Q4 2024 So-Young International Inc Earnings Call

Operator: Ladies and gentlemen, thank you for standing by for So-Young's fourth quarter and full year 2024 earnings conference call. At this time, all participants are in 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.

Ladies and gentlemen, thank you for standing by for so Young's fourth quarter and full year 2024 earnings conference call.

At this time, all participants are in listen only mode.

After management gives her prepared remarks, there will be a question and answer session.

As a reminder, today's conference call is being recorded.

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

Speaker Change: I would now like to turn the meeting over to your host for today's call Ms. Monica. Please go ahead Luna.

Mona Kuo: Please go ahead, Mona. Thank you, operator, and thank you, everyone, for joining So-Young's fourth quarter 2024 audience conference call.

Speaker Change: Thank you operator, and thank you everyone for joining I'm, sorry, I was fourth quarter 2020 full earnings conference call. Joining me today on the call is Mr. Xing Jin co founder Chairman and CEO and Mr. Next Chao says Oh, well, it's not that the discussion today will contain forward looking statements.

Mona Kuo: 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 harbor provisions of the U.S. private securities and the Litigation Reform Act of 1995. Four looking statements are subject to risk and alternatives that may cause actual results to differ materially from our current expectations. Potential risks and alternatives include but are not limited to those outlined in our public balance with SEC, including our annual report on Form 20-F.

Speaker Change: Made under the Safe Harbor provisions of the U S private securities.

Speaker Change: Litigation Reform Act of 1995 forward looking statements are subject to risks and alternatives that may cause actual results to differ materially from our current expectations potential risks and also not chasing close by.

Speaker Change: To our knowledge of imitated this outright yeah Republic furnace.

Speaker Change: D C, including our annual report on form 20-F, so young does not undertake any obligation.

Mona Kuo: So-Young does not undertake any obligation to update any four looking statements except as required under applicable law.

Speaker Change: Any forward looking statement, except as required under applicable law finally placed northstar unless otherwise stated all fingers mentioned during this conference call are in RMB at this time I'd like to turn the call over to Mr. Xing Jin.

Mona Kuo: Finally, please note that, unless otherwise stated, all figures mentioned during this conference call are in RMB.

Xing Jin: At this time, I'd like to turn the call over to Mr. Xing Jin. Hello, everyone. Welcome to today's press conference.

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Xing Jin: In the 4th quarter of 2024, our total revenue was 3.69 billion RMB and the net loss was 6.08 billion RMB The net loss was 53.2 million RMB The large-scale fluctuation in performance is mainly due to the sudden increase of RMB5.4 billion in business interest in the paper company Qi Zhi Jiguang. as well as our continued discussion on the Chinese-English Joint Venture. Hello everyone and welcome to today's conference call.

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Speaker Change: Hello, everyone and welcome to today's conference call in the fourth quarter I'm trying to 'twenty. So I went to a close on the German court her or 300.

Xing Jin: In the fourth quarter of 2024, our total rent reserve in the quarter was $369.2 million.

Speaker Change: 2 million net loss attributable to Sohu young was 676 million well knock off and that's what else was 53 point of Humana. The fluctuation in your bottom line was primarily driven by a onetime goodwill impairment charge of 540 minutes for all of our subsidiary and I recall it.

Xing Jin: Net loss attributable to So-Young was $676 million, while non-GAAP net loss was $53.2 million. The fluctuation in our bottom line was primarily driven by a one-time goodwill impairment charge of $540 million for our subsidiary Miracle Laser, as well as our continued investment in the self-operated aesthetics center network. In the fourth quarter, we will continue to promote the vertical integration strategy of the entire industrial chain. Thanks to the large amount of user data we have accumulated in the traditional community e-commerce business, brand trust base, and the deep layout of the upstream supply chain, we have brought brand and cost advantages to the chain business, and promoted the rapid development of the chain business.

Speaker Change: These are some of our continued investment in the self operated that takes central network.

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Xing Jin: Our Qingyimei chain brand, Xinyang Youth Clinic, has completed the launch of a new brand. The brand focuses on providing high cost-effective e-commerce services to provide consumers with a comprehensive e-commerce resistance solution, promote e-commerce service popularization, and help Chinese consumers achieve e-commerce freedom. The continuous growth of the chain business proves its commercial model and potential development. In the future, we will continue to invest in our joint business and make it a new engine of growth for our group. During the quarter, we continue to undertake our vertical integration strategy, leveraging our extensive user base, broad equity solutions for our top business, and upstream supply chain capabilities to drive the rapid expansion of our aesthetic centers.

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Julie Jungwirth: During the quarter, we continue to undertake all of our vertical integration strategy leveraging all of our survey, but equities.

Julie Jungwirth: Marketing is an upstream supply chain capabilities to drive the rapid expansion of our aesthetics franchise.

Xing Jin: Our So-Young Clinic officially launched with a refreshed bright identity that is focused on providing high-quality, cost-effective light medical aesthetics and anti-aging solutions. They provide refreshments to make medical aesthetics more accessible and empower Chinese consumers to individually pursue aesthetic freedom. The continued high growth of our aesthetic center network demonstrates the viability of its business model and growth potential. Moving forward, we will continue investing in the business to establish it as a new growth engine for the group.

So young cleaning officially launched weighed a refresh to provide identity that is focused on providing high quality cost effective like medical aesthetics, and anti aging and solution. They fly to refresh and to make medical aesthetics more accessible and empowered Chinese consumers to individually.

Julie Jungwirth: As soon as that take freedom. They continued high growth of all our aesthetic center network demand trade. They are by the ability of its business model and growth potential moving forward. We will continue investing in the need to establish H <unk> and yugo energy for the group.

Xing Jin: Let's take a closer look at the development of our business in the fourth quarter. In terms of joint business, we have set up 19 Xinyang Youth Clinic branches in Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou, Chengdu, Wuhan, Chongqing, Changsha, and nine core cities in the fourth quarter. They have all been put into operation. Among them, 11 branches achieved a monthly cash flow of cash flow at the end of the year. The overall satisfaction level is maintained at 4.98 points and 5 points. This proves that we have reached an industry-leading level in terms of service quality. In the past four quarters, the net income of the chain business has reached 81.3 million RMB The return has increased by 79% and the share price has increased by 702% and more.

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Julie Jungwirth: Hey, Joe.

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Xing Jin: The number of paid service points in Hexiao is more than 81,500. Since the end of 2024, we have accumulated more than 39,500 active users which confirms our brand appeal and reflects XinYang's precise grasp of market demand. due to the price strategy of the Double 11 and Double 12 promotion activities and the early promotion strategy of the entry-level US group review. We have successfully attracted a large number of users, but the per capita income has declined in the short term. This is a phase-by-phase impact that we expected in the process of expanding user scale.

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Xing Jin: Now, let me give you a closer look at our quarterly performance. In Q4, we have opened 19 So-Young clinics across nine core cities, including Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou, Chengdu, Wuhan, Chongqing, and Changsha, all of which are fully operational. Among them, 11 aesthetic centers have already achieved positive monthly operating cash flow in December. Our customer satisfaction remains at an industry-leading 4.98 out of 5. Revenue from our aesthetic center business surged to $81.3 million during the quarter, up 79% quarter-over-year and 702% year-over-year. We recorded over 38,000 verified paid visits. Total number of verified paid aesthetic treatments surpassed 81,500.

Speaker Change: Now, let me give you a crypto little catch however quantity.

Speaker Change: In Q4, we have opined 19 somehow clinics across nine core cities, including Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou, Chengdu, Hangzhou, and Shenyang, and Changsha, Oh, very trustful and operational another 11 aesthetics centers have already achieved close to most of the operating cash flow.

Speaker Change: Our customer satisfaction remains an industry, leading full points nine H O to O five revenue from our extensive business surged to 81.3 man in Germany in the quarter.

Speaker Change: 79% quarter hurt us about 102% year over year. They recorded over that's H found in very fine paid leaves a total number of very fine paid aesthetic treatments surpassed it. He was southern 500 as of the end of 'twenty 'twenty four total number of active users exceeded.

Xing Jin: As of the end of 2024, total number of active users exceeded 39,500. Highlighting the strong appeal of our brand and our deep insight into market demand, we successfully acquired a large number of verified users through our prizing strategies for the Double 11 and Double 12 sales events and promotional activities following the debut of our aesthetic center on May 20.

Speaker Change: That's a nice southern 500, highlighting the strong appeal of our glad and our deep insight into market demand. We successfully acquired a large number of verified users. So our primary strategy for the double 11, and double 12 south.

Speaker Change: And promotional activities following the debate with Oh, However that takes center I'm really trying to appeal.

Speaker Change: However, lead to a temporary decline or types of revenue, which was anticipated to be telecom or user acquisition strategy.

Xing Jin: 具体到门店运营层面,以出于成熟期的北京宝丽样板店为例, 我们的老客收入占比达68%, 充分证明稳定高效的标准化服务对客户的长期吸引。 以成长期的上海正大广场店为例, 开业第五个月时,服务人次已超过每月两千人, 平销已超过一万元人民币 Thanks to the excellent user reputation and the wide brand awareness, XinYang's high-efficiency market promotion, scientific organization management, and excellent operation efficiency will control the average customer cost below the average level in the industry. In the fourth quarter, the chain store officially joined the US group review, rapidly improving brand awareness. The ROI of the channel is excellent, and has become a stable and effective customer channel. Up to now, all the stores in XinYang have not yet joined XinYang APP. The customers are mainly due to the influence of the brand, privacy, other platforms, and the change of users, etc.

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Xing Jin: Our Beijing Head Aesthetics Center has now matured with repeat customer revenue accounting for 8% of total revenue, demonstrating the long-term appeal of our uniform, high-quality services. Our Shanghai Center in Super Black Mall is in the news and received over 2,000 monthly visits during its fifth month of operation, with per square meter sales exceeding 10,000. Through strong brand awareness, efficient marketing, and robust operational management, we have successfully maintained customer acquisition costs below the industry average. During the quarter, our Aesthetics Center officially debuted on the Meituan Dianping, quickly reinforcing its brand recognition. This channel has generated strong ROI and become a reliable and cost-effective customer acquisition source for us.

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Speaker Change: Our same store total revenue domestic trade when the longtime appeal of our unit from high quality services ever Shanghai Center, So purple at it.

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Xing Jin: To date, none of our Aesthetics Centers have been integrated into the So-Young app. Instead, customers primarily come from various channels, including the brand-influenced private domain, traffic, other platforms, and user referral.

Speaker Change: Not all of them are especially expenses, how big Integra cheating too they stay up and started customer primarily come from various channels, including the broad influence province, So men traffic other platform and it was there before.

Xing Jin: In the future, XinYang QingYiMei LianShuo will plan to further encrypt the layout in the existing core cities and quickly copy our successful chain operating model to more cities to steadily expand the chain business model. Looking ahead, we plan to deepen our presence in core cities, replicating our proven aesthetic centers across more locations to further expand our network.

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Speaker Change: Kind of how we plan to deepen our presence in core cities replicating our proven aesthetics centers across more locations to further expand our network.

Xing Jin: In terms of upstream business, we have made progress in the strategy of building a full-scale ecological EMEI supply chain. In the fourth quarter, the number of real-estate agency customers we serve continued to climb, accounting for more than 1,200. In terms of real estate business data, the number of upstream real estate shipments has increased significantly, exceeding 52,000. The growth rate of Huanbi is up to 20%, which highlights the market's recognition and demand for the product. It also proves that we are leading in product development, quality control and market promotion. Our comprehensive medical aesthetics supply chain is yielding results as well.

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Speaker Change: Our comprehensive medical aesthetics approaching you already I mean, it's all essentially all during the quarter. We served over 1200 medical institutions to meet all of our injectable solution.

Xing Jin: During the quarter, we served over 1,200 medical institutions with our injectable solutions, reflecting continued growth in our customer base. Demand for injectable remained robust, with over 52,000 units shipped during the quarter, up 20% sequentially. This highlights strong market recognition and demand for our products and underscores our product's environment, quality control, and promotional capability.

Speaker Change: <unk> continued growth in our customer base the monarch for injectable remains robust.

Speaker Change: We're at 52 something units shipped during the quarter up 28% sequentially. These highlights strong mark Patriarch coordination and demand for our products and our schools our production, while I'm on the quality control and promotional capabilities.

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Xing Jin: Community e-commerce business is our traditional business. It not only continues to promote a high-quality development strategy for its own business, but also plays a key role in the company's overall strategy. As a current source of profit, community e-commerce business will continue to contribute profits to us to support the development of new business. In the fourth quarter, our verified EMEI GMV reached 357 billion yuan, a 3% increase in return, a 10% increase in transaction orders, and a 6% increase in total return on investment. We continue to carry out the high-quality initiatives for POP, which remains the cornerstone for our traditional business and plays a pivotal role in our overall strategy.

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Speaker Change: For pop, which remains the cornerstone for our traditional business and plays a pivotal role out of our strategy I think she profits driver Israel continues to generate stable earnings to support our new business during the quarter, Jim where you feel very fine medical aesthetic services reached 850.

Xing Jin: As a key profit driver, it will continue to generate stable earnings to support our new During the quarter, JM Wei for Verified Medical Aesthetic Services reached $356.6 million, up 3% sequentially. Total transaction volume increased 10% year-over-year, while per capita installed GTV grew by 6% sequentially.

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Speaker Change: 3% sequentially Coca Cola transaction volume increased 10% year over year, well per cap, Tony J T V grew by 6% sequentially.

Xing Jin: With China and the U.S. becoming the absolute mainstream of consumer goods, large-scale China-U.S. joint ventures will become possible. Unlike traditional medical institutions that use doctor's IP and personalized treatment to acquire high-priced business models, the future of large-scale medical-to-medical associations must provide standardized, high-efficiency services, and quickly expand to form a scale-up effect. As light medical aesthetics become prominent in the medical aesthetic market, the rise of large-scale light medical aesthetic chains is inevitable. Unlike traditional institutions that rely on doctor-guiding and personalized treatments to command high premiums, these chains will expand rapidly by offering uniform, highly cost-effective services to achieve economic subscales.

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Speaker Change: Large medical aesthetics.

Speaker Change: I started the market they rise of large scale medical aesthetic change.

Speaker Change: Unlike traditional institutions central rely on talk providing personalized treatment to come on high premiums. This chance, we'll expand dramatically by offering unit from highly cost effective services to achieve economics of scale.

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Xing Jin: whether it can create a scale-up effect is crucial to the chain. First, a sufficient number of stores and density can create a brand effect and reduce the cost of customers. Second, a large enough scale can support the self-built supply chain to reduce product cost and increase profit margin. Finally, a large enough scale can support a strong digital platform. A comprehensive digitalization can reduce the dependence on people and create a high standardization and consistency. Gao is critical to the success of chains. First, a sufficient number of locations and market density are essential for building broad awareness and reducing customer acquisition costs.

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Speaker Change: Cowen is critical to the success of a Trump first if sufficient number of location and market density artificial for building brand awareness and reducing customer acquisition costs.

Xing Jin: Second, greater scale innovative state development and in-house supply chain, lowering procurement cost and expanding profit. Lastly, a large network supports a strong digital operations platform, where comprehensive digitalization reduces reliance on human management and ensures a high degree of standardization and consistency across all locations.

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Xing Jin: The advantages of XinYang as a QingYi-Mei chain is that it has a wide range of well-known brands, a four-year complete product supply chain, and natural excellence in traditional US-based Internet technology genes and AI technology. What we need is more time to develop more high-quality treatments. We believe that in the future, China will have a multi-thousand-scale Chinese-U.S.-U.S. alliance. And even if it reaches such a scale, it is less than 5% of the total number of Chinese medical institutions. This will be a long and bloody race. We have enough patience to win the final victory. So-Young's advantage in building a light medical anesthetic chain lies in our strong broad recognition of an integrated product supply chain established over the past four years, our corporate internet DNA and AI capabilities, which far exceed those of traditional medical anesthetic institutions.

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Speaker Change: So we have that advantage in building out large medical aesthetics.

Speaker Change: Our strong brand recognition.

Speaker Change: Taxes paid product supply chain established over the past four years of a corporate internet and AI capabilities, which far exceeds the traditional medical aesthetic institutions.

Xing Jin: What we need now is time to consistently expand and establish more high-quality aesthetics and technology. We believe that China will see the emergency of a leading light medical aesthetic chain with over a thousand locations. Even at that scale, it would account for less than 5% of the total number of medical aesthetic institutions. This is a long-term growth opportunity, and we have the patience and commitment to emerge as the market leader.

Speaker Change: What do I need now, it's time to consistently expand and establish more pipe quantity, especially expenses.

Speaker Change: We believe that China will be able to see the emergency.

Speaker Change: And a large medical aesthetics chunk I mean over it felt into locations even at that scale.

Speaker Change: Counterpart is about 40% of the total number of medical aesthetic institutions. They say, it's a long term opportunity and we have the patience and commitment to emerge as the market leader.

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Nick Zhao: 现在请Nick来介绍四季度的财务结果,之后我们将进行问答 Now I'll hand over to our staff for a sneak peek of the financial results by the QAC. Hello, this is Nick. Please be reminded that all amounts quoted here will be in RMB. Please also refer to our earnings release for detailed information of our comparative financial performances on a year-over-year basis. Total revenues during the quarter were RMB 369.2 million, down 5.5% year-over-year, primarily due to the decrease in revenue generated by So-Young Prime. Information, reservation services, and other revenues were RMB201.5 million, down 27.7% year-over-year, primarily due to a decrease in revenue generated by So-Young Prime.

Speaker Change: Now I'll hand, it over to Samsung.

Samsung: So the financial results.

Speaker Change: The Q&A session.

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 of our comparative financial performance is a year over year basis.

Speaker Change: Total revenues during the quarter were RMB $369 2 million down five 5% year over year, primarily due to the decrease in revenue generated by Philly I'm, Brian <unk>.

Speaker Change: Information Reservation services and other revenues were RMB 200 on the $1 5 million.

Speaker Change: 27, 7% year over year, primarily due to a decrease in revenue generated by three on prime.

Nick Zhao: Aesthetic treatment services revenues reached RMB81.3 million, a remarkable 701.6% year-over-year increase. primarily due to the expansion of our aesthetic center business. Sales of medical products and maintenance services will RMB 86.2 million. down 15.2% year-over-year, primarily due to a decrease in order volume for medical equipment. Cost of revenues was RMB 153.1 million, up 11.2% year-over-year, primarily due to the expansion of our aesthetic center business. Within cost of revenues, cost of information, reservation services and others will RMB 44.5 million down 48.2% year-over-year primarily due to a decrease in costs associated with So-Young Prime. Cost of aesthetic treatment services will RMB 65.2 million, up 702.3% year-over-year, primarily due to the expansion of our aesthetic cost center business.

Speaker Change: I started treating Minnesota as revenues reached RMB 81 3 million.

Speaker Change: Muscle 701, 6% year over year increase.

Speaker Change: Primarily due to the expansion of our aesthetics send her business.

Speaker Change: Sales of medical products and the maintenance services were RMB 86 point too many.

Speaker Change: Ah down 15, 2% year over year, primarily due to a decrease in order volume for medical equipment.

Speaker Change: Cost of revenues, what was RMB $153 1 million up 11, 2% year over year, primarily due to the expansion of our aesthetics send her business.

Speaker Change: Within cost of revenues cost of information reservation services, and others were RMB $44 5 million down 48.2% year over year, primarily due to a decrease in costs associated with Sony on Prime.

Speaker Change: Cost of aesthetic treatments services were RMB 65, 2 million up 702, 3% year over year, primarily due to the expansion of our west that's a cost center business.

Nick Zhao: Cost of medical products sold and maintenance services were RMB43.3 million, down 0.5% year-over-year, primarily due to a decrease in costs associated with the sales of cosmetic injectables.

Speaker Change: Cost of of medical products sell salt and the maintenance services were RMB $43 3 million down 0.5% year over year, primarily due to a decrease in costs associated with the sales of cosmetic injectables.

Nick Zhao: Total operating expenses were RMB815.2 million, up 216.2% year-over-year. sales and marketing expenses will RMB 134 million, up 6.2% year-over-year, primarily due to a decrease in payroll costs. G&A expenses were RMB 98.4 million, up 13.6% year-over-year, primarily due to an increase in professional service fees and allowance for credit loss. R&D expenses were RMB 42.8 million, down 5% year-over-year, primarily attributable to improvements in staff efficiency. Impairment of goodwill was RMB 540 million, primarily due to an impairment assessment related to our subsidiary, Miracle Laser. income tax expenses or RMB 2.1 million compared with income tax benefits of RMB 10.8 million in the same period of 2023.

Speaker Change: Total operating expenses were RMB 815.2 million up 216.2% year over year.

Speaker Change: Sales and marketing expenses were RMB 134 million up six 2% year over year, primarily due to a decrease or increase in payroll costs.

Speaker Change: <unk> expenses were RMB 98, 4 million up 13, 6% year over year, primarily due to an increase in professional services and our allowance for credit losses.

Speaker Change: R&D expenses were RMB 42.8 million down 5% year over year, primarily attributable.

Speaker Change: Attributable to improvements in staff efficiency.

Speaker Change: Impairment of goodwill was RMB 540 million, primarily due to impairment assessments related to our subsidiary our medical laser.

Speaker Change: Income tax expenses were RMB, two 1 million compared with income tax benefits of RMB 10, 8 million in the same period of 2023.

Nick Zhao: Net loss attributable to So-Young International Inc. was RMB 607.6 million compared with a net income of RMB 17.5 million during the same period last year. non-GAAP net loss attributable to So-Young International Inc. was RMB 53.2 million compared with non-GAAP net income of RMB 35.7 million during the same period of 2023. basic and diluted loss per ADS attributable to ordinary shareholders, or RMB 5.92 and RMB 5.92 respectively, compared with basic and diluted earnings per ADS attributable to ordinary shareholders of RMB 0.18 and RMB 0.18 respectively during the same period of 2023.

Speaker Change: Net loss attributable to <unk> International Inc. Was RMB $607 6 million compared with a net income of RMB $17 5 million during the same period last year.

Speaker Change: non-GAAP net loss attributable to so young International Inc. Was RMB $53 2 million compared with non-GAAP net income of RMB 35, 7 million during the same period of 2023.

Speaker Change: Basic and diluted loss per ads attributable to ordinary shareholders were RMB 592, and RMB 592, respectively, compared with basic and diluted earnings played yes attributable to ordinary shareholders of RMB 0.18, and the RMB zero point about eight.

Speaker Change: Respectively.

Speaker Change: The same period of 2023.

Nick Zhao: for the full year 2024. Total revenues were RMB 1.47 billion, down 2.1% year-over-year. Within total revenues, information, reservation services, and other revenues were RMB 929.5 million, down 19.3% year-over-year. Aesthetic treatment services revenues were RMB 169.3 million, up 1,206.1% year-over-year. Sales of medical products and maintenance services will RMB 368 million, up 10.3% year-over-year. Cost of revenues were RMB567.6 million, up 4.3% year-over-year, primarily due to the expansion of our aesthetic center business. Total operating expenses were RMB1.52 billion, up 50.1% year-over-year. Net loss attributable to So-Young International Inc. was RMB589.5 million compared with the net income of RMB21.3 million in 2023.

Speaker Change: For the full year 'twenty 'twenty four.

Speaker Change: Total revenues were RMB.

Speaker Change: 1.47 billion down two 1% year over year within total revenues information reservation services and other revenues were RMB $929 5 million.

Speaker Change: $19 three.

Speaker Change: So year over year.

Speaker Change: Starting treatment services revenues were RMB $169 3 million up a 1206, 1% year over year.

Speaker Change: Sales of medical products and the maintenance services were RMB 368 million up 10, 3% year over year.

Speaker Change: Cost of revenues were RMB $567 6 million up four 3% year over year, primarily due to the expansion of our aesthetic center business.

Speaker Change: Total operating expenses were RMB.

Speaker Change: 1.552 billion up 50.1% year over year.

Speaker Change: Net loss attributable to still young International Inc. Was RMB $589 5 million compared with a net income of RMB 21 3 million in 2023.

Nick Zhao: non-GAAP net loss attributable to So-Young International Inc. was RMB 4.7 million compared with non-GAAP net income of RMB 58 million in the fiscal year 2023. Basic and diluted losses per ADS attributable to ordinary shareholders were RMB5.72 and RMB5.72, respectively, compared with basic and diluted earnings per ADS attributable to ordinary shareholders of RMB0.21 and RMB0.21, respectively, in fiscal year 2023.

non-GAAP net loss attributable to <unk> International Inc. Was RMB, four 7 million compared with non-GAAP net income of RMB 58 million in the fiscal year 'twenty.

Speaker Change: <unk> 23.

Speaker Change: Basic and diluted losses attributable to ordinary shareholders were RMB 505.

Speaker Change: Five points to seven two and RMB 572, respectively, compared with basic and diluted earnings per ads attributable to ordinary shareholders of RMB 0.21, and RMB zero point to why respectively in fiscal year 'twenty to 'twenty three.

Nick Zhao: We have maintained a robust cash position, with cash and cash equivalents, restricted cash and term deposits, term deposits and short-term investments totaling RMB 1.25 billion as of December 31st, 2024. Moving to our outlook for the first quarter of 2025, we expect total revenues to be between RMB 280 million and RMB 300 million. Several of our business initiatives, including both our aesthetic center business and the sales of medical equipment and maintenance services, have already yielded impressive results, reinforcing our leading position in the industry. We remain confident that our long-term strategy focusing on the vertical integration of the entire aesthetic medical industry and leveraging our core strengths will enable us to capitalize our new growth opportunities, diversify our revenue streams, and drive sustainable growth.

Speaker Change: We have maintained a robust cash position and a bit of cash and cash equivalents restricted cash and term deposits time deposits and short term investments totaling RMB 1.25 billion as of December 31st 2024.

Speaker Change: Moving to our outlook for the first quarter of 'twenty to 'twenty five.

Speaker Change: Oh, we expect total revenues to be between RMB 200, and the 80 million and RMB 300 million.

Speaker Change: Several of our business initiatives, including both our aesthetic center business and the sales of mentioned our medical equipment and maintenance services have already yielded impressive results reinforcing our leading position positions in the industry, we remain confident that our.

Speaker Change: Our long term strategy.

Speaker Change: Focusing on the vertical integration of the entire aesthetic medical industry and really leveraging our core strengths as we enable a well even a boss to capitalize our new.

Speaker Change: New growth opportunities diversify our revenue streams and to drive.

Speaker Change: De novo growth.

Nick Zhao: Ultimately, this transformation will help us to fulfill our vision of making aesthetic and medical treatment services accessible to a much wider consumer base. With the continuous expansion of our aesthetic center businesses and market conditions stabilizing, we anticipate a steady improvement in our financial performance.

Speaker Change: Ultimately this transformation will help us to fulfill our vision of making aesthetic and medical treatment services accessible to a much wider consumer base.

Speaker Change: With the continuous expansion of our aesthetics and center businesses and the market conditions stabilizing we anticipate a steady improvement yeah, well financial performance.

Nick Zhao: This concludes our key remarks.

Speaker Change: This concludes our remarks.

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

Speaker Change: I'll turn it over to the call to the operator and open the call for Q&A.

Speaker Change: Thank you.

Speaker Change: So to your question, yes, Sir. Thank you we will now begin the question and answer session.

Operator: We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, we ask that you please pick up your handset before pressing the key. To adjourn your question, please press star then 2.

Ask a question you May press Star then one on your telephone keypad.

Speaker Change: If you were using a speaker phone we ask that you. Please pickup your handset before pressing the keys.

Speaker Change: To withdraw your question. Please press Star then two.

Nelson Jung: Today's first question comes from Nelson Jung with Citibank. Please go ahead. Good evening. Thank you for accepting my question. My question is about our POP business. I would like to ask, in this POP business, we have made some new progress this year in terms of sales and cooperation. How have these progresses helped them to get through the current integration phase of our industry? So let me translate the question into English. Thanks for taking my question. My question is related to the POP business. What are the latest developments in merchant support and empowerment on your platform during the industry consolidation period?

Speaker Change: Today's first question comes from Nelson Cheung, whereas Citibank. Please go ahead.

Speaker Change: Hey, Nick why do you feel like sometimes you can't get on with it.

Speaker Change: He is a plenty of room in that part of the game.

Speaker Change: Okay.

Speaker Change: Uh huh.

Speaker Change: I think I said definitely.

Speaker Change: Let me take that.

Speaker Change:

Speaker Change: A bunch of people to go.

Speaker Change: Even though.

Speaker Change: Let me translate the question into English first.

Speaker Change: We'll take care of my question.

Speaker Change: My question is related to the pulp business.

Speaker Change: What are the latest developments with the emergence of course and empowering.

Speaker Change: Backbone joined the industry consolidation.

Nelson Jung: Thank you.

Speaker Change: Yeah.

Xing Jin: Hello, thank you for your question. With the acceleration of the integrated process in the industry, the increase in market concentration has become a necessary trend. Large-scale chain institutions take advantage of the advantages of scale, brand influence, standardization services, etc. to occupy a larger market share. For many high-end institutions on the POP platform, only by differentiating strategies, deep-diving, and highlighting their unique strengths in many aspects, such as technical expertise, service characteristics, and product advantages, can we effectively enhance the price space of products and services, thereby taking root in the fierce market competition. At present, we continue to optimize the POP business by deepening cooperation with multi-dimensional rich businesses, improving platform supply capacity, and optimizing customer experience, to help businesses go through the cycle, seize market opportunities, and promote business development.

Speaker Change: But just any other children.

Speaker Change: Oh, yeah, So cochin-china Joshua says hockey's on do it yourself, there's whole APN she should.

Speaker Change: Gotcha, Yeah. So once you go okay. Yeah, clearly show you seem high HRD, Belgium, how food on the Ocean side, you called out favorable.

Speaker Change: So your public sounds old orchard since you've already in C O towards higher while it sounds simple.

Speaker Change: Central Algeria, being tortured society's, which one's home food her so what's happening in your system.

Speaker Change: This whole China gold goes out to you. So time here your food and you calculate you sure Julianna sit on some of those old southern jump in.

Speaker Change: Don't show them in Sushi, you'll have probably you won't go at all at all for new it sounds yeah. So how such a white sheet Keystone P&I, Cogent, Amit being Ohio to yet be truly it sounds you I'll tell you Joe cheap palaces onto your weight.

Speaker Change: Gen project.

Xing Jin: At the institutional level, we continue to deepen cooperation with leading and specialized institutions, establish closer cooperation relations, and provide targeted customization solutions to ensure that high-quality medical institutions are leading in the competitive environment. At the same time, through the strategy of city, institution, and brand, we optimize platform supply structure, achieve precise market demand, and improve overall supply efficiency. As industry consolidation accelerates, market concentration is inevitable. Large institutions are gaining greater market share due to their economics of scale, broad influence, and standardized service models. For many specialized medical aesthetic institutions on other platforms, a differentiator is key to highlighting their unique technical expertise, specialized services, and product offerings.

Speaker Change: So if you go to one woman Sushi said Hanmi towboat closer to go the whole. It's all generally go to medical education, Chico and central issue in terms of how they flow fine Turbo EOG, you'll all do go try Giulio I need it on your own partially.

Speaker Change: Partially true torture towards her Chico corruption genre Central Australia, you'll watch it in high school Jojo Suzanne children. She paces Archie Joel can you got someone who's going to show you.

Speaker Change: I think the consolidation accelerates mark whose concentration.

Speaker Change: Uh huh.

Speaker Change: I'm doing great.

Speaker Change: Sure.

Speaker Change: Their economic of scale brought influence I understand our dine in service.

Speaker Change: My name is specialized market medical aesthetic institutions.

Speaker Change: Uh Huh it's.

Speaker Change: It's really it hurts Q2 highlights.

Speaker Change: Technical expertise specialized services and product offerings.

Xing Jin: With these differentiators, they can increase their pricing power and secure a solid foothold in a fiercely competitive market. We continue to optimize our platform business by empowering plastic institutions across multiple dimensions, deepening partnerships, reinforcing platform capabilities, and improving the user experience. These efforts help institutions navigate market cycles, capitalize on opportunities, and achieve sustainable business growth. For institutions, we continue to strengthen partnerships with top-tier and specialized medical aesthetic institutions, fostering closer collaboration through tailor-made solutions that empower them to ensure that they maintain their leadership in a competitive market. Through a segmentation strategy that targets different cities, institutions, and service offerings, we optimize our supply structure to better match market demand and supply, improving the overall efficiency of our platform.

Speaker Change: Just appreciate her they can increase their pricing power and secure.

Speaker Change: Yes, it's a competitive market.

Speaker Change: We continue to optimize our platform business in.

Speaker Change: In Paris.

Speaker Change: Across multiple dimensions.

Speaker Change: Some partnership.

Speaker Change: And platform capabilities and I'm sure really user experience.

Speaker Change: This effort.

Speaker Change: Navigate market cycles capitalized on opportunities.

Speaker Change: That's correct.

Speaker Change: So institution, we continue to strengthen partnerships with top tier and specialized medical aesthetic.

Speaker Change: Institution, both turbine closer collaboration tailor made solutions that empower them to ensure that they maintain their leadership and their competitive markets.

Speaker Change: Segmentation strategy, that's targa is different institutions.

Speaker Change: Institutions think service offerings, so optimize our support structure to better match market demand and supply improving the overall efficiency of our platform.

Xing Jin: In the supplementary operation, we stick to economic management, combine user behavior data, optimize supplementary strategies, and continue to optimize user paths at the end of the app, shorten the decision cycle, and improve user conversion rates. In addition, we rely on good clothes and good products. We provide personalized medical and beauty products and service recommendations for users, further improve user satisfaction, while driving an increase in customer prices. At the end of the user, we continue to strengthen private operations. We expand user groups through private marketing, buy-and-sell, and other methods, increase user connectivity, and activate long-term value, help medical and beauty organizations to expand their customers, and discover potential growth.

Speaker Change: So I would tell you so colon cancer kills you walk by leap.

Speaker Change: And of course, there we showed you you'll have with your children.

Speaker Change: So I have to point C, Ohio solo two short ones you towards OTT. So we go who hardly survive. It what are your hopes and xiaomi or Norway or who to go of course, you'll have that you've made some people food, which is G. 14 show you, who tortured title could any other T cell.

Speaker Change: Who do I one in Portland, So I see you your tour city.

Speaker Change: National debate on closer towards that you're watching T. J majority over there and shoot G. Hautes highway jobs bunzl image, you'll go towards them coaching larger it sounds actually sorry, and so usually that you chose to go shop or maybe you don't you don't generally go post.

Xing Jin: Under the promotion of this series of proposals, we have achieved stage-level results. At the same time, the annual framework agreement, the signed amount, and the signed progress are good, which fully verifies the effectiveness of our strategy. Looking ahead, we will continue to optimize the platform ecosystem, deepen cooperation with registration agencies, enhance user experience, and jointly promote long-term health development in the industry. In terms of patients, we are here to refine management practices. leveraging user behavior data to optimize subsidy plan. Additionally, we continue to enhance the user journey on our app, shorten decision-making time, and increase consumption rates.

Speaker Change: Yeah. It all comes out you eat children's you who attended the Cinzano Sofa. He has a lot of women and children shall issue. It's a long way like women junk. So as you watch and has shown that so why would you go to talk to you. So you wouldn't get Oh twiddle tongue.

Speaker Change: She took her father.

Speaker Change: Sometimes it's tricia.

Speaker Change: Fishing.

Speaker Change: Territory.

Practices never.

Speaker Change: Yeah.

Speaker Change: Uh huh.

Speaker Change: Subsidy prime Additionally by country.

Speaker Change: They use the journey, our App shorten decision, making time.

Speaker Change: Sure.

Xing Jin: Furthermore, through the Good Doctor, Good Product initiative, we provide personalized recommendations for medical aesthetic products and services, further enhancing user satisfaction while increasing transaction value. On the user side, we are continuously strengthening our private domain operations, expanding our user base through private domain marketing and influencer-driven referrals. These efforts enhance our user engagement, unlock customers' LTV, and help medical aesthetic institutions reach a broader audience and drive more growth. Driven by these initiatives, we have achieved notable results at this period. Meanwhile, in terms of annual framework agreements, we are making strong progress in both volume and program.

Speaker Change: Furthermore.

Speaker Change: So the Doctor goes product initiative, we provide personalized recommendations for medical aesthetic products and services Bulgari housing.

Speaker Change: Well in crazy in transaction value.

Speaker Change: They use our site we are continuously strengthening our permits domain.

Speaker Change: Operations, expanding our user base.

Speaker Change: Marketing and even fly Centurylink before this.

Speaker Change: Yeah.

Speaker Change: Sure engagement unlock customer sat with TV and how medical aesthetic institutions.

Speaker Change: Yes and to drive more growth.

Speaker Change: Driven by these initiatives we have achieved notable resource at this period. Meanwhile, in terms of annual framework agreements, we are making strong progress in both.

Speaker Change: And progress.

Xing Jin: for further validating the effectiveness of our strategy. Looking ahead, we will continue to enhance our platform ecosystem, strengthen collaboration with institutions, and improve the user experience, fostering the long-term sustainable development of the industry. Xie Xie. Thank you.

Speaker Change: Further validation of the effectiveness of our.

Speaker Change: Our strategy looking ahead, we will continue to enhance our platform ecosystem strengthen collaboration.

Speaker Change: And improved user experience fostering theyre long term sustainable with a lot of money.

Speaker Change: Sure.

Speaker Change: Oh sure sure. Thank you.

Speaker Change: Thank you and our next question today comes from ebay Li with <unk> Securities. Please go ahead.

Yibing Li: And our next question today comes from Yibing Li with Haitong Securities. Please go ahead. Good evening, everyone. Thank you for the opportunity to ask questions. I would like to ask about the chain business. As far as I know, we have opened 19 stores in China.

Speaker Change: Okay.

Speaker Change: That's a hot dog or anything like that Oh, My gosh, you can achieve.

Speaker Change: Good day and she has done exactly what you think you might use it.

Speaker Change: And what more can be actually isn't salmon yeah no.

Speaker Change: Yeah. Good question and go through them I'm Damn Goofy Ocean market.

Yibing Li: Do you have any different strategies and ways of doing business Let me translate myself. We are glad to say that So-Young has opened 19 aesthetic centers as of Q4. So how does the company adapt its strategies and operations for centers at different stages of development? Thank you.

Speaker Change: I forgot that one.

Speaker Change: Let me translate myself.

Speaker Change: And I'm very glad to see that so young has opened 19 aesthetics interests as well.

Speaker Change: How does the company adapt it strategy and operations for Suntrust and defer.

Speaker Change: Did you Oh development. Thank you.

Xing Jin: Hello, thank you for your question. We have developed a diversified operating strategy to ensure that the stores in each stage can achieve the best operating efficiency and continue to improve the brand influence and user experience. As for the starting period, which is 0 to 3 months, the core goal is to establish brand awareness, so that the target customers within a 5-kilometer radius can quickly know and understand XinYang Self-Support Center. We carry out a standardized operation process and conduct a large number of training and rigorous assessments for doctors, nurses, consultants, and other service personnel during the team-building process to control every detail of the service.

Speaker Change: Uh huh.

Speaker Change: Well maintenance into it put her father that you're doing them and did so do you like how you hardly even sort of each about because you've owned them and did doughnuts are hitting to each other to shelley so shaky so comparison.

Speaker Change: Yes.

Speaker Change: So you reach it but she doesn't even though some of them India.

Speaker Change: So as you move Illinois facility.

Speaker Change: So there weren't you finally made a mobile cushing quite shortz's shocked even Algeria lets see okay sure well mandatory she was Belgium, totally which home sites, which in time to execute the way you show horses. So she should do a four day on culture and talent.

Speaker Change: And go called Cool Bar called me you go through what she did.

Xing Jin: Based on XinYang's 12-year industrial development, we have established a multi-million user private community so that we can directly target end-users, thereby greatly reducing the cost of marketing. At this stage, we highly value the experience management of end-users and strictly control the waiting time, optimize user reviews, and quickly create high-quality store images and enhance the reputation of the store to lay the foundation for subsequent customers. The implement differentiated operational strategy of blind STD centers at various phase of development to ensure they can reach their optimal performance, while continuously increasing blind influence and enhancing their effectiveness. for athletic centers in the Red Mountain range, which lasts about three miles from Oakland.

Charlotte: It was you know Charlotte.

Charlotte: Well in general Oh, who that sees so you're searching.

Charlotte: All of them and then go to church with agile Joel towards your downtown D.

Charlotte: But so I'd say you did what well known called which also shows a cohort that young Kwon young locals have chosen to lessors hung you'll walk you'll hawking yeah horses. Its I don't want to implement on the whole kitted high quite a short answer all your options to do you've also don't turn pushing Chau Cheng Cheng Cheng.

Charlotte: The coast Horseshoe cardio sounded Donald useful.

Charlotte: Seeing prelaunch depreciated.

Charlotte: And our strategy.

Charlotte: Gosh.

Charlotte: That's very strange smells department to ensure they can reach their optimal well.

Charlotte: Well continuously.

Speaker Change: Oh I'm sorry.

Speaker Change: [noise] athletic centers when they run out.

Speaker Change: We lost about three miles from.

Xing Jin: The main goal is to build broad awareness and ensure that target customers within a five kilometer radius recognize So-Young's athletic center. We follow SOPs while building the team, providing comprehensive training and strict assessment of doctors, nurses, and consultants to ensure service quality at every stage. With 12 years of industry experience, So-Young has built a private domain community of 1 million users for service retention and engagement with initial customers and significantly lowering market costs. At this point, we focus on delivering an outstanding experience to initial customers, minimizing waiting times, improving customer reviews, and quickly building an extraordinarily high quality aesthetic center image through major portal platforms like Meituan Dianping.

The mango is to build brand awareness and ensure that target customers.

Speaker Change: Five kilometer radius recognized.

Speaker Change: So it takes sometimes we fall, though I felt piece while building the team providing comprehensive training and strict assessment doctors nurses and sometimes.

Speaker Change: Sure service quality at every stage at least 12 years of industry experience. So we all have to deal with a private domain community of Montana and users for Sharon.

Speaker Change: Engagement.

Speaker Change: And second I have a sense of lowering costs.

Speaker Change: At this point, we focus on them.

Speaker Change: I'll start and Crs two initial customers minimizing waiting times, improving customer reviews and quickly building extraordinary high quality central image. So a major in Portugal platform like may trying to them. So they have always have strengthened.

Xing Jin: These efforts helped strengthen our online reputation and established a solid foundation for long-term customer acquisition and retention. As we enter the growth period, which is from the fourth month to the twelfth month, our branch has started to move from brand construction to efficiency optimization. We focus on the quality of medical delivery and customer survival. We strengthen the old-customer hook-up and the old-generation new mechanism to enhance the value of customer life cycle. At the same time, we gradually balance the efficiency of business and optimize financial performance. Most branches have a stable business foundation at this stage and have been able to achieve positive progress for several months.

Speaker Change: <unk> reputation and established a solid foundation for a long time customer acquisition and retention.

Speaker Change: Two children. She does she told you you said that you thought is Charlotte.

Speaker Change: Mindy and crashes whole can packages. So Sean showed you Johan go to school.

It's only in Guangzhou, you know, Jeff watching out carefully, which one woman Georgetown law cough, we'll go out I think he said.

Speaker Change: E T cell cohort so what she Johnson posted it Joe Wolk, who is your shoulder you'll watch how old gosh, it top of them and did so I take it you do it you Czubay lenticular yeah, what's useful even though it goes through <expletive>, yeah sure sure that citizenship.

Xing Jin: As aesthetic centers enter the growth phase, which lasts from the 4th month to the 12th month after opening, the focus shifts from blood building to optimizing operational efficiency. with an emphasis on service quality and customer retention. We strengthen repeat customer engagement and referral programs to maximize customer lifetime value while gradually balancing operational efficiency to improve financial performance. To this point, most athletic centers have established a stable business foundation and are able to generate several consecutive months of positive cash flow. When the store enters the maturity period, which is more than 12 months after opening, the focus will shift to the long-term customer life cycle and product structure optimization to ensure the continuous health development of the business.

Speaker Change: And that takes then I'm sure they'd go straight which worked from their phone from mouse to the trough mouse after Oklahoma if okay.

Speaker Change: Cause shifts from glass building optimizing operational efficiency with.

Speaker Change: All service quality and customer retention, we strengthen customer engagement and referral programs to maximize customer lifetime value well gradually rebalancing.

Speaker Change: Patients They dream show financial performance today's point, most athletic centers have established a stable business foundation and are able to generate.

Speaker Change: Hi, its actually came up close to a cash flow.

Speaker Change: Tom and Dan to its host which he.

Speaker Change: Charlotte even shop, So, Indiana Jones, saying you don't touch your coach and then suddenly you don't you Gwen Scorpion chunky as well do you want you trip all year with that so she said with hope at that time said you'd want to call them, telling you two cohorts shelf absolute shall faith, you shelving shovel, but in total it will show you. The cohort do you have a bunch of money.

Xing Jin: At this stage, we will divide the customer into layers based on customer consumption frequency, consumption amount, consumption project, etc. For the characteristics and needs of different levels of customers, we have carefully devised a diversified service strategy. Through this type of layer-by-layer operation strategy, we can deeply dig into the potential of each level of customers and enhance the loyalty of users, thereby effectively improving the lifelong value of customers. The aesthetic centers reached their maturity phase 12 months after the opening. The focus moves to long-term customer lifecycle management. to ensure sustained business growth. At this phase, we implement customer segmentation.

Speaker Change: Simply put hotels do you Cook would I put it as usual chasing deals how you're comfortable without it somewhat silly thing. So he's heard your central watch it could how would you cope with.

Speaker Change: Gotcha Hotel total due tomorrow, you'll shaoqi show cohorts also chances.

Speaker Change: Yeah.

Speaker Change: That takes centers reach they mature to phrase 12 months after they open before Christmas to long term customer lifecycle management.

Speaker Change: Compensation to ensure sustained business growth as well.

Speaker Change: This phrase wait and Siemens customer segmentation.

Xing Jin: We developed frequency, spending models, past service records, and other data. We then developed tailored services. of different customer groups. By adopting this segmented operational plan, we can enhance customer loyalty and effectively increase customer lifetime value. Through this well-structured strategy, we can ensure that our branded aesthetic centers and different trades grow progressively, achieve their operational goals, and continuously strengthen our brand influence and competitiveness in demand. Through this series of strategies, we ensure that stores at different stages can grow steadily, achieve business goals, and continue to enhance the market influence and competitiveness of brands. Through these well-structured strategies, we can ensure that our branded aesthetic centers and different trades grow progressively, achieve their operational goals, and continuously strengthen our brand's influence and competitiveness in the market.

Speaker Change: Charles frequently spending almost half the service workforce and other data. We'd then you divide up the payload.

Speaker Change: [noise] of different customer goes by adopting this segmented operational.

Speaker Change: Kind of in house customer loyalty and effectively increase customer lifetime value. So what Israel structure strategy, we can ensure that our branded athletic centers and different freescale progressively achieved their operational costs and continued strength in our blood as well as competitive and they send them.

Speaker Change: Okay.

Speaker Change: Homegoods say you she lives or mature about put hold you're doing them and they don't know what she said.

Speaker Change: Maybe I'll toss it sushi, so chomping behind us just how you're telling me you're continually.

Speaker Change: Yes.

Speaker Change: So there's real structured strategy, we can ensure that our branded athletic centers and different phrase grilled program simply achieve their operational golf and country as they strengthen our garage influenced and competitiveness in the market.

Speaker Change: Sure sure. Thank you.

Speaker Change: Yeah.

Xing Jin: Okay, thank you, President Jin.

Speaker Change: Okay.

Speaker Change: Now would you be.

Unnamed Speaker: I have a small question about chain business. I'd like to ask how the company sees the growth of chain business. Can it maintain it?

Speaker Change: Good.

Speaker Change: That's what you would have thought that agreement to Scoop, you can kind of jump I guess, what you think oh I'm in for Bob.

Unnamed Speaker: It's a question about sustainability. Let me translate myself. Can us, Aesthetic Center's business, maintain growth? Thank you.

Speaker Change: While you do that you can go.

Speaker Change: Let me translate myself.

Speaker Change: Uh huh.

Speaker Change: And that takes into its business in Haynesville.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Hey.

Xing Jin: In my opinion, the growth of XinYang's chain business is sustainable. From a market perspective, there are more than 20,000 institutions in the domestic E-commerce market, but the proportion of chainization is extremely low. Not a single brand has more than 100 stores, which is 1% of the market share. There is a lot of room for chainization. The development of the Korean E-commerce market is very valuable. In Korea, the E-commerce industry is highly developed and highly chainized. The market share of chain brands is more than 10%. Successful experience shows that as consumers' awareness and acceptance of E-commerce continue to improve, the chain model can gain greater market share through brand influence, scale effect, and professional service system.

Speaker Change: That's helpful color I'm not sure I actually ill chosen so cheap it's a shooting a leader towards as a whole bunch, although fishy, which ankle and then you may see as high yields how call out lunch outlets. You go that's really actual hobby D. G D Mayo each option pilots, how what ebay did cheap FMT, that's just dilute the OCA and Nash.

Jeff: So hard to call, Jeff and Tom how well your Mrs. Hulme finds under leasehold you do something called Johnson, so hungry or email.

Speaker Change: You bet.

Speaker Change: Five out of Chile, actual household junk al Nasser opium hydro sit on cellular lesions hold up anguish choose how long do you. Even got me. She was a shelf as you laid out you're going to do well its usual, Duke who don't you. So theres almost no gold King Tim Howard County, Grandma's, Shelly Sarnia 40, she doesn't usage corridor go in Dallas, just hopped on.

Speaker Change: Sure.

Xing Jin: In my view, So-Young's aesthetic center network has the capability for sustained growth. From a market-wide perspective, there are currently over 20,000 medical aesthetic institutions in China, but the penetration rate of chain clinics remains extremely low, with no single brand exceeding 100 locations, representing just a 1% market share. This leaves ample room for expansion. The development of South Korea's medical aesthetic industry serves as a valuable reference, as the sector is highly developed, with chain brands collectively holding a market share exceeding 10%. Software's case domain treats that as customer awareness and acceptance of medical aesthetics grow. The chain model can leverage broad influence, economics of scale, and a professional service system to capture a larger market share.

Speaker Change: In my view Storehouse Athletic Center of Excellence has come up a lot too for sustained growth from Archeage wide perspective, they are carbon through overtime.

Speaker Change:

Speaker Change: China.

Speaker Change: The penetration rate of churn clinics remains extremely low with no single abroad exiting 100 locations, representing just a 1% market share. This leaves ample room for expansion.

So start careers medical as that had industry serve as a valuable reference as the sector is highly.

Speaker Change: With chamber is clamber collectively holding and market share exceeding 10%.

Speaker Change: South Korea is case to mass truth that as customer awareness and acceptance of medical aesthetics grill, They train mono caliber ridge providing for life.

Speaker Change: I'll make some scale and professional services to capture a larger market share.

Speaker Change: She also more suicides coalesce at home. So it's yeah torches you chose early that's high Ohio suite.

Xing Jin: Xinyang's chain model has shown a very competitive advantage in the domestic market.

Xing Jin: At present, the operating model of most traditional medical institutions in China adopts the hotel logic, and is heavily dependent on star chefs within the institution, i.e. a small number of core doctors. Once a key doctor is missing, the business volume, customer trust, and market reputation of the institution will be severely damaged, and the anti-risk ability will be weakened. The operating model adopted in this project is the fast-food logic. Its core advantage lies in the construction and promotion of a standardized service system. From the customer service process, to the technical operation standards, to the selection standards of American products, each step is carefully polished and strictly unified.

Speaker Change: Call. It all short trying to hold you makes you go to your home or should tie all our fidelity.

Speaker Change: So eli its Hugo laid on mutual Nacho cheese sauce Shaw Christian So you don't I'm going to use somebody else's do you go to your well ill cohort do you Jesus Uncle Bay, those young its all sorts of California.

Speaker Change: Oh, Fujian only child rule, you trip with holder should see unusual.

Speaker Change: Hi, how are you able or should see quite Hollywood Chi Chi which endorses.

Speaker Change: Belgium half what T. J said Tupac tone cohorts you that it was her image he shows hydro groups I.

Speaker Change: You May champion does show, you'll Gilgit, Mexico, why don't you go chasing them or younger with what you saw there.

Xing Jin: So-Young's chain model presents a highly competitive and differentiated edge in the domestic market.

Speaker Change: So we have channel adult prisons are highly competitive and differentiated ACH in the domestic market currently most of the traditional institutions.

Xing Jin: Currently, most traditional institutions follow a restaurant model, where operations rely heavily on a few key doctors, similar to how restaurants rely on seasoned chefs. If these doctors leave, the institution suffers a decline in sales volume, loss of customer trust and damage to its market reputation, making it highly vulnerable to risk. In contrast, So-Young's athletic centers adopt a fast-food model, where the cost lies in the establishment and expansion of a uniform service. Every aspect of operations, from customer reception, medical procedure, protocols to product selection standards, is thoughtfully defined and standardized. This standardized service brings a variety of advantages.

Speaker Change: H restaurants model, where operations rely heavily on it feels.

Speaker Change: Similar to how restaurants rely on Susan's chess if these doctors leave the institution suffers a decline in south volume most of it.

Speaker Change: Customer trust and damage to a smart reputation, making it highly vulnerable to risks.

Speaker Change: In contrast, somebody else asked that takes centers adopt it fast food model, we already closed tread life.

Speaker Change: Establishment and expansion of a unit from service system.

Speaker Change: Effect of operation from customer reception.

Speaker Change: Called procedures and protocols to project selection standards.

Speaker Change: So I.

Speaker Change: I understand our dies.

Speaker Change: So don't Belgium, HIFU Tyler no touch where he also so she will lose shelf is essential not you Josh Your line is open.

Xing Jin: First, customers can enjoy a high-quality and stable medical service experience It greatly improves user satisfaction and brand loyalty. Second, standardization reduces the over-reliance on certain doctors' individual skills, so that the institution is no longer subject to the changes of individual doctors, and enhances the stability and anti-risk capabilities of the operation. Third, the highly standardized model provides a solid foundation for the rapid scalability and expansion of XinYang Chain, and ensures the sustainability of growth, so that we can lead in the future market competition. This uniform approach offers multiple advantages. First, it ensures that regardless of which So-Young Aesthetic Center a customer visits, they receive a consistent, high-quality, and reliable medical aesthetics experience, significantly enhancing customer satisfaction and bright loyalty.

Speaker Change: So we shall see what the options as we go to the deal that you make for which he or she thought he saw a overnight you don't pin pads also.

Speaker Change: She's a delta of what John do you a lot of utility you don't Cookie issued a call to your life. So that you go which I soldier he could be used under the pillow Sunshine luxury even though in D. C. You called Fujian elite touch a cultural Belgium Holland was they hit on the I saw the casual game will have which of course don't do you call a chance to tissue valves.

Speaker Change: It sounds honest so she shoot young woman uncle Diverticulitis Sudan. She was also partially shouldn't debate.

Speaker Change: There's even if I'm up shows first smart call advantaged.

Speaker Change: Sure stay regardless, though rich.

Speaker Change: That takes some time and customer basis, they received a consistent high quality and reliable and that of course that takes experience.

Speaker Change: And housing customer satisfaction and brand loyalty second it reduces our dependency on individual doctors proficiency.

Xing Jin: Second, it reduces dependency on an individual doctor's proficiency. providing institutions from being overly affected by staff turnover, thereby improving operational stability and reducing risk. Lastly, this highly standardized model creates a solid foundation for rapid scaling and replication, ensuring long-term growth.

Speaker Change: Prorating, our institutions from being overly affected by staff turnover, thereby improving operational stability and reducing risk lastly, there's hardly a standardized model creates a solid foundation for rapid scouting and reputation.

Speaker Change: Long term growth. Thus we are confident we can attain.

Xing Jin: Thus, we are confident we can maintain a leading position in this highly competitive market. Xiexie. Thank you.

Speaker Change: Erase invitation or they come back to market.

Speaker Change: Sure sure. Thank you.

Speaker Change: Yeah.

Speaker Change: Thank you and our next question today comes from Jim Barrett.

Jim Peng: And our next question today comes from Jim Peng at CITIC Securities. Please go ahead.

Jim Barrett: CRC Securities. Please go ahead.

Speaker Change: Okay.

Jim Peng: Hello, Jim, your line is open. Please proceed. Okay, can you hear me? I don't hate you.

Speaker Change: Hello, Jim Your line is open. Please proceed.

Speaker Change: Okay. Okay.

Speaker Change: Uh huh.

Jim Peng: First of all, let me introduce myself.

Speaker Change: Okay.

Speaker Change: Thank you Shannon.

He Juntai: I'm He Juntai from Zhongxinchain. I'd like to ask you a few questions. As you can see, our company has made a lot of investments in upstream enterprises. So I'd like to ask you a few questions about our future plans and expectations for upstream enterprises. Okay, so let me just briefly translate for myself.

Speaker Change: I think you mentioned that.

Speaker Change: Okay.

Speaker Change: Hey, Dan to Australia.

Speaker Change: Well, you should kind of all the macro issues that Jeff.

Speaker Change: Have you thought it wasn't yet so you'd be out of town.

Speaker Change: You guys have some yield that you would add that as well.

Speaker Change: Well, okay. So let me just briefly translate for myself so.

He Juntai: So I'm Jason from City Security. Thank you for taking my question. So I have one question about the company's upstream business. So as we can see, we have acquired Miracle Laser in China. And we have multiple partnerships with the upstream companies. So what is our strategy for our upstream business in general? Thank you. That's my question.

Speaker Change: And it sounds like from <unk> Securities. Thank you.

Speaker Change: So I have one question about sky companies I've seen finish so because we have the parts.

Speaker Change: The Nashville, neither in China, and we have multiple partnerships.

Speaker Change: <unk> companies. So what is our strategy for our.

<unk> opinions Apple in general.

Speaker Change: That's my question.

Speaker Change: Yeah.

Xing Jin: Hello, thank you for your question. Recently, XinYang has successfully completed the comprehensive management work of the control company QiZhiJiguang. QiZhiJiguang, as the leading light power medical equipment service provider in China, has strong technical strength and market advantages. Based on XinYang's future strategic layout and planning for the upstream market, to achieve high-efficiency integration of resources and promote business coordination, QiZhiJiguang is now included in the upstream business system. The focus is on the integration of core talent teams. In the light power section, the company will rely on QiZhiJiguang for the core business foundation, combine market demand for product upgrades and technology innovation, enhance technology and product storage.

Speaker Change: Hey, yeah sitting here that you're right.

Speaker Change: She Xiang she'll leave I'm totally cohorts, yet she said you've gone to the chimney and two in one job. She said you won't till Acorn TV. The quanta you know so they lay for what he was all hulio a chunk on the tissue sleep well, it's just how you should do.

Speaker Change: You should not rely they'll tell you what would you call out are you, saying it was just something that we want we shouldn't see the cultural cool children Shithole Shane Jones. She says she won't novel with cellular you would tee sheet children, who do well she was at its hard time do they go.

Speaker Change: So I've called in Bangkok, Costa Jaya Torches, you won't they force you to hear what's useful to US just how should show tissue, which I. Just showed you you're just trying to see some challenge usually your times Intubate. She was I saw you walk off at that time.

Xing Jin: With the integration of upstream business, product support will further promote the company's sustainable growth in the new business section of Funeng, Lianshuo, etc. We successfully completed the full integration of our subsidiary Miracle Laser, a leading provider of medical aesthetic laser devices in China, with strong technical expertise and market advantage. This move is part of So-Young's upstream business and long-term plan. To up-resource integration and enhance business synergies, Miracle Laser has now been incorporated into So-Young's upstream business unit. where they focus on integrating key talent and reinforcing team collaboration. In the medical aesthetic laser segment, Medical Laser will serve as the core foundation, driving product upgrades and innovation to meet market demand and enhance our technology and product portfolio.

Speaker Change: So you're saying you're junkie bufano, yeah sure the C O clock tree it'll also the cuts so she goes up.

Speaker Change: Recently successfully completed the full integration allows our subsidiary medical laser and a leading provider of medical aesthetic laser device.

Speaker Change: With strong technical expertise and market and watch.

Speaker Change: This move is part of <unk>.

Speaker Change: Dream business and a long term play.

Speaker Change: Two three.

Speaker Change: Resource Pegylation any house business synergies American laser has now being incorporated into Stonehouse upstream business unit.

Speaker Change: They focused on integrating key talent and reinforcing team collaboration in the medical.

Speaker Change: Our medical laser will survive stay cool foundation, driving product upgrades and innovation to meet market demand the house all of our technology and product portfolio.

Xing Jin: As the upstream business continues to expand, our product resources will further empower aesthetic centers, driving sustainable growth for the company. Based on this, we believe that the main development strategy for the future is to strengthen the research and development of high-end marketing products. Through a deep investigation of market demand, analysis of consumer preferences, and a close-knit approach to the front-end technology of the US-U.S. industry, we will do our best to invest in professional research and development resources, and strive to create a series of high-quality, innovative, and market-appropriate high-end US-U.S. products to meet the high-end and personalized needs of different consumers.

Speaker Change: And state upstream business continues to expand our product suite.

Speaker Change: How for athletic centers driving sustainable growth company.

Speaker Change: Choose hey, I'm, sorry overlap.

Speaker Change: <unk> yourself either trulia.

Speaker Change: Women's young child chunk, Colorado's harsh I'll talk to the young Tolga a single would tell you is just how essential cause yourself is up here.

Speaker Change: The teacher Hollywood changes, which you should Charlie total China, Yeah, absolutely silly thoughts I'll, usually a G O transition culture, So cheerful who else is on schedule to go down even at a time in.

Speaker Change: I mean, my job with hotels.

Speaker Change: Huntington Ocado Hawk, because you want your tool.

Xing Jin: Based on this, our upstream business will focus on several key strategies. First, we will enhance the R&D of high-end and best-selling products by conducting in-depth market research, analyzing customer behavior, and staying ahead of industry trends. We will invest heavily in R&D to build a series of innovative, high-quality medical aesthetic products tailored to market needs. This will enable us to meet growing need for premium and personalized athletic solutions. In addition, we will strengthen the new integration of the flagship team and the XinYang team, play a unique advantage of the two teams, form a working model of high-efficiency coordination, improve the professionalism and execution ability of the entire team, and provide a solid talent base for upstream business development.

Speaker Change: Based on our upstream business will focus on several key strategies.

Speaker Change: Sure.

Speaker Change: We really have the R&D, Ohio.

Speaker Change: Sterling products by conducting in depth market research analyzing customer behavior and staying ahead of industry trade, we will invest heavily in R&D debuted a series of innovative high quality medical aesthetic products tailored to market needs.

Speaker Change: It's really enable us to meet really neat for premium and personalized athletic solution.

Speaker Change: They like women children and tosses all hauled she's a time do you see them under the symbol <unk>.

Speaker Change: So long time data also shows how the culture of the hold on Baltimore T cell. So as you're trying to do the trade issue, especially when you saw you will pause on tivo gesture their games hedges hoelscher.

Xing Jin: Subsequently, with the combination of strong resources and capabilities, we will focus on providing better and more stable product supply for XinYang chain business, from the variety of products, supply timelyness to product quality guarantee, and other aspects of the chain business, to improve the quality of service and market competitiveness, thereby realizing the continued development and expansion of XinYang in the US upstream market. Additionally, we will ensure a seamless integration between the Miracle Laser and So-Young International. Leveraging the UNIX model both sides to establish a high-efficient and collaborative working model. This will enhance the overall expertise and action-oriented capabilities, creating a solid talent foundation to support the growth of upstream business.

Speaker Change: P. J, it's a harder challenge I'll tell you, even though you also well know John So again huge elevated xi'an usually people.

Speaker Change: Chico cause you to go over time, because you chose hundreds of leasehold Purdue Gulfport. She says she tall challenge to lump all jump on Tau for me really the issue yeah, well for known shortly cheap T. So Fortunately you sit hunters only G. R. She said she owns I you may cellulose just Honda so she finds out even called zone.

Speaker Change: Additionally, we will ensure a seamless integration between American laser huh.

Speaker Change: Leveraging the unique so both sides three established a high efficient and clever came off it's really how stay over little extra cheese and action oriented capabilities great team at solar its tenants foundation to support the growth of upstream business.

Xing Jin: Following the team integration with the combined resources and enhanced capabilities, we will focus on providing So-Young's aesthetic center with a highly quality and more stable product supply. From expanding product variety and ensure delivery to strengthen assurance, we aim to empower our aesthetic center network and enhance its service quality and competitiveness. These efforts will drive So-Young's continued growth in the upstream sector.

Speaker Change: Following the Etame integration, let's say combined.

<unk>.

Speaker Change: We will focus on providing.

Speaker Change: That takes some time.

Speaker Change: Highly quality and more stable product supply.

Speaker Change: Expanding contacts liberace uninsured can ever reach with strength.

Speaker Change: Assortments with aim to empower.

Speaker Change: And so that takes some time, that's what I think the house its service quality and competitiveness.

Speaker Change: We don't drive somebody else continue to do it in the upstream sector.

Speaker Change: Thank you.

Speaker Change: Oh.

Xing Jin: Thank you.

Speaker Change: Thank you and our next question today comes from Harry ZOLL with Deutsche Bank. Please go ahead.

Harry Zhao: And our next question today comes from Harry Zhao with Deutsche Bank. Please go ahead. Good evening, Managing Director. Thank you for the opportunity to ask this question. Just now, you shared the guidance on income in 2025.

Speaker Change: Oh, well I didn't go away. So she said you've got to you when it's your way, but when it comes to I wanted to say Youll see challenges Oh boy, you source them and see which I won't go away as Shar just sit by and is incorporated essentially shotguns locals, where like the telegraph well just let me translate by myself Ah Thanks management for taking my.

Xing Jin: I would like to ask if you can share more about the future financial planning of the company. Thank you. Thank you, Henry, for your question. Looking ahead, we are committed to driving sustainable and high-quality growth through the execution of a vertical integration strategy. We have successfully established a full value chain, covering both upstream supply chain capabilities to downstream aesthetic treatment services, which creates synergies across our business units. This diversified and balanced model lays a strong foundation for long-term financial stability and operational resilience. For a financial, from a financial perspective, while near-term profitability may be impacted by the pace and scale of our new aesthetic center expansion, this business is critical to transitioning towards sustainable, high-quality growth.

Speaker Change: I imagine just gave the guidance of 2025 revenue guidance.

Speaker Change: Guidance and could the management share more insight into the company's financial outlook in the future. Thank you.

Speaker Change: Thank you have a follow up question I'm.

Speaker Change: Looking ahead, we are committed to driving sustainable and high quality growth through the execution of our vertical integration strategy. We have successfully established a full value chain, having both upstream supply chain capabilities to a downstream aesthetic treatment services, which.

Speaker Change: Creates synergies across our business units.

Speaker Change: They establish the fight and the balance the model lays a strong foundation for long term financial stability and operational resilience.

For financial from a financial perspective, while near term profitability may be impacted by the pace and scale of our new aesthetic center expansion. This business is critical to chance and transitioning towards sustainable high quality growth.

Xing Jin: We recognize that different business units are at different stages of development. Some high-growth initiatives, such as our athletic center business, have just begun to scale and improve operational efficiencies after the success of pilot projects. With healthy cash flow and a disciplined capital allocation approach, we will continue to invest in strategic initiatives that reinforce our market leadership while maintaining a prudent approach to cost management. Our focus remains on balancing growth with profitability, enhancing financial resilience, and ultimately driving long-term value for our shareholders. Thank you.

Speaker Change: Recognize that different business units are at different stages of development. Some high growth initiatives, such as our ethics centre business have just begun to scale and improve operational efficiencies. After the success of pilot projects.

Speaker Change: With healthy cash flow and disciplined capital allocation approach.

Speaker Change: We'll continue to invest in strategic initiatives that reinforce and reinforce our market leadership, while maintaining a prudent approach to cost management.

Speaker Change: Our focus remains balancing growth with profitability enhancing financial resilience and ultimately driving long term value for our shareholders.

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: Thank you.

Operator: And, ladies and gentlemen, this concludes today's question and answer session and today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day. © The Ultimate Parody Site!

Speaker Change: This concludes today's question answer session and today's conference call.

Speaker Change: We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yeah.