Q3 2024 So-Young International Inc Earnings Call
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To be continued
Speaker Change: Ladies and gentlemen, thank you for standing by for So Young's third quarter 2024 earnings conference call.
At this time, all participants are in the listen-only mode.
Speaker Change: After management give their prepared remarks, there will be a question and answer session.
As a reminder, today's conference call is being recorded.
Speaker Change: I would now like to turn the meeting over to your host for today's call, Ms. Mona Qiao. Please proceed, Mona.
Mona Qiao: Thank you operator and thank you everyone for joining SOYAM's third quarter 2024 earnings conference call. Joining me today on the call is Mr. Xing Jin, our co-founder, chairman and CEO, and Mr. Nick Zhao, CFO. Please note that the discussion today will contain four looking statements made under the safe habit provisions of the US private securities and the litigation reform act of 1995.
Mona Qiao: Four looking statements are subject to risks and alternatives that may cause actual results to differ materially from our current expectations
Mona Qiao: Potential risks and authorities include but are not limited to those outlining our public filings with SEC, including our annual report on Form 20-F. SOEON does not undertake any obligation to update any forward-looking statements.
Mona Qiao: Acceptance required under applicable law. At this time, I'd like to turn the call over to Mr. Xing Jin.
大家好,欢迎参加今天的彩报电话会议。
Speaker Change: In the third quarter of 2024, our business continued to develop steadily and gained a total revenue of 3.72 billion RMB, which exceeded the revenue line again.
Speaker Change: The net profit that belongs to XinYang is 20.35 million RMB and the growth rate is 11.2% The net profit that belongs to XinYang is 22.25 million RMB
Speaker Change: has grown by 133.1%. These achievements are due to our continuous improvement in the layout of EMEI's entire industry chain.
Speaker Change: Our business continued to develop robustly during the first quarter, with total revenue reaching RMB 332 million, once again surpassing the upper end of our guidance range. Net income attributable to Zhou Yang was RMB 20.3 million, up 11.2% year-over-year, while non-GAAP net income attributable to Zhou Yang came in at RMB 22 million.
Speaker Change: 22.2 million, up 133.1% year-over-year, demonstrating the effectiveness of our continued investment across the industry value chain.
Speaker Change: Throughout the third quarter, we have made major breakthroughs in our joint business.
Speaker Change: In the third quarter, the company's net income increased by 67%.
Speaker Change: Financial cash flow transaction In this, Shijia achieved the profitability of the store The chain business is gradually becoming the core growth engine of the group
此外,尽管消费趋缓,上游业务依然保持稳健态势
Speaker Change: Our business structure continues to optimize. The POP business provides a solid foundation for the company's rapid development of new business, and has a good co-operative effect with the chain and online business, providing us with important support in the comprehensive layout of the E-Mei market.
Speaker Change: In the third quarter, we made significant progress in our chain of clinics, expanding the number of stores to 17 currently from 8 last quarter as we penetrated into more cities.
Speaker Change: All of our clinics are located in prime commercial areas, which further strengthens our market coverage and competitiveness.
Speaker Change: This business is gradually becoming the key growth driver for us.
Speaker Change: Its revenue grew by 67% quarter over quarter, with goods margins improving significantly.
Speaker Change: Notably, all eight of the new clinics opened during the quarter are generating positive operating cash flow, and four are already profitable at the store level.
Speaker Change: creating strong synergies with our chain of clinics and upstream businesses. This provides critical support for our development in the medical aesthetic market.
Speaker Change: In terms of industry development, the development of the China-U.S. market is as expected, showing a trend of two-phase differentiation. On the one hand, mass consumer demand is gradually released, they are more inclined to choose high cost-effective and convenient projects.
Speaker Change: This trend promotes the upgrade of medical technology and product diversification.
Speaker Change: On the other hand, middle- and high-income groups with a certain consumption ability are still willing to pay a high price for high-quality and personalized services while pursuing cost-effectiveness. This will encourage the US market to develop in the direction of higher quality and high standards.
I want to selectively review these career candidates.
Speaker Change: to further strengthen the whole-industry chain layout, especially in the upstream and joint-operation areas.
Speaker Change: In the third quarter, our new business sector has grown rapidly. Among them, the sales and maintenance services of E-Mei products have reached 89.27 million yuan, which is 18.7% higher than before.
during the iteration of medical aesthetic technologies and project diversification.
Speaker Change: On the other hand, middle to high-income consumers remain willing to pay a premium for high-quality and personalized services, while seeking cost-effectiveness, pushing the medical aesthetic market towards higher quality and standards. We are closely following these industry trends as accelerating and deepening our end-to-end integrations across the industry value chain, especially in our upstream and clinic businesses.
Speaker Change: During the quarter, our new business segment continues to grow rapidly, with revenue from the sales of medical products and maternity services reaching RMB $89.3 million, up 18.7% year-over-year.
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下面具体分享一下我们的三季度业务发展情况
Speaker Change: In terms of joint business, we have made positive progress. So far, we have opened 17 stores in nine core cities, including Beijing, Shanghai, Guangzhou, Shenzhen, Huangzhou, Chengdu, Wuhan, Chongqing and Changsha.
Speaker Change: have all invested in the operation. Among them, 14 stores in September achieved a positive monthly operating cash flow. This reflects the stability of the store operation and also shows the strong influence of XinYang brand and the continuous operation ability brought by platform user base.
Speaker Change: In the third quarter, the customer flow rate remained above 60%.
Speaker Change: After research, the overall customer satisfaction of the chain store is 4.98, 5 points full score
Speaker Change: which reflects XinYang's business philosophy based on customer service and high-efficiency service appointment ability.
Speaker Change: In addition, our average customer cost is significantly lower than the average level in the industry.
fully reflects the belief in market promotion.
Speaker Change: organizational ability, and operational efficiency. We have expanded the number of users, covering about 900,000 users, which is a solid foundation for future business expansion.
Speaker Change: Now let me give you a closer look at our Q3 business performance. We have made big progress with our chain of clinics business, with 17 clinics fully operational across 9 core cities as of today, including Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou, Chengdu, Wuhan, Chongqing, and Changsha, among them 14 record positive monthly operating flow in September. These domains trace our sustainable operational capabilities, supported by our user base and strong brand influence. This is the Q3 business performance. We have made big progress with our chain of clinics business, with 17 clinics fully operational across 9 core cities as of today, including Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou, Chongqing, and Changsha, among them 14 record positive monthly operating flow in September. These domains trace our sustainable operational capabilities, supported by our user base and
to share a few K-metrics.
Speaker Change: Our customer retention rate was maintained at 60%. The overall customer satisfaction at our clinics reached 4.98 out of 5, according to our data, reflecting our customer-centric operational philosophy and efficient service fulfillment capabilities.
Speaker Change: Moreover, average customer acquisition costs are now significantly lower than the industry average, highlighting the competitive advantages in marketing and operational efficiency.
Speaker Change: Our private domain user base continues to expand, now at around 900,000 users, which provides a solid foundation for us to expand in the future.
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具体来看,联手业务中几个特色项目实现了强劲增长,表现亮眼。
Speaker Change: Especially in the high-end business sector, the Wanzhi Master Group's project volume is significant. In the third quarter, the income return increased by 104%. The customer price is close to RMB50,000. The user rating and other indicators are all excellent. This proves that our strict strategy of selecting and registering doctors has been highly recognized by consumers in the United States.
Speaker Change: At the same time, we are also actively expanding our cooperation with the mainstream traffic platforms. At present, the XinYang chain stores have entered channels such as Meituan and TianMao, and the market coverage range has been further expanded. In addition, the XinYang Youth Clinic project is a breakthrough point in our vertical integration strategy.
展现出显著的成本优势
以超生项目为例,我们通过加强市域运营,减少营销成本,以及使用自由品牌设备降低耗材成本,带来了明显的价格优势。上线首月,该项目线上订单量已超过7000单。
Speaker Change: In the future, we plan to further upgrade the layout of the five core cities in Beijing, Shanghai, Guangzhou, Shenzhen and Hangzhou. At the same time, we will speed up the promotion of Jiameng and quickly copy our successful standardized chain operating model to more cities to further expand the business map of the chain.
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Speaker Change: Within our chain of clinics businesses, a number of key initiatives have delivered robust growth that I'd like to highlight.
Speaker Change: For example, our high-end master injector team project achieved 104% sequential revenue increase at average customer spends of nearly 50,000. Its customer satisfaction rates were also exceptional, proving that our tactic of carefully selecting injection doctors is highly appreciated by consumers.
Speaker Change: for our Ultrasound program, leveraging private domain operations to reduce marketing costs and preparatory branded devices to lower consumable costs.
achieved remarkable results.
Speaker Change: Its online orders exceeded 7,000 in the first month immediately after its launch.
Speaker Change: We plan to further expand our presence in five core cities, including Beijing, Shanghai, Guangzhou, Shenzhen, and Hangzhou, and accelerate the rollout of franchises in order to quickly replicate our successful standardized chain operations model to more cities, further scaling up our business.
Speaker Change: In terms of upstream business, we will continue to promote a comprehensive and eco-friendly strategic layout for the US industrial chain.
Speaker Change: In the third quarter, we have made substantial progress. In the third quarter, we have more than 970 agents and clients.
Speaker Change: In terms of products, Elasti has sold 430,000 units in the third quarter, which is a 22% increase compared to the previous year. The revenue from upstream is also a 21% increase compared to the previous year. This further consolidates our competitive advantage in the upstream sector of EMEA and verifies the strong demand for our products in the market.
Speaker Change: In addition, we have reached a strategic cooperation with Langzhi Group on upstream products.
Speaker Change: The two sides will jointly build the Nature Oriental Green Foam in just two months to cover 90% of the immigration institutions under the Langzhi Group.
Speaker Change: fully demonstrate the high-quality and excellent execution of the two sides in the market expansion and product application.
Speaker Change: We have also made great progress in our upstream business by building up four category upstream medical aesthetic manufacturing capabilities for our broader ecosystem. As of the end of this third quarter, we partnered with more than 917 institutions for this dose of injectables.
Our injectable product, Elastase, so it's 20...
Speaker Change: 22% year-over-year increase in shipments, reaching 43,000 units during the quarter. Sales of injectables grew by 21% year-over-year, further consolidating our competitive advantage in the upstream sector and underscoring the strong demand of our products.
Speaker Change: showcasing the strong synergies our business creates and leading product promotion capabilities.
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Speaker Change: In the future, we will focus more on improving the experience of medical institutions and consumers.
Speaker Change: At the institutional level, our platform through the precise advertising and traffic allocation strategy helps EMEA to achieve a steady growth in order to convert orders and gain the high level of recognition of EMEA which fully proves the effectiveness of our advertising and market promotion on the platform
面对C端消费者,我们致力于为E美消费者提供高性价比的商品,与此同时,9月GMV环比8月增长超过16%,
Speaker Change: In the 3rd quarter, the total amount of electricity and electricity bills increased by 22.9% and the high-end PUF was built In addition, it benefits from the improvement of commissioning reform and product optimization and the increase in the number of commercial aircraft in our station and the conversion rate and other indicators
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Speaker Change: Our traditional pot business is strong support to both our chain of clinics and upstream businesses. Moving forward, we will focus more on improving the experience for both medical aesthetic institutions and consumers.
Speaker Change: Our platform continues to help medical and aesthetic institutions improve order, conversion, and self-targeted advertising and traffic allocation. This has been highly recognized by institutions, demonstrating the effectiveness of advertising placements on our platform.
For consumers, we are committed to providing cost-effective products.
Speaker Change: In September, JMWay, facilitated by our platform, grew by over 60% from the previous month. The per capita installed JTWay for the third quarter increased 22.9% year-over-year, reflecting the initial success of our upmarket shifting tactics in POP.
Speaker Change: We also enhance our sales leads and conversion rates through commission rate reform and product optimization.
Speaker Change: Up to now, we have set up 17 XinYang Youth Clinics to carefully polish organizational culture and neutrality to gradually form a scale effect and bring cost advantage so that consumers can enjoy a safe, convenient, high-quality and extremely cost-effective service
Speaker Change: In the future, the strategic focus of XinYang is very clear It is to form a multi-dimensional capability advantage through vertical integration from top to bottom to become the most trusted medical industry group in the United States to make 100 million Chinese people easy to treat
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Speaker Change: Our pot business has served the medical aesthetic industry for 11 years, establishing a strong brand presence and becoming top of mind for consumers.
Speaker Change: Over the past three years, we have invested over RMB 1 billion in building our upstream supply chain and expanding our product offerings.
Speaker Change: We have now opened 17 clinics leveraging our organizational culture and central platform capabilities, gradually growing it in scale to deepen cost advantage and ensure consumers enjoy reliable, convenient, high quality and high cost effective services.
Looking forward, our focus is clear.
Speaker Change: Through upstream, middle and downstream integration, we aim to create multidimensional competitive advantage and become the most trusted medical aesthetic and healthcare service provider, fulfilling our mission of making medical aesthetic accessible for 100 million Chinese people.
现在请Nick来介绍三季度的财务结果,之后我们将进行问答环节
Speaker Change: Now let's hand over to our staff, Nick, who will go through the financial results. After that, we will open for questions.
Speaker Change: Hello, this is Nick. Please be reminded that all amounts quoted here will be RMB. Please also refer to our earnings release for detailed information about our comparative financial performance year-over-year basis.
Total revenue during the quarter will RMB 371.8 million.
down 3.5% year-over-year
Speaker Change: exceeding the high end of our guidance, with the sales of medical products and maintenance services growing by an impressive 18.7% year-over-year, primarily due to an increase in the order volume for aesthetic injectables and medical equipment.
Speaker Change: Information services and other revenues were RMB 263.0 million down 8% year-over-year, primarily due to a decrease in the number of medical service providers subscribing to information services on our platform.
Speaker Change: Reservation services revenues decreased 18.9% year-over-year to RMB 19.6 million, primarily due to a decrease in consumer spending through our platform.
Speaker Change: Cost of revenues for RMB 142.2 million, down 0.3% year-over-year, primarily due to a decrease in the cost of services associated with the information service.
Speaker Change: Within cost of revenues, cost of services and others will RMB 98.6 million, down 4.7% year-over-year, primarily due to a decrease in the cost of services associated with information services.
Speaker Change: Cost of medical products sold and maintenance services were RMB 43.5 million, up 11.3% year-over-year, primarily due to an increase in the costs associated with the sales of aesthetic injectables.
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Speaker Change: Total operating expenses for RMB 225 million, down 8.1% year-over-year. Sales and marketing expenses for RMB 114.9 million.
Speaker Change: Some 20.1% year-over-year mainly due to a decrease in expenses associated with branding and user acquisition activities.
Speaker Change: RMD expenses for RMB 40.2 million, down 20.6% year-over-year, primarily attributable to improvements in staff efficiency.
Speaker Change: Income Tax Expenses for RMB 2.1 million compared with Income Tax Benefit of RMB 2.2 million in the same period of 2023.
Speaker Change: Net income attributable to Zhou Yang was RMB 20.3 million compared with a net income of RMB 18.3 million during the same period last year.
Speaker Change: Non-GAAP net income attributable to Zhou Yang was RMB 22.2 million compared with RMB 9.5 million in the same period of 2023.
Speaker Change: Basic and Diluted Earnings per ADS attributable to ordinary shareholders of RMB0.18 and RMB0.18 respectively during the same period of 2023.
Speaker Change: We have maintained a robust cash position with cash-on-cash equivalent, restricted cash and term deposits, and short-term investment totaling RMB1.25 billion as of September 30, 2024.
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Speaker Change: Moving to our outlook, for the fourth quarter of 2024, we expect total revenues to be between RMB$1.5 billion and RMB$1.5 billion.
Speaker Change: 350 million and RMB 370 million. This outlook also takes into account the uncertainties of the paces of clinic openings and ramping up.
Speaker Change: as we are in the early stages of our clinic expansion and our business transformation. That being said,
Speaker Change: We are confident our strategic initiatives, integrating the upstream and downstream of the aesthetic medical industry, will ideally position us for long-term growth.
Speaker Change: These initiatives will enable us to capture a significantly larger share of the market and establish a solid foundation for profitability.
Speaker Change: As our clinic matures and market conditions stabilize, we expect our financial performance to gradually improve.
Speaker Change: This concludes our key remarks. I will now turn over the call to the operator and open the call for Q&A. Operator, we are ready to take questions.
Speaker Change: We will now begin the question and answer session. To ask a question you may press star and then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys.
Speaker Change: If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster.
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Thank you for watching!
The first question comes from...
Ivy Lee with Haitong Securities
Please go ahead.
Speaker Change: Okay, okay. Good evening, management, and thank you for taking my question. I would like to ask about the industry, from your current perspective, what new changes or trends are emerging in the medical aesthetics industry? And I'll translate myself. I would like to ask, what new changes or trends are emerging in the medical aesthetics industry? Thank you.
Thanks for watching!
Speaker Change: Hello, Evan. Thank you for your question. I will answer your question.
Speaker Change: In recent years, small and medium-sized enterprises have been favored by more and more consumers due to their simple operation, low risk, and short recovery time. However, the current market is dominated by small and medium-sized enterprises, and the lack of unified service standards and command control has led to uneven service levels. There are nearly 20,000 small and medium-sized enterprises in China, and more than 95% of them are small and medium-sized enterprises.
Speaker Change: China has not yet formed a nationwide joint brand, and there is a lot of room for standardization and integration in the industry. As consumer demand in the United States of America continues to grow, we believe that a nationwide large-scale Chinese-American joint brand will be born in the future.
Speaker Change: For example, in South Korea, Tencent has developed and matured into more than 10 well-known chain brands.
Speaker Change: If the Chinese market develops according to the same proportion, the number of stores in the future of the Sino-U.S. alliance is expected to exceed 2,000.
Speaker Change: We hope to represent the developed medical market in foreign countries and make it an easy and affordable medical project. This is also our original intention to establish a free and open medical clinic.
Speaker Change: In recent years, light medical aesthetic procedures have gained popularity due to their ease of operation, lower risk, and shorter recovery periods.
attracting a growing number of consumers.
Speaker Change: However, the current market is dominated by small and medium-sized institutions, lacking unified standards and quality control, leading to inconsistent service quality. There are around 20,000 medical aesthetic institutions nationwide, with over 95% being small institutions.
Speaker Change: No national chain clinic brands have yet emerged in the market, indicating significant room for standardization and consolidation. With the continued growth in demand for light medical aesthetics, we believe nationwide chain clinic brands will emerge in the future.
Speaker Change: South Korea serves as a prime example where the development of light medical aesthetic trends has already reached maturity.
Speaker Change: with over 10 well-known brands. If the Chinese market develops chain brands at a similar rate,
Speaker Change: The total number of light medical aesthetic chain clinics could exceed 2,000, presenting significant marketing opportunities.
Speaker Change: Our goal is to benchmark against developed overseas markets and make medical aesthetics accessible and affordable to all. This is also the original intention behind establishing our own chain of clinics.
Speaker Change: At present, the demand of Chinese consumers in the United States is clearly divided into two levels. The users of standardized products are more concerned about quality, return and high cost-effectiveness.
Speaker Change: Users of non-standardized projects are more likely to choose top-notch doctors and personalized plans. For this type of user, we launched the High-End Custom Business of Wanji Group. Users' reputation and financial performance are very good.
Speaker Change: Through the precise positioning of different levels of demand, we are committed to providing the ultimate experience that meets the needs of all kinds of foreign and American customers.
Speaker Change: We firmly believe in the development potential of this block, and we will continue to improve competitiveness through vertical integration and cost optimization.
通過整合上游供應鏈統一的管理和運營模式,降低各門店的運營和採購成本,通過整合上游供應鏈統一的管理和運營模式,降低各門店的運營和採購成本,
Speaker Change: in order to improve the overall profitability. Based on this broad development progress, XinYang is vigorously advancing into the QingYing joint market and is committed to becoming the leading joint brand in China.
Currently, demand among Chinese medical anesthetic consumers is polarized.
Speaker Change: By precisely targeting different consumer needs, we aim to deliver exceptional experiences to various customer groups.
Speaker Change: We are optimistic about the growth potential of light medical aesthetic chain clinics.
and are enhancing our competitiveness through vertical integration at cost.
Speaker Change: optimization. By integrating our upstream supply chain and implementing a unified management and operational model, we aim to reduce operating and procurement cost across our clinics, thereby improving overall profitability. Given this promising market outlook, we are committed to expanding our footprint in the light medical aesthetic market, aiming to become a leading domestic clinical chain brand.
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Xie Xie. Thank you.
Speaker Change: Thank you. The next question comes from Stacy Lee with Goldian Securities. Please go ahead.
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Speaker Change: Good evening, everyone. Thank you for the opportunity to ask this question. I would like to ask a question about POP business. As we can see, POP business has been reduced to a certain extent, especially after the closing of our chain. I would like to ask if there is any change in the overall strategic direction of POP. We have observed a decline in the POP business, particularly following the announcement of your chain extension. Has there been a strategic shift for POP? Thank you.
I'm sorry, I'm sorry, I'm sorry, I'm sorry, I'm sorry
Hello, Mr. Zhang. I'm here to answer your question.
Speaker Change: In terms of our business strategy, POP is an important component of our business.
Speaker Change: Its positioning is similar to DD platform or JD platform. There are both self-managed business and third-party cooperatives.
其中呢,自营业务是指新疆青年美联缩
Speaker Change: This is to deal with fierce market competition and traffic challenges. Compared with large traffic platforms, XinYang's traffic quality is higher, but it faces the risk of insufficient scale, which may lead to the loss of users and institutional clients in the long run.
Speaker Change: to attract more users to XINYANG's platform. This can attract more third-party institutions to register.
Speaker Change: They can provide users with more diverse and personalized products and can also bring good income to the platform so that the platform business can return to the track of rapid development.
Speaker Change: We continue to place significant importance on POP, which remains a critical component of our operations. Similar to platforms like Didi or JD.com, we maintain a mix of self-operated and third-party partners. The light medical aesthetic chain clinics are our self-operated business, developed to address intense market competition and traffic challenge.
Challenges
Speaker Change: which could potentially impact user and institutional retention over the long term.
Speaker Change: We have drawn valuable insights from product categories of Sam's Club and Pondonline and are developing our light medical aesthetics chain clinics.
Speaker Change: with the aim for them to become new track drivers, attracting and retaining more users on our platform. This approach attracts more third-party medical institutions to join, offering more diverse products to meet users' diverse and personalized needs, and are helping these institutions achieve greater benefits. Ultimately, it positions the platform to rapid growth.
接下來我們會更加關注機構和醫美消費者的體驗
Speaker Change: The number of commercial aircraft in China and the conversion rate from exposure to commercial aircraft are steadily increasing. In September and early June, the conversion rate from DAU to commercial aircraft increased by 4%, and the conversion rate from commercial aircraft to transactions increased by 20%.
Speaker Change: Currently, we are still adjusting the charge mode From the original advertising charge mode to the service charge mode From display charge to effect charge Pay more attention to effect conversion
Thanks for watching!
Speaker Change: Moving forward, we will place greater emphasis on the experience of institutions and consumers. On the institution side, our ROI for verified transactions improved steadily, with September showing an ROI increase of 50% compared to June.
Speaker Change: Feedback from institutions have been positive. From the consumer perspective, we remain committed to providing cost-effective products.
September's GMOe increased by 60 percent.
Speaker Change: Additionally, with the implementation of commission reforms and product optimization measures,
Speaker Change: the numbers of leads and the conversion rates from exposure to detail page.
have been showing improvement.
For example, during September's promotional activities
Speaker Change: the conversion rate of DAU to detail pages increased by 4% and the conversion rate from detail pages to transaction increased by 20% compared to June. We are also adjusting our fee model, transitioning from the original advertising-based model to a service fee-based model, shifting from exposure-based charge on performance-based charge.
placing great emphasis on conversion effectiveness.
Thank you.
Thank you.
Speaker Change: The next question is from the line of Nelson Chen with Citibank. Please go ahead.
Speaker Change: 谢谢管理员接受我的提问,我的问题是关于联锁业务这边的,在我们不断拓展联锁在全国业务版图的布局的同时呢,不知道我们公司展开机构加盟策略背后的一些机会或者是考量有什么呢? So let me translate the question myself. My question is regarding the cleanliness business. So what are the considerations behind Zhou Yang's move to implement a franchise model alongside the expansion of international chain network? Thank you.
Thanks for watching!
Hello, Nelson. I'm here to answer your question.
Speaker Change: From XinYang's original intention, we hope to solve the problem of information asymmetry in the industry through E-commerce communities and platforms, and reduce the risk and difficulty of consumer decision-making. With the high-speed development and popularity of the E-commerce industry over the years, we find that E-commerce consumption is still expensive, and at the same time, the E-commerce institutions that consumers really trust are still in the limelight.
Speaker Change: We always hope that one day we can serve 100 million Chinese people and let them enjoy a safe, convenient, and high-quality service.
Speaker Change: You don't have to pay a high and unreasonable price. That's why we are determined to become a nationwide joint brand. Maintain the principle of long-term development and build long-term trust with consumers. Win more customers' recognition with high-quality and cost-effective services.
通过维持高客户保有率,从而降低营销费用。
Speaker Change: to meet the expectations of budget international enterprises and create high functioning pharmaceutical facilities in comparison with that of American hospitals, and create a couple of useful consumers.
Speaker Change: Our original goal was to address the issue of information asymmetry in the medical anesthetic industry through our community and platform, reducing the decision-making costs and risks.
Speaker Change: Despite the rapid growth and popularization of medical aesthetics over the years, we found that services remain expensive and truly trusted institutions are rare. We have always aspired to serve 100 million Chinese consumers, offering safe, convenient, and high-quality services at reasonable prices.
Speaker Change: Our goal is to become a national chain clinic brand, building long-term trust with consumers through high-quality, cost-effective services. By maintaining high customer retention, we can reduce marketing expenses, achieving significantly greater efficiency per employee and per square meter than traditional clinics, while delivering more value and benefits to consumers.
Thanks for watching!
Speaker Change: From a business perspective, the success of the chain model needs to be built on a strong mid-level support.
Speaker Change: This can be done by rapidly expanding the scale to mitigate the cost of China-Taiwan relations and thereby maximize the cost-effectiveness.
Speaker Change: At the moment, we choose to open an alliance mode to seize the development opportunities of the clean energy industry.
Speaker Change: to accelerate the expansion of the Xin-Yang-Qing-Yi-Mei-Lian-Shuo-Ban-Tou and effectively control the cost.
Speaker Change: The operation data of more than 10 direct-to-home stores in Xinjiang has proven the feasibility of this model. We believe that in the future, by strategically introducing partner partnerships, we will further accelerate the speed of opening, expand brand influence, and gain more support from business, property, customer support and government.
Speaker Change: so that XinYang can focus on the construction and improvement of China-Taiwan capability. Based on our rigorous financial and operational calculations, we are confident in the rapid growth of our store and the profitability of our single store.
Speaker Change: For the business itself, the success of the chain model relies on central platform support, which helps spread central platform costs over an expanding scale, maximizing cost efficiency. Our decision to launch the franchise model aims to capture development opportunities which exist in daylight medical aesthetic sector.
Speaker Change: accelerate the expansion of our clinic network and effectively control costs.
The operating data from our initial 10-plus
self-operated clinics
Speaker Change: have already validated this model's feasibility. We believe that introducing franchise partners will further accelerate expansion, enhance blinding funds, and secure resources and support from commercial property owners, customers, and government agencies.
Speaker Change: allowing us to focus on building and enhancing central platform capabilities.
Speaker Change: Based on our regular financial and operational projections, we are confident in achieving rapid growth and profitability at the individual store level for our franchised clinics.
Our jiamen mode uses the full barrelChef mode
Speaker Change: In order to ensure the high standard of service quality and the deep integration of the supply chain, all store managers and doctors are trusted employees. The information system is managed and controlled by the headquarters, thereby realizing the standardized operation of the joint store. In addition, the open and closed asset-free business model is more advantageous in terms of financial performance, which will bring a higher profit margin and the potential for sustainable development to XinYang.
Speaker Change: Our franchise model uses a fully managed approach to ensure high service standards and deep integration of the supply chain.
Speaker Change: The supervisors and doctors at all clinics are Zhou Yang's registered employees, and information systems are strictly managed and controlled by headquarters, ensuring standardized operations across all chain clinics. Additionally, the asset-light franchise model offers financial advantage, promising greater profitability and sustainable growth potential for the company.
Thank you.
Speaker Change: Thank you. The next question is from Harry Zhao with Deutsche Bank. Please go ahead.
Speaker Change: Harry Zhao, your line has been unmuted. You may proceed with your question.
XIN LIU, XIN LIU, XIN LIU, XIN LIU, XIN LIU
Thank you
Speaker Change: As there is no response from the line of Harry Zhao, we will proceed to the next question.
Speaker Change: which will be from the line of Lucy Zhao with Penghua Funds, please go ahead.
Thanks for watching!
Thank you.
Speaker Change: Thank you Lucy for your question. We believe profitability fundamentally comes from business growth.
Speaker Change: Our clinic chain business has proven its growth potential and by optimizing order and back office costs.
while maintaining expansion speed.
There exists more room for perfect.
Speaker Change: Additionally, the continuous expansion of our upstream product pipeline and the launch of new products will further enhance our profitability. As one of the very few companies to successfully achieve vertical integration in the industry, we leverage our comprehensive advantages and forward-looking strategies to maintain long-term competitiveness and high-quality growth in the market.
the reduction in sales and marketing expenses.
Speaker Change: The result of adjustment to our marketing strategy, we recognize that the current medical aesthetics
Speaker Change: market is beyond pure traffic competition and requires a professional platform with a deep understanding of the industry and user needs, offering consumers excellent experience and addressing their genuine concerns.
Speaker Change: This has led us to focus more on refined operations and cost-effectiveness analysis, prioritizing the efficiency and precision of marketing investments, and making timely adjustments based on market conditions.
in terms of overall expense management.
Speaker Change: Effective cost control has enabled us to maintain a well-managed expense ratio in Q3 2024, which stood at 60.5%, down 3% point year-over-year, and 0.2% percentage point quarter-over-quarter.
Thank you.
Thank you.
Thank you.
Answer in description
Abby Zhao, if you are speaking, you are not audible.
Hello? Yeah, can you hear me?
Yes, you are audible now. You may proceed.
Oh, OK.
Speaker Change: Thank you Guan Lichen for giving me this opportunity to speak. Sorry, there was a problem with the microphone. I want to ask a question about upstream business. What are the advantages of XinYang compared to traditional upstream business? Let me just translate for myself. I want to ask a question about upstream business. What competitive advantages does XinYang have over traditional upstream companies to ensure success?
Thank you.
Speaker Change: Hi, Harry. Let me answer your question. At present, XinYang has shown significant advantages in commercial business. For example, Alastin, a Korean brand. Our shipment volume has reached 117% in three years in the very competitive Bonyang Village track. In addition, XinYang, as a new entry, has successfully stepped into the forefront of the domestic supersonic gun market. The total shipment volume has exceeded more than 200 units. This fully proves that XinYang has an ecological operating advantage in commercial business and has a strong position in the fierce market competition.
Thanks for watching!
Speaker Change: Additionally, as a new player in the ultra-style market, we have quickly risen to prominence.
Speaker Change: with cumulative shipments of our TrueLift ultrasound device reaching over 200 units. This underscores the ecosystem-based operational advantage of our upstream business, allowing us to maintain a durable position in a highly competitive industry.
For companies with limited marketing resources and capabilities,
Speaker Change: to help potential products grow rapidly and help top-level manufacturers build a stable market base in the medical industry and boost market influence.
Speaker Change: In addition, we have opened 17 stores in nine core cities, and plan to accelerate the coverage of the larger market and form a scale advantage through the model of supporters joining in the future, further promoting product sales and enhancing competitiveness.
Speaker Change: For upstream companies lacking marketing resources and capabilities, we provide target-wide positioning and promotional support to enhance product visibility and expand coverage among end-consumers, medical aesthetic institutions, and doctors.
Speaker Change: These help potential products grow into best sellers and assist upstream manufacturers in establishing a solid market foundation and enhancing their influence in the industry. Through our self-operated chain clinics, we have launched several top-performing products.
Speaker Change: setting a new standard in terms of industry marketing strategies. Currently, we have opened 17 clinics in 9 core cities, and we plan to accelerate our market coverage through a mix of sub-operated and franchise models, further driving product sales and enhancing competitiveness.
Speaker Change: In addition, the US-Russia exchange is the biggest exhibition in the industry.
Speaker Change: It is an important channel for business-owned companies, development institutions and doctors to gain influence.
Speaker Change: As the only foreign shareholder of US-Russia, we will actively participate in the US-Russia international trade conference to strengthen our upstream business cooperation with US-Russia.
推動產業創新發展
Speaker Change: In the future, we hope to be a competitive advantage in a series of areas such as marketing capabilities, data resources, and team configuration, and become an upstream manufacturer of eco-friendly products.
Speaker Change: Additionally, our participation as the only external shareholder of the Marvellous International Congress of Medical Aesthetics, the largest industry event, will strengthen our upstream business by expanding influence among institutions and doctors, promoting innovation in the industry. With our competitive edge in marketing, data resources, and team expertise, we aim to become a full category upstream medical aesthetic manufacturer within a robust ecosystem.
Thank you.
Speaker Change: This brings us to the end of our question and answer session.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Pi Spiro takes Zheyuan's seat
Speaker Change: This is the moment you'll be the happiest in your life. I love you!
Speaker Change: Mang$ totally forgot to introduce them... Have a good time sunbathing in a soft landing blanket.
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Speaker Change: Director of Photography, Artistic Direction, Editing, Editing Music, Sound, Editing Music, Sound, Editing Music, Sound, Editing Music, Sound, Editing [inaudible]
The End
Speaker Change: The first time I've seen this video, I've been watching this video for a long time.
The