure even further. Thank you.

Speaker Change #188: however as our upstream supply chain capability strengthen and operation across our clinics mature where we will anticipate a port bounding improvement in growrossth margin

Speaker Change #188: additionally the introduction of our franchise model is expected to support growth margin through ritater economies of a scale optimizing our profit structure even further thank you

Xing Jin: In the second half of the year, we will continue to expand this team with a goal of reaching 100 members by the end of the year.

Xing Jin: In the next half of the year, we will open up our alliance model, which will allow us to use the right funds to open up.

Xing Jin: In the second half of the year, we will continue to expand this team with a goal of reaching 100 members by the end of the year.

Xing Jin: In the next half of the year, we will open up our alliance model, which will allow us to use the right funds to open up. In the future, in the future, in addition to the United States and Shanghai, other local brands will be very difficult to solve. In this way, we will have more experience through the overall opening of the market. By continuously enhancing our media platform capabilities, the So-Young Plan Program over the past year, we are able to ensure standardized management across multiple clinics in different regions.

Operator: This concludes our question and answer session, as well as our conference call for today. Thank you for attending today's presentation.

Speaker Change #189: this concludes our question-and-answer session as well as our conference call for today thank you for attending today's presentation you may now disconnect

Xing Jin: Additionally, with seeing a continuous increase in shipments of true leafs, our newly launched non-surgical anti-aging ultrasound device, reflecting a strong potential to be a market heat.

Xing Jin: In the future, in the future, in addition to the United States and Shanghai, other local brands will be very difficult to solve.

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Xing Jin: Meanwhile, the CREB-BLAD-BLAD-USA has maintained strong growth momentum with second quarter shipments exceeding 40,000 units, up 76% quarter quarter and 130% year over year.

Xing Jin: In this way, we will have more experience through the overall opening of the market.

Xing Jin: By continuously enhancing our media platform capabilities, the So-Young Plan Program over the past year, we are able to ensure standardized management across multiple clinics in different regions. We believe that the key to standardized management lies in the breadth and depth of digitalization.

Xing Jin: Meanwhile, the CREB-BLAD-BLAD-USA has maintained strong growth momentum with second quarter shipments exceeding 40,000 units, up 76% quarter quarter and 130% year over year.

Xing Jin: We believe that the key to standardized management lies in the breadth and depth of digitalization. An area where we have a natural advantage as an internet company. We have ample capital to deploy in new clinics as well. The franchise model that are launching in the second half of the year will also allow us to expand without the need to invest our own capital. In terms of license applications, aside from Beijing and Shanghai, obtaining license in other regions of China is relatively simple and fast.

Xing Jin: An area where we have a natural advantage as an internet company.

Xing Jin: We have ample capital to deploy in new clinics as well.

Xing Jin: The franchise model that are launching in the second half of the year will also allow us to expand without the need to invest our own capital.

Xing Jin: In terms of license applications, aside from Beijing and Shanghai, obtaining license in other regions of China is relatively simple and fast.

Xing Jin: Having already set up clinics nationwide, we have accumulated experience in this area.

Xing Jin: Having already set up clinics nationwide, we have accumulated experience in this area. In the past 15 months, Beijing has protected the power of electronic devices. In the past 15 months, other stores have 3 stores of electronic devices in 5 months, and 3 stores of electronic devices in 10 months. Now, the growth of the electronic devices has increased rapidly. In the past 3 months, the new store has opened. In the past 9 months, the growth of the new store has increased.

Xing Jin: In the past 15 months, Beijing has protected the power of electronic devices.

Xing Jin: In the past 15 months, other stores have 3 stores of electronic devices in 5 months, and 3 stores of electronic devices in 10 months.

Xing Jin: From this dose of injectables grew by 65% quarter quarter and 170% year over year.

Xing Jin: Now, the growth of the electronic devices has increased rapidly.

Xing Jin: From this dose of injectables grew by 65% quarter quarter and 170% year over year.

Xing Jin: In the past 3 months, the new store has opened.

Xing Jin: In the past 9 months, the growth of the new store has increased.

Xing Jin: [inaudible][inaudible] We will continue to open the store.

Xing Jin: [inaudible] In the past 12 months, the growth of the new store has increased rapidly. [inaudible] We will continue to open the store. We will continue to open the store. [inaudible] We will continue to open the store. We will continue to open the store.

Speaker: Thank you.

nelson chong: Next question, welcome from Nelson Chong with Citibank, please go ahead.

nelson chong: I would like to ask a few questions.

Xing Jin: We will continue to open the store.

Xing Jin: [inaudible] We will continue to open the store.

nelson chong: Thank you, would like to ask a few questions, and I would like to ask a few questions, and I would like to ask a few questions,[inaudible] Going forward, our chain of clinics will create strong synergies with our pop business and its growth to scale by identifying now standardized treatment in demand by customers of our chain of clinics and promoting select high quality institutions and doctors from pop.

nelson chong: We are maximizing both customer satisfaction and commercial value.

Xing Jin: We will continue to open the store.

nelson chong: Thank you.

Patrick: The next question will come from Patrick, he securities.

Xing Jin: As of the second quarter of 2024, we partnered with 118 institutions for this dose of injectables.

Xing Jin: [inaudible][inaudible] As a result, consumer willingness and capability to spend may be constrained, increasing market uncertainty.

Xing Jin: As of the second quarter of 2024, we partnered with 118 institutions for this dose of injectables.

Xing Jin: [inaudible][inaudible] As a result, consumer willingness and capability to spend may be constrained, increasing market uncertainty. This is reflected in our third quarter revenue guidance. As we transform our business beyond the properties, our revenue structure is undergoing a shift alongside, which is impacting growth margin levels. While our traditional information and resolution facilities continue to enjoy high growth margins, the increasing share of medical product sales, which have stable but lower margins, is affecting our overall margin profile.

Patrick: Please go ahead.

Patrick: Let me just briefly translate for myself.

Patrick: Thank you for the question about the clinical chain business.

Speaker: I am wondering what factors my constraint speed of the clinical chain expansion and what are the advantages that so you have been addressing these constraints so that we can address these constraints more effectively than our competitors and additionally what are the current operating metrics for the chain of clinics and for example if our clinics have reached reach even and what is your future business sense.

Speaker: Yeah, thank you very much.

Speaker: In general factors such as size selection, fornician and renovation, license application, staff recruitment, marketing and operational costs can impact how quickly new clinics can open up. Having said that leads significantly improved new clinic opening efficiency by creating respective SOPs and implementing effective process management.

Speaker: This has helped us cast down the average time required to open up new clinics from about five months early to around three months now.

Speaker: However, we think that in the opening of the pandemic, the real impact of the opening speed is a few factors.

Speaker: One, whether there is enough strength to strengthen the science of science, or there is more pressure on the computer.

Speaker: Two, whether there is enough strength to strengthen the science of science and other experts.

Speaker: Three, whether there is enough strength to strengthen the science of science.

Speaker: [inaudible] However, we believe the following factors are truly determining how quickly we can scale our children's clinics.

Speaker: One, the ability to acquire customers.

Xing Jin: [inaudible] This bias is self-recovery in conception as the macroeconomic challenge over the near term.

Xing Jin: We believe that the Chinese medical aesthetic market still has enormous potential in the long term.

Xing Jin: We believe our pop business is ideally suited to meet demands for non-standardized treatments, while our child-cranics can serve as a standardized treatment.

Xing Jin: Furthermore, our chain of clinics, which is still in its early stages, has seen growth margin temporarily impacted by promotional activities. In the short term, we expect growth margins will continue to be impacted by the expansion of our chain of clinics and medical product sales. However, as our upstream supply chain capability strengthened and operation across our clinics mature, we will anticipate a corresponding improvement in growth margin. Additionally, the introduction of our franchise model is expected to support growth margins through greater economies of scale optimizing our profit structure even further.

Xing Jin: In the short term, we expect growth margins will continue to be impacted by the expansion of our chain of clinics and medical product sales. However, as our upstream supply chain capability strengthened and operation across our clinics mature, we will anticipate a corresponding improvement in growth margin. Additionally, the introduction of our franchise model is expected to support growth margins through greater economies of scale optimizing our profit structure even further.

Xing Jin: Combined, these three business segments create enormous synergies and form our air and triangle.

Xing Jin: Thank you.

Xing Jin: We strongly believe that vertically integrating the industrial value chain will drive innovation, effectively ensure the quality of services and open up new growth opportunities for the young going forward.

Nick Zhao: Let our sample leak take over now to go through the second quarter's financial results.

Operator: This concludes our question and answer session, as well as our conference call for today.

Operator: Thank you. This concludes our question and answer session, as well as our conference call for today. Thank you for attending today's presentation. You may now disconnect. Thank you for your time. [inaudible]

Nick Zhao: After that, we'll open up for questions.

Operator: Thank you for attending today's presentation.

Nick Zhao: After that, we'll open up for questions.

Operator: You may now disconnect.

Nick Zhao: Hello, this is Nick.

Operator: Thank you for your time.

Nick Zhao: Let's see reminded that our mask order here will be in R&B.

Operator: [inaudible]

Nick Zhao: This also returns to our earnings release for these nations of our competitive financial performances year-over-year basis.

Nick Zhao: Total revenues during the quarter will R&B 407.4 million down 1.1 percent year-over-year exceeding the high end of our guidance on the back of 22.6 percent year-over-year increase in sales of medical products and maintenance services.

Nick Zhao: Information services and other revenues for R&B 279.2 million down 6.6 percent year-over-year primarily due to a decrease in the number of medical service providers subscribing to information services in our platform.

Nick Zhao: Resolution services brand new decreased 16.9 percent year-over-year to R&B 22.4 million primarily due to policy changes for commission rates and subsidies.