So-Young International’s Earnings Call: Growth Amid Challenges

So-Young International ((SY)) has held its Q1 earnings call. Read on for the main highlights of the call.

The recent earnings call for So-Young International painted a picture of mixed performance outcomes, with significant growth in certain areas counterbalanced by declines in others. The company reported substantial growth in aesthetic treatment services and maintained high customer satisfaction levels, alongside a robust cash position and positive future outlook. However, these positives were tempered by a notable year-over-year decline in total revenues, increased net loss, and decreases in other revenue streams.

Significant Growth in Aesthetic Treatment Services

Aesthetic treatment services at So-Young International experienced a remarkable surge, with revenues reaching RMB98.8 million. This represents an impressive 551.4% increase year-over-year, primarily driven by the expansion of the company’s aesthetic center business.

Increase in Verified Paid Visits and Treatments

The company saw a significant rise in verified paid visits and treatments, with total visits exceeding 45,500, marking an 18.5% quarter-on-quarter and an 874.3% year-over-year increase. The total number of verified paid aesthetic treatments performed surpassed 92,900, reflecting a 14% quarter-on-quarter and 989.4% year-over-year growth.

High Customer Satisfaction

Customer satisfaction remains a strong point for So-Young, with ratings holding steady at 4.98 out of 5. This high level of satisfaction underscores the company’s commitment to delivering top-notch service.

Expansion of Aesthetic Centers

By the end of Q1, So-Young operated 23 clinic centers across nine major cities, with 18 of these centers achieving positive monthly operating cash flow. This expansion is a testament to the company’s strategic growth initiatives.

Robust Cash Position

The company reported a robust cash position, with cash and cash equivalents, restricted cash, and short-term investments totaling RMB1.1 billion as of March 31, 2025. This financial stability provides a solid foundation for future growth.

Positive Outlook for Aesthetic Treatment Services

Looking ahead, So-Young projects aesthetic treatment services revenues to range between RMB120 million and RMB140 million in Q2 2025. This forecast represents a 337.3% to 410.1% increase from the same period in 2024, indicating strong confidence in continued growth.

Decrease in Total Revenues

Despite the growth in aesthetic services, total revenues fell to RMB297.3 million, a 60.6% decline year-over-year. This decrease was mainly due to a reduction in the number of medical service providers subscribing to the company’s information services platform.

Increase in Net Loss

The net loss attributable to So-Young increased to RMB33.1 million, compared to RMB21.2 million in the previous year. This rise in net loss highlights the financial challenges the company faces despite its growth in certain areas.

Decline in Sales of Medical Products and Maintenance Services

Sales of medical products and maintenance services decreased to RMB55.6 million, down 35.7% year-over-year. This decline was primarily due to a reduction in order volume for medical equipment.

Decrease in Information Reservation Services Revenues

Revenues from information reservation services and other streams fell to RMB142.9 million, marking a 34.1% year-over-year decrease. This drop was largely attributed to fewer medical service providers subscribing to information services.

Forward-Looking Guidance

So-Young International’s forward-looking guidance remains optimistic, with expectations for continued growth in aesthetic treatment services. The company plans to expand its network and improve cost efficiency, drawing inspiration from strategies similar to Sam’s Club, focusing on proprietary products and supply chain management. This strategic direction aims to bolster future performance and capitalize on the burgeoning demand for aesthetic services.

In summary, So-Young International’s earnings call revealed a complex narrative of growth and challenges. While the company celebrates significant achievements in aesthetic treatment services and customer satisfaction, it also faces hurdles with declining total revenues and increased net loss. The forward-looking guidance suggests a positive trajectory, with strategic plans to enhance growth and efficiency. Investors and stakeholders will be keenly watching how these plans unfold in the coming quarters.