So-Young's Latest Financial Results: Challenges and Growth Ahead

So-Young's Financial Overview

So-Young International Inc. (NASDAQ: SY) announced its financial results for the fourth quarter and fiscal year, showcasing both challenges and opportunities ahead. This leading aesthetic treatment platform connects consumers with a variety of online services and offline treatments. The latest unaudited figures reveal a noteworthy decline in revenues, influenced by factors affecting the overall market landscape.

Fourth Quarter 2024 Financial Highlights

In the fourth quarter of 2024, So-Young reported a total revenue of RMB369.2 million or about US$50.6 million. This represented a downturn from RMB390.6 million in the corresponding period in 2023, as the company had previously anticipated. The net loss for this quarter amounted to RMB607.6 million, equivalent to US$83.2 million, contrasting sharply with a net income of RMB17.5 million recorded in the same period last year. This dramatic shift was largely attributed to a one-time goodwill impairment charge concerning its subsidiary, Wuhan Miracle.

Key Financial Metrics

• The non-GAAP net loss attributable to So-Young was RMB53.2 million (US$7.3 million) compared to a non-GAAP net income of RMB35.7 million in Q4 2023.
• Total operating expenses for the quarter surged to RMB815.2 million (US$111.7 million), a 216.2% increase from the previous year's figure of RMB257.8 million.
• Cost of revenues rose to RMB153.1 million (US$21.0 million), an 11.2% increase compared to the same quarter in the previous year.

Operational Highlights

Notably, the aggregate value of medical aesthetic treatment transactions facilitated through So-Young's platform amounted to RMB356.6 million, down from RMB470.9 million recorded in 2023. The company reported over 39,500 verified paid visits for the fourth quarter, starkly contrasting with approximately 2,300 during the same period last year. Furthermore, verified paid aesthetic treatments surpassed 81,500, compared to around 5,000 in 2023.

Growth in User Engagement and Center Operations

• The active user count exceeded 52,000, a significant increase from around 2,900 during the previous year.
• By the end of 2024, So-Young had expanded its presence to 19 aesthetic centers across nine major cities, achieving positive monthly cash flow in 11 of those centers.
• This growth reflects So-Young's ongoing commitment to enhancing customer retention, which currently stands at approximately 60%.

Fiscal Year 2024 Financial Performance

For the complete fiscal year of 2024, total revenues reached RMB1,466.7 million (US$200.9 million), a slight decline from RMB1,498.0 million in 2023. The net loss attributable to So-Young was RMB589.5 million (US$80.8 million), significantly impacted by the goodwill impairment charge for Wuhan Miracle. Non-GAAP net loss was reported at RMB4.7 million (US$0.6 million), compared with a non-GAAP net income of RMB58.0 million in the previous fiscal year.

Overall Cost Analysis

The overall cost of revenues for the fiscal year accounted for RMB567.6 million (US$77.8 million), reflecting a 4.3% rise from RMB544.3 million in 2023. Notably, this year included share-based compensation expenses totaling RMB0.3 million compared to RMB1.8 million last year.

Special Dividend Announcement

The Board of Directors announced a special cash dividend of US$0.03445 per ordinary share and US$0.0265 per ADS, payable to shareholders recorded by the specified date. Compliance with local regulations and agreements will govern the distribution process.

Management's Insights and Future Outlook

Mr. Xing Jin, Co-Founder and CEO, remarked that So-Young is navigating through a challenging environment. The firm remains focused on executing a transformative strategy that aims at vertical integration and diversification of its services. The growing demand for standardized, high-quality medical aesthetic products positions So-Young as a pivotal player in this evolving market.

Chief Financial Officer Mr. Hui Zhao added that the resilience of their business model is evident in the ongoing expansion of the center network. This solidifies the foundation for sustainable long-term growth despite a dynamic market space.

Frequently Asked Questions

What were So-Young's total revenues for Q4 2024?

So-Young reported total revenues of RMB369.2 million (approximately US$50.6 million) for Q4 2024.

How much was the net loss for Q4 2024?

The net loss attributable to So-Young for the fourth quarter was RMB607.6 million (US$83.2 million).

What were the standout achievements for So-Young in FY 2024?

So-Young achieved an unprecedented number of verified paid visits and treatments, while also expanding its network of aesthetic centers significantly.

Did So-Young declare any dividends recently?

Yes, the Board of Directors declared a special cash dividend of US$0.03445 per share.

What is the future outlook for So-Young International Inc.?

So-Young plans to focus on its transformational strategy to enhance services, grow operations, and increase customer satisfaction.

About The Author

Dedicated Author and financial expert Logan Wright here, 29 years old. After earning an economics degree, I spent a number of years working in different financial industries. My great passion is enabling everyone, from any background or experience level, to understand and be literate in financial matters.

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