So-Young Publishes 2019 Q4 Financial Report – Net Profits Up by 71.4%
COVID-19 and China
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On March 23, So-Young (SY:NASDAQ) published financial results for the fourth quarter of 2019. The report shows that, as of December 31, 2019, the company's fourth quarter total revenue was CNY 358.2 million (USD 50.51 million), an increase of 95.7% YoY; net profit was CNY 69.9 million (9.86 million), an increase of 71.4% YoY; non-GAAP net profit was CNY  86.4 million (USD 12.18 million), an increase of 86.5% YoY.

So-Young was founded in 2013 and went public on May 2 in 2019, focusing on providing medical cosmetology and beauty related content. The home page displays the most popular medical aesthetic choices, including facial contouring, eyes, nose and mouth alterations. And users can share their experiences on medical aesthetics, most will put photos of  'before' the medical beauty program and 'after' it. Some doctors also introduce their own programs and share beauty information to attract users.

Driven by these active medical service providers and beauty seekers on So-Young platform, this Internet platform is showing a strong performance. In the fourth quarter, So-Young's average number of active mobile monthly users was 3.67 million, a YoY increase of 120.1%; the total number of user purchases was 188,300, a YoY increase of 50.7%; subscribers to the information services increased from 1644 to 2138. As a result, the total value of the medical beauty transactions promoted in the fourth quarter was nearly CNY 1 billion (USD 140 million), a YoY increase of 66.6%.

Mr. Jin Xing, Chairman and Chief Executive Officer of New Oxygen Technology said (in Chinese), "We have made several strategic adjustments to further strengthen our vibrant and growing community of medical beauty users and professionals. These measures have contributed to a 95.7% year-on-year increase in company revenue, exceeding our forecast limit."

According to Deloitte's China medical cosmetology report (in Chinese), the size of the Chinese medical cosmetology market in 2017 reached CNY 192.5 billion (USD 27.14 billion), and it is expected to reach CNY 481 billion(USD 67.82 billion) in 2022. Huge market-driven service providers are stepping into this emerging market while some problems exist. For companies in 2017, channel marketing expenses accounted for more than 50% of the revenue, which squeezed profit margins. For users, safety is their first priority while medical accidents still happen and after-sales services need improving.

According to statistics from the National Consumers Association, from 2015 to 2019, China's medical and aesthetic industry-related complaints increased by nearly 13 times, and in 2019, the medical and aesthetic industry complaints increased by 6,138, which is nearly 13 times the number of complaints in 2015. Industry regulations need to be stricter to protect consumers.

Editor: Luke Sheehan

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