Revenues are higher than both the firm’s last quarter and Bloomberg’s expectations.
Image credit: Ani Kolleshi/Unsplash
► Information services are the most significant income, occupying 69% of the total.
► Marketing campaigns and user acquisition initiatives expenses increased a lot.
On May 18, So-Young International (SY:NASDAQ) released its first-quarter financial report for 2020. The data shows that, as of March 31, 2020, its revenue was CNY 182.6 million (USD 25.68 million), exceeding the company’s expectations of CNY 160 million (USD 22.50 million) to CNY 180 million (USD 25.32 million). At the same time, it was higher than Bloomberg’s expectation of CNY 176 million (USD 24.75 million).
The first quarter’s net loss increased year-on-year. The number was CNY 35.9 million (USD 5.05 million), compared with a net income of CNY 45.9 million (USD 6.46 million) in the same period for 2019.
Users and medical service providers gathered more on this cosmetic surgery platform. Average mobile MAUs (Monthly Active Users) were 4.17 million, an increase of 116.8% from 1.92 million in the same period of 2019. The number of paying medical service providers on So-Young’s platform was 3,295, a year-on-year increase of 22.0%. The number of medical service providers subscribing to information services on So -Young was 1,862, representing a slight increase from 1,853 at the same time in 2019.
Mr. Xing Jin, Co-Founder and Chief Executive Officer of So-Young, commented, “Our strategic focus on enhancing engagement expanded our vibrant community of users and medical aesthetic professionals. We are using a series of creative and incentivizing promotion plans, working more closely with medical aesthetic influencers to generate valuable content.”
According to the report, information services are it’s most significant revenue resource, occupying 69% of the total, a decrease of 12% year-on-year. Another reservation service obtains 30.94% of the total, the total number of users purchasing reservation services was 77.5 thousand.
Sales and marketing expenses increased by 45% year-on-year, consisting of 58.69% of total operating expenses. The increase was primarily due to the rise in costs associated with marketing campaigns and user acquisition initiatives. As for other parts of costs, they all increased due to personal related expenses and the hiring to support product development.
According to iiMedia data (in Chinese), since 2015, the market scale of China’s medical cosmetology has been overgrowing. Now China has become the world's third-largest medical and beauty market. It is expected that by 2020, the scale of China’s cosmetology industry will reach 315 billion.
Mr. Min Yu, Chief Financial Officer of So-Young said, “We believe that our strategic investments and expenditure in the first quarter will significantly improve the stickiness of our platform. Further, we wish to enhance the quality of our rich content portfolio and better leverage synergies created across our community. We are well-positioned to capitalize on a rebound in macroeconomic conditions, and the drivers of our long-term business growth remain very strong.”