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So-Young Reports Unaudited Second Quarter 2024 Financial Results

August 23, 2024 | Last Trade: US$0.78 0.01 1.31

BEIJING, Aug. 23, 2024 /PRNewswire/ -- So-Young International Inc. (Nasdaq: SY) ("So-Young" or the "Company"), the largest and most vibrant social community in China for consumers, professionals and service providers in the medical aesthetics industry, today announced its unaudited financial results for the second quarter ended June 30, 2024.

Second Quarter 2024 Financial Highlights

  • Total revenues were RMB407.4 million (US$56.1 million[1]), compared with RMB412.1 million in the corresponding period of 2023, exceeding the high end of guidance.
  • Net income attributable to So-Young International Inc. was RMB18.9 million (US$2.6 million), compared with net loss attributable to So-Young International Inc. of RMB2.6 million in the same period of 2023.
  • Non-GAAP net income attributable to So-Young International Inc.[2] was RMB22.2 million (US$3.1 million), compared with non-GAAP net income attributable to So-Young International Inc. of RMB15.5 million in the same period of 2023.

Second Quarter 2024 Operational Highlights

  • Average mobile MAUs were 1.5 million, compared with 3.0 million in the second quarter of 2023.
  • Number of medical service providers subscribing to information services on So-Young's platform was 1,174, compared with 1,659 in the second quarter of 2023.
  • Total number of purchasing users through reservation services was 137.5 thousand and the aggregate value of medical aesthetic treatment transactions facilitated by So-Young's platform was RMB427.8 million.

Mr. Xing Jin, Co-Founder and Chief Executive Officer of So-Young, commented, "Our performance during the second quarter was solid with total revenue beating guidance on the back of a significant 22.6% year-over-year increase in sales of medical products and maintenance services. This solid performance is directly attributable to our strategic initiatives and ability to capitalize on industry trends and enhance the overall vertical integration and diversification of our business. We made significant progress in expanding our chain of clinics, opening 14 in prime commercial areas across eight core cities. Notably, our Beijing clinic continues to lead the industry in key operating metrics, including repeat customer rates and customer acquisition costs. We plan to swiftly replicate this proven model in other cities to further expand our offline footprint. Leveraging the reputational strength of our brand and extensive consumer behavior data, we have built a solid foundation to drive upstream product development and customization. Product sales continue to grow rapidly with a strong and diversified pipeline currently in development with our partners. Moving forward, we will continue to explore opportunities across the upstream, midstream and downstream sectors, solve industry pain points, and lead the industry towards a new era of quality medical aesthetics."

Mr. Hui Zhao, Chief Financial Officer of So-Young, added, "Growth during the quarter was fueled by the progress we made in integrating our platform across the medical aesthetic value chain. This not only promotes the high-quality and sustainable development of the industry, but also further strengthens our market position. As we accelerate the development of our new businesses, we will continue to prudently manage costs and enhance operational efficiency. We are confident that these strategic initiatives will continue to drive sustainable growth and enhance shareholder value over the long-term."

[1] This press release contains translations of certain Renminbi (RMB) amounts into U.S. dollars (US$) solely for the convenience of the reader. Unless otherwise specified, all translations of Renminbi amounts into U.S. dollar amounts in this press release are made at RMB7.2672 to US$1.00, which was the U.S. dollars middle rate announced by the Board of Governors of the Federal Reserve System of the United States on June 28, 2024.

[2] Non-GAAP net income/(loss) attributable to So-Young International Inc. is defined as net income/(loss) attributable to So-Young International Inc. excluding share-based compensation expenses attributable to So-Young International Inc. See "Reconciliation of GAAP and Non-GAAP Results" at the end of this press release.

Second Quarter 2024 Financial Results     

Revenues

Total revenues were RMB407.4 million (US$56.1 million), a decrease of 1.1% from RMB412.1 million in the same period of 2023. The decrease was primarily due to a decrease in the number of medical service providers subscribing to information services on So-Young's platform.

  • Information services and other revenues were RMB279.2 million (US$38.4 million), a decrease of 6.6% from RMB298.9 million in the same period of 2023. The decrease was primarily due to a decrease in the number of medical service providers subscribing to information services on So-Young's platform.
  • Reservation services revenues were RMB22.4 million (US$3.1 million), a decrease of 16.9% from RMB26.9 million in the same period of 2023. The decrease was primarily due to the policy change for commission rates and subsidies.
  • Sales of medical products and maintenance services were RMB105.8 million (US$14.6 million), an increase of 22.6% from RMB86.3 million in the same period of 2023, primarily due to an increase in the order volumes for cosmetic products.

Cost of Revenues

Cost of revenues was RMB155.1 million (US$21.3 million), an increase of 3.1% from RMB150.4 million in the second quarter of 2023. The increase was primarily due to an increase in costs associated with sales of cosmetic products. Cost of revenues included share-based compensation expenses of RMB0.2 million (US$0.0 million), compared with the share-based compensation expenses of RMB0.4 million in the corresponding period of 2023.

  • Cost of services and others were RMB101.9 million (US$14.0 million), a decrease of 4.4% from RMB106.5 million in the second quarter of 2023. The decrease was primarily due to a decrease in the cost of services associated with So-Young Prime.
  • Cost of medical products sold and maintenance services were RMB53.2 million (US$7.3 million), an increase of 21.3% from RMB43.9 million in the second quarter of 2023. The increase was primarily due to an increase in costs associated with the sales of cosmetic products.

Operating Expenses

Total operating expenses were RMB245.6 million (US$33.8 million), a decrease of 13.0% from RMB282.4 million in the second quarter of 2023.

  • Sales and marketing expenses were RMB132.3 million (US$18.2 million), a decrease of 4.1% from RMB137.9 million in the second quarter of 2023. The decrease was mainly due to a decrease in expenses associated with branding and user acquisition activities. Sales and marketing expenses included share-based compensation expenses of RMB0.2 million (US$0.0 million), compared with RMB0.8 million in the corresponding period of 2023.
  • General and administrative expenses were RMB70.8 million (US$9.7 million), a decrease of 23.3% from RMB92.3 million in the second quarter of 2023. The decrease was primarily due to decreases in share-based compensation expenses and professional consulting fees. General and administrative expenses included share-based compensation expenses of RMB2.0 million (US$0.3 million), compared with RMB15.5 million in the corresponding period of 2023. The decrease in share-based compensation expenses was due to the compensation costs of the restricted share units granted in 2023, which were fully recognized by the end of the first quarter of 2024.
  • Research and development expenses were RMB42.5 million (US$5.8 million), a decrease of 18.5% from RMB52.1 million in the second quarter of 2023. The decrease was primarily attributable to improvements in staff efficiency. Research and development expenses included share-based compensation expenses of RMB0.8 million (US$0.1 million), compared with RMB1.3 million in the corresponding period of 2023.

Income Tax Benefits

Income tax benefits were RMB2.6 million (US$0.4 million), compared with income tax benefits of RMB0.8 million in the same period of 2023.

Net Income/(Loss) Attributable to So-Young International Inc.

Net income attributable to So-Young International Inc. was RMB18.9 million (US$2.6 million), compared with a net loss attributable to So-Young International Inc. of RMB2.6 million in the second quarter of 2023.

Non-GAAP Net Income Attributable to So-Young International Inc.

Non-GAAP net income attributable to So-Young International Inc., which excludes the impact of share-based compensation expenses attributable to So-Young International Inc., was RMB22.2 million (US$3.1 million), compared with RMB15.5 million non-GAAP net income attributable to So-Young International Inc. in the same period of 2023.

Basic and Diluted Earnings/(Loss) per ADS

Basic and diluted earnings per ADS attributable to ordinary shareholders were RMB0.18 (US$0.02) and RMB0.18 (US$0.02), respectively, compared with basic and diluted loss per ADS attributable to ordinary shareholders of RMB0.02 and RMB0.02, respectively, in the same period of 2023.

Cash and Cash Equivalents, Restricted Cash and Term Deposits, Term Deposits and Short-Term Investments

As of June 30, 2024, cash and cash equivalents, restricted cash and term deposits, term deposits and short-term investments were RMB1,245.1 million (US$171.3 million), compared with RMB1,341.6 million as of December 31, 2023.

Business Outlook

For the third quarter of 2024, So-Young expects total revenues to be between RMB350.0 million (US$48.2 million) and RMB370.0 million (US$50.9 million), representing a 9.2% to 4.0% decrease from the same period in 2023. The above outlook is based on the current market conditions and reflects the Company's preliminary estimates of market and operating conditions, as well as customer demand, which are all subject to change.

Non-GAAP Financial Measures

To supplement the financial measures prepared in accordance with generally accepted accounting principles in the United States, or GAAP, this press release presents non-GAAP income/(loss) from operations and non-GAAP net income/(loss) attributable to So-Young International Inc. by excluding share-based compensation expenses from income/(loss) from operations and net income/(loss) attributable to So-Young International Inc., respectively. The Company believes these non-GAAP financial measures are important to help investors understand the Company's operating and financial performance, compare business trends among different reporting periods on a consistent basis and assess the Company's core operating results, as they exclude certain expenses that are not expected to result in cash payments. The use of the above non-GAAP financial measures has certain limitations. Share-based compensation expenses have been and will continue to be incurred in the future. All these are not reflected in the presentation of the non-GAAP financial measures, but should be considered in the overall evaluation of the Company's results. The Company compensates for these limitations by providing the relevant disclosure of its share-based compensation expenses in the reconciliations to the most directly comparable GAAP financial measures, which should be considered when evaluating the Company's performance. These non-GAAP financial measures should be considered in addition to financial measures prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, financial measures prepared in accordance with GAAP. Reconciliation of each of these non-GAAP financial measures to the most directly comparable GAAP financial measure is set forth at the end of this release.

Conference Call Information

So-Young's management will hold an earnings conference call on Friday, August 23, 2024, at 7:30 AM U.S. Eastern Time (7:30 PM on the same day, Beijing/Hong Kong Time). Dial-in details for the earnings conference call are as follows:

International:

+1-412-902-4272

Mainland China:

4001-201203

US:

+1-888-346-8982

Hong Kong:

+852-301-84992

Passcode:

So-Young International Inc.

A telephone replay will be available two hours after the conclusion of the conference call through 23:59 U.S. Eastern Time, August 30, 2024. The dial-in details are:

International:

+1-412-317-0088

US:

+1-877-344-7529

Passcode: 

3725692

Additionally, a live and archived webcast of this conference call will be available at http://ir.soyoung.com.

About So-Young International Inc.

So-Young International Inc. (Nasdaq: SY) is the largest and most vibrant social community in China for consumers, professionals and service providers in the medical aesthetics industry. The Company presents users with reliable information through offering high quality and trustworthy content together with a multitude of social functions on its platform, as well as by curating medical aesthetic service providers that are carefully selected and vetted. Leveraging So-Young's strong brand image, extensive audience reach, trust from its users, highly engaging social community and data insights, the Company is well-positioned to expand both along the medical aesthetic industry value chain and into the massive, fast-growing consumption healthcare service market.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Among other things, the Financial Guidance and quotations from management in this announcement, as well as So-Young's strategic and operational plans, contain forward-looking statements. So-Young may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about So-Young's beliefs and expectations, are forward-looking statements. Forward looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: So-Young's strategies; So-Young's future business development, financial condition and results of operations; So-Young's ability to retain and increase the number of users and medical service providers, and expand its service offerings; competition in the online medical aesthetic service industry; changes in So-Young's revenues, costs or expenditures; Chinese governmental policies and regulations relating to the online medical aesthetic service industry, general economic and business conditions globally and in China; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in the Company's filings with the Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of the press release, and So-Young undertakes no duty to update such information, except as required under applicable law.

For more information, please contact:

So-Young

Investor Relations
Ms. Mona Qiao
Phone: +86-10-8790-2012
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it. 

Christensen

In China
Ms. Dee Wang
Phone: +86-10-5900-1548
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it. 

In US
Ms. Linda Bergkamp
Phone: +1-480-614-3004
Email: This email address is being protected from spambots. You need JavaScript enabled to view it. 

SO-YOUNG INTERNATIONAL INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except for share and per share data)

 
 

As of

 

December 31,

 

June 30,

 

June 30,

2023

2024

2024

 

RMB

 

RMB

 

US$

Assets

     

Current assets:

     

Cash and cash equivalents

426,119

 

456,927

 

62,875

Restricted cash and term deposits

14,695

 

83,224

 

11,452

Trade receivables

57,219

 

81,585

 

11,226

Inventories

118,924

 

143,374

 

19,729

Receivables from online payment platforms

23,158

 

20,819

 

2,865

Amounts due from related parties

9,212

 

10,292

 

1,416

Term deposits and short-term investments

900,823

 

704,979

 

97,008

Prepayment and other current assets

171,774

 

237,267

 

32,649

Total current assets

1,721,924

 

1,738,467

 

239,220

Non-current assets:

     

Long-term investments

261,016

 

278,546

 

38,329

Intangible assets

145,253

 

133,104

 

18,316

Goodwill

540,693

 

540,693

 

74,402

Property and equipment, net

116,782

 

137,162

 

18,874

Deferred tax assets

78,034

 

80,626

 

11,095

Operating lease right-of-use assets

118,408

 

139,885

 

19,249

Other non-current assets

232,455

 

183,546

 

25,257

Total non-current assets

1,492,641

 

1,493,562

 

205,522

Total assets

3,214,565

 

3,232,029

 

444,742

      

Liabilities

     

Current liabilities:

     

Short-term borrowings

29,825

 

39,713

 

5,465

Taxes payable

56,894

 

57,567

 

7,921

Contract liabilities

103,374

 

95,656

 

13,163

Salary and welfare payables

86,290

 

79,716

 

10,969

Amounts due to related parties

388

 

138

 

19

Accrued expenses and other current
liabilities

233,913

 

249,175

 

34,287

Operating lease liabilities-current

29,739

 

27,482

 

3,782

Total current liabilities

540,423

 

549,447

 

75,606

Non-current liabilities:

     

Operating lease liabilities-non current

86,210

 

114,478

 

15,753

Deferred tax liabilities

25,082

 

21,342

 

2,937

Other non-current liabilities

1,536

 

1,610

 

222

Total non-current liabilities

112,828

 

137,430

 

18,912

Total liabilities

653,251

 

686,877

 

94,518

      
      

Shareholders' equity:

     

Treasury stock

(358,453)

 

(365,451)

 

(50,288)

Class A ordinary shares (US$0.0005 par value; 750,000,000
     shares authorized as of December 31, 2023 and June 30,
     2024; 73,688,044 and 63,422,436 shares issued and
     outstanding as of December 31, 2023, 77,387,894 and
     66,469,129 shares issued and outstanding as of June 30,
     2024, respectively)

238

 

251

 

35

Class B ordinary shares (US$ 0.0005 par value; 20,000,000
     shares authorized as of December 31, 2023 and June 30,
     2024; 12,000,000 shares issued and outstanding as of
     December 31, 2023 and June 30, 2024)

37

 

37

 

5

Additional paid-in capital

3,080,433

 

3,065,650

 

421,847

Statutory reserves

33,855

 

33,855

 

4,659

Accumulated deficit

(330,166)

 

(332,465)

 

(45,749)

Accumulated other comprehensive income

18,185

 

23,934

 

3,293

Total So-Young International Inc. shareholders' equity

2,444,129

 

2,425,811

 

333,802

Non-controlling interests

117,185

 

119,341

 

16,422

Total shareholders' equity

2,561,314

 

2,545,152

 

350,224

Total liabilities and shareholders' equity

3,214,565

 

3,232,029

 

444,742

SO-YOUNG INTERNATIONAL INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except for share and per share data)

 
 

For the Three Months Ended

 

For the Six Months Ended

 

June 30,
2023

 

June 30,
2024

 

June 30,
2024

 

June 30,
2023

 

June 30,
2024

 

June 30,
2024

 
 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 
             

Revenues:

            

Information services and others

298,879

 

279,216

 

38,421

 

509,163

 

487,964

 

67,146

 

Reservation services

26,903

 

22,356

 

3,076

 

56,584

 

45,420

 

6,250

 

Sales of medical products and maintenance services

86,284

 

105,808

 

14,560

 

156,422

 

192,278

 

26,458

 

Total revenues

412,066

 

407,380

 

56,057

 

722,169

 

725,662

 

99,854

 

Cost of revenues:

            

Cost of services and others

(106,519)

 

(101,853)

 

(14,015)

 

(188,019)

 

(176,075)

 

(24,229)

 

Cost of medical products sold and maintenance services

(43,859)

 

(53,198)

 

(7,320)

 

(76,080)

 

(96,291)

 

(13,250)

 

Total cost of revenues

(150,378)

 

(155,051)

 

(21,335)

 

(264,099)

 

(272,366)

 

(37,479)

 

Gross profit

261,688

 

252,329

 

34,722

 

458,070

 

453,296

 

62,375

 

Operating expenses:

            

Sales and marketing expenses

(137,921)

 

(132,308)

 

(18,206)

 

(250,432)

 

(245,564)

 

(33,791)

 

General and administrative expenses

(92,341)

 

(70,799)

 

(9,742)

 

(153,855)

 

(155,752)

 

(21,432)

 

Research and development expenses

(52,141)

 

(42,498)

 

(5,848)

 

(107,934)

 

(82,089)

 

(11,296)

 

Total operating expenses

(282,403)

 

(245,605)

 

(33,796)

 

(512,221)

 

(483,405)

 

(66,519)

 

(Loss)/Income from operations

(20,715)

 

6,724

 

926

 

(54,151)

 

(30,109)

 

(4,144)

 

Other income/(expenses):

            

Investment income, net

3,370

 

788

 

108

 

10,222

 

2,887

 

397

 

Interest income, net

13,966

 

11,718

 

1,612

 

25,893

 

24,031

 

3,307

 

Exchange (losses)/gains

(1,579)

 

16

 

2

 

(1,154)

 

410

 

56

 

Share of losses of equity method investee

(3,699)

 

(3,733)

 

(514)

 

(6,870)

 

(7,729)

 

(1,064)

 

Others, net

6,562

 

2,039

 

281

 

8,587

 

5,319

 

732

 

(Loss)/Income before tax

(2,095)

 

17,552

 

2,415

 

(17,473)

 

(5,191)

 

(716)

 

Income tax benefits

785

 

2,571

 

354

 

5,049

 

5,128

 

706

 

Net (loss)/income

(1,310)

 

20,123

 

2,769

 

(12,424)

 

(63)

 

(10)

 

Net income attributable to noncontrolling interests

(1,268)

 

(1,182)

 

(163)

 

(2,102)

 

(2,236)

 

(308)

 

Net (loss)/income attributable to So-Young International Inc.

(2,578)

 

18,941

 

2,606

 

(14,526)

 

(2,299)

 

(318)

 

SO-YOUNG INTERNATIONAL INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)

(Amounts in thousands, except for share and per share data)

 
 

For the Three Months Ended

 

For the Six Months Ended

 

June 30,
2023

 

June 30,
2024

 

June 30,
2024

 

June 30,
2023

 

June 30,
2024

 

June 30,
2024

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

            

Net (loss)/earnings per ordinary share

           

Net (loss)/earnings per ordinary share attributable to ordinary shareholder -
basic

(0.03)

 

0.24

 

0.03

 

(0.18)

 

(0.03)

 

(0.00)

Net (loss)/earnings per ordinary share attributable to ordinary shareholder -
     diluted

(0.03)

 

0.24

 

0.03

 

(0.18)

 

(0.03)

 

(0.00)

Net (loss)/earnings per ADS attributable to ordinary shareholders - basic (13
     ADS represents 10 Class A ordinary shares)

(0.02)

 

0.18

 

0.02

 

(0.14)

 

(0.02)

 

(0.00)

Net (loss)/earnings per ADS attributable to ordinary shareholders - diluted (13
     ADS represents 10 Class A ordinary shares)

(0.02)

 

0.18

 

0.02

 

(0.14)

 

(0.02)

 

(0.00)

Weighted average number of ordinary shares used in computing earnings/(loss)
     per share, basic*

77,310,426

 

79,586,926

 

79,586,926

 

78,580,369

 

79,569,190

 

79,569,190

Weighted average number of ordinary shares used in computing earnings/(loss)
     per share, diluted*

77,310,426

 

79,899,412

 

79,899,412

 

78,580,369

 

79,569,190

 

79,569,190

            

Share-based compensation expenses included in:

           

Cost of services and others

(412)

 

(229)

 

(32)

 

(1,217)

 

(174)

 

(24)

Sales and marketing expenses

(823)

 

(184)

 

(25)

 

(2,317)

 

(237)

 

(33)

General and administrative expenses

(15,546)

 

(2,015)

 

(277)

 

(21,564)

 

(26,468)

 

(3,642)

Research and development expenses

(1,305)

 

(817)

 

(112)

 

(2,182)

 

(1,660)

 

(228)

 

* Both Class A and Class B ordinary shares are included in the calculation of the weighted average number of ordinary shares outstanding, basic and diluted.

SO-YOUNG INTERNATIONAL INC.

Reconciliation of GAAP and Non-GAAP Results

(Amounts in thousands, except for share and per share data)

 
 

For the Three Months Ended

 

For the Six Months Ended

 
 

June 30,

2023

 

June 30,

2024

 

June 30,
2024

 

June 30,
2023

 

June 30,
2024

 

June 30,
2024

 
 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 
             

GAAP (loss)/income from operations

(20,715)

 

6,724

 

926

 

(54,151)

 

(30,109)

 

(4,144)

 

Add back: Share-based compensation expenses

18,086

 

3,245

 

446

 

27,280

 

28,539

 

3,927

 

Non-GAAP (loss)/income from operations

(2,629)

 

9,969

 

1,372

 

(26,871)

 

(1,570)

 

(217)

 
             
             

GAAP net (loss)/income attributable to So-Young International Inc.

(2,578)

 

18,941

 

2,606

 

(14,526)

 

(2,299)

 

(318)

 

Add back: Share-based compensation expenses

18,086

 

3,245

 

446

 

27,280

 

28,539

 

3,927

 

Non-GAAP net income attributable to So-Young International Inc.

15,508

 

22,186

 

3,052

 

12,754

 

26,240

 

3,609

 

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C4 Therapeutics

C4 Therapeutics is pioneering a new class of small-molecule drugs that selectively destroy disease-causing proteins via degradation using the innate machinery of the cell. This targeted protein degradation approach offers advantages over traditional drugs, including the potential to treat a wider range of diseases...

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Compass Therapeutics

Compass Therapeutics is a clinical-stage, oncology-focused biopharmaceutical company developing proprietary antibody-based therapeutics to treat multiple human diseases. The company's scientific focus is on the relationship between angiogenesis, the immune system, and tumor growth...

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