So-Young International, Inc. Q4 FY2024 earnings call

• Implemented vertical integration strategy, leveraging user base and upstream supply chain to drive expansion of aesthetic centers. • Opened 19 So-Young Clinics in nine core cities in Q4, with 11 aesthetic centers achieving positive monthly operating cash flow in December. • Aesthetic center business revenue surged 702% YOY to RMB 81.3 million, with over 38,000 verified paid visits and over 81,500 verified paid aesthetic treatments. • Beijing Head Aesthetic Center has matured with repeat customer revenue accounting for 88% of total revenue. • Shanghai Center in Super Brand Mall had over 2,000 monthly visits in its fifth month of operation with per square meter sales exceeding 10,000. • Served over 1,200 medical institutions with injectable solutions, with over 52,000 units shipped in Q4, up 20% sequentially. • POP business remained a key profit driver, generating stable earnings to support new business.

In the fourth quarter of 2024, total revenue was RMB 369.2 million. Net loss attributable to So-Young was RMB 607.6 million, while non-GAAP net loss was RMB 53.2 million. The aesthetic center business saw revenue surge to RMB 81.3 million during the quarter, representing a 702% year-over-year increase. For the full year 2024, total revenues were RMB 1.47 billion. Aesthetic treatment services revenues were RMB 169.3 million, up 1206.1% year-over-year. Sales of medical products and maintenance services were RMB 368 million, up 10.3% year-over-year.

• Expect total revenues for the first quarter of 2025 to be between RMB 280 million and RMB 300 million. • Committed to vertical integration strategy to capitalize on new growth opportunities, diversify revenue streams, and drive sustainable growth.

• Potential risks and uncertainties outlined in public filings with the SEC, including those in the annual report on Form 20F. • Risks related to market competition, operational execution, and potential impact of goodwill impairment.

Q: Related to the POP business and what are the latest developments in merchant support and empowering on your platform during the industry consolidation period?

A: As industry consolidation accelerates, optimized platform business by empowering aesthetic institutions across multiple dimensions, deepening partnerships, reinforcing platform capabilities, and improving user experience.

Q: How does the aesthetic centers business maintain growth?

A: So-Young's aesthetic center network has growth potential due to low market penetration of chain clinics in China, with the chain model offering advantages over traditional institutions in terms of standardized service.

Q: Strategy for the upstream business?

A: Successfully integrated subsidiary Miracle Laser, focusing on enhancing R&D of high-end products, integrating resources, and empowering aesthetic centers with stable product supply.

Q: Insights into future financial outlooks?

A: Committed to vertical integration strategy, with new aesthetic center expansion impacting near-term profitability but laying foundation for long-term sustainable growth.