SY - Earnings call transcript Q4 2020 | So-Young International Inc.

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Operator

Good morning, ladies and gentlemen and thank you for standing by for So-Young's Fourth Quarter and Full Year 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the management’s prepared remarks, there will be a question-and-answer session.

As a reminder, today's conference call is being recorded. I'd now like to turn the meeting over to your host for today's call, Ms. Xu. Vivian proceed. Please

Vivian Xu

under And of and operator. note for So-Young's and statements joining the the provisions Thank Private U.S. year thank XXXX quarter Securities made forward-looking contain full today Reform Please Safe earnings fourth Harbor discussion of Act you, Litigation will you the XXXX. conference that call.

include, limited statements subject to expectations. cause those differ to results our our are with risks current may public not on Forward-looking the our materially risks XX-F. Potential but outlined in uncertainties SEC, and actual to Annual and uncertainties are Form from filings that Report including

So-Young does except statement applicable not forward-looking law. any undertake update any required under to as obligation

CEO; time, the CFO. are our today and Xing would Xing I on Min us Joining please. Yes, Yu, Mr. to over At to call call our turn and Jin. the this Mr. Jin, Mr. like the Founder, Chairman

Xing Jin

for and with earnings for million Thank us our with of you Language] [ph], solid an quarter quarter a We everyone call. reached as guidance. in total increase fourth RMB [Foreign our line year-on-year, revenues XXXX XXX joining ended year XX% full previous XXXX

such small VR based launch content across our demands, in during industry user service Live that a users’ mobile XXX% reaching base some to increase caters and an quarter, growth with on of innovative there The strong China the advanced the was our momentum, of remained aesthetics well outbreaks X.X and attributable average from fourth of as Store MAUs ago. the In library as province medical as our efforts whole Diagnosis. particular, quarter, growth the mainly continuously as expand year technologies, to our Although, to the a million business were track. COVID-XX on kept in a

for the X,XXX, platform COVID-XX of service costs aesthetics was In impact people number the industry, especially on making to with Due of different So-Young's pandemic, decisions. paying are recognized year leading prior the fourth medical to surgical tend of new XX% higher service to as provider among time from was for quarter, up the providers, year. generally before medical Our much reached final factors many to them. and progress a well the the medical challenging more take consider XXXX treatments, cooperation

on greater As of greatly category cooperation deepening date, were improving their performance. tough But providers recover and thereby a their services, comprehensive So-Young, outperform service the capabilities pace. -- medical surgical relatively sorry, to is slow able at track stronger to conditions, customer thereby with acquisition operational offered market with in

Looking ahead, in along industry with transparency environment medical all the orderly value manner. chain, better we the the and aesthetics progress the and users from providers demand eventually will various service the trust end of the and throughout ensure a among more believe tightening of With sustainable more regulatory growth development and parties will industry. healthy

would you recap share past I a takeaways do to and Now year. to this some like of with

multiple XXXX Diaries content enriched content. engagement has By And X.X user the attributes. user informed invaluable needs. and success spent more RMB content of programs, reached of million. the So-Young's Ambassador we as similar knowledgeable XXX% users excellent from campaigns user further our monthly a XXXX group and and end average the trusted of series we to larger Building and views our for growth experience the information. in distributed success options support such socially engaging creators brand Firstly, and the our to and on levels our evaluate the share This our are medical XXXX. content Meanwhile, reached XXXX community user and of continued the awareness So-Young broad which on are trustworthy Beauty successful launch drive platforms and researching platform by Overall grow in on high-quality industry. They of library various continued as brand provide base. for monthly with an we rising on recognized social with most service RMB a their we incentive proposition our aesthetics user now platform time articles of attribute with billion we growth of continue base to to and helped wider XXXX X.XX to established increase our

as awareness Charity blockbuster Waves and year and providers medical by helping RMB XX.XX them of traffic billion was topics medical XXX% program illegal our responsibility related views This year-over-year. the relief Language] Sisters enhanced reached in as So-Young's So-Young Secondly, brand site raised organic the surged our founded better we service strategies. Weibo in procedures. trending As [Foreign customer significantly first China unlicensed while awareness by service initiatives, part show acquisition in image. target on for The the of variety with charity or the Fund our brand Make we're of social the victims Who

and of wider a restricted target to new to sales store membership we of highlight more launched products VR potential medium Our COVID-XX out second each our flow product the the interest. major service to audience. with help as features recovered business the target pandemic, In of limited small less capability will and we traffic and during partners in product foot attract XXXX, heavily stores the need provider solutions acquire their to range reach hit their the user year a in but and off-line early users efficient address reopened rolled institutions and the by a gradually platform during to the Store cash find and XXXXs, To online leads. half were Those marketing on pandemic improved. the to

for new focus we of the renowned with operational providers support, growth teams for for aware had strong increased As more visibility. user the on based our R&D users. on partnered to and [Foreign serve of created brand ever hospital. surgical, capitalized to value name, to advanced our technology nonsurgical and and dedicated continued specialization us each and we have are Thanks business Language] users of our Thirdly, invest service development in the and

the kept products users our technology. in-person consultations, provide away a from swiftly launched pandemic COVID-XX of we friendly to user the As with remote online services series doctor

For and live XXXX, XX,XXX live a we in XXX,XXX example over diagnoses broadcastings. of completed total

the operations with Language] to as consumer's improve on users, promptly as Now choosing medical to algorithm few closely I awareness into over by [Foreign Therefore, new [Foreign joining Language] users be shortens inexperienced continued as base for are enhancing been user updates e-users high-quality XXXX. give approaches We some distributed refining ways aesthetic rate among needs and high the professionals right over strategies users medical interest working you attract these We and growing continuously number content. in are address diversified knowledge effectively quickly original All reach user process our and loyalty convert of the ensure different our appropriate treatments. past needs. we process an Language] So-Young’s of users our is high-quality transactions. build for their time. promoting retention treatment more real increasing new our has while campaigns, effective and brand have to and well offering, new On when the the users we content generating right [Foreign professionals decision at marketing find the save content like for to demand content. time would years, the Through and limited user front, may our about our levels high medical to and volume of community-based communities the to to

meet leaders For resources March, slimming healthy method key and professional large hot event conversions example this able we knowledge who content and this our with out their various we share to treatments. festival. users related were slim and topics were on of festival, well to about number down how treatments influence opinion trending our that Prior these rolled a platforms. demand to recommended by consume slim slim sought-after we partnered Therefore received. medical using social promoting These on to during to

their believe strengthen service our performance. enhance will front, In plan business to non-surgical standardized this the we process to On growth categories in that XXXX. area, we continue strong service

expanded continue time, our the for We the coverage traditional in advantage of optimized have At operations also and will our same categories. our strengthen network providers sector. partner we to surgical service the key

the leverage our to is recognized provide and relationships We service consumers well information macro continue high-quality we medical a Chinese on close aesthetics operating to with and by industry aesthetics medical medical platform will as experience leading summary, growth services. providers believe are multiyear the And we China. doctors that trajectory. In top-tier in

services responsibility value. a of sector as industry the the provide leading our we with to by norms users to and make more player As real have development promoting and in of professional called the it

the into to care the year. platform offering, fourth to in content in process forward, will most base, broader the for health we industry competitive on continue like and will I would chain user the the turn edge full call value quarter go fully deeply focus medical and became who to over and trusted through user-centric our Min, the now service leverage aesthetics and Looking consumer technology financials industry. explore

Min Yu

Please Thanks, [indiscernible]. to release Please be on comparative year-over-year financial our here also will for basis. information amounts earnings in RMB detailed performance refer be our quoted a of reminded term. that all

[indiscernible] The XXX.X revenue to X.X% as of expenses XXX.X were year-over-year. of due our fourth with million, was year-over-year. activities X.X% increase costs. to RMB XXX.X was operating line guidance. XX.X% XX.X% and employees. COVID-XX RMB decrease earnings a increase a and compared total costs. change with were compared income up administrative were expenses and payroll associated attributable costs increase period to million, primarily RMB respectively mainly RMB XXX.X million, with increase to and revenues, in XX.X primarily an the Income RMBX.XX the expenses same of year. and compared RMB same gradually million, to income and XX.X was up an -- was ease RMB taxable quarter net up G&A RMB up was number XX.X the payroll due were million, and tax RMBX.XX decrease the expenses with XX.X% was compared in services Sales shareholders Reservation of million, XXXX, recovered XX% diluted year-over-year. expansion XX.X XX.X% tax in marketing income million, year-over-year, the respectively impact RMB XX.X China. XX.X% million, contributed continue during the ADS period up The the due the XXXX. million, expenses XX Basic million, total XX.X increase RMBX.XX were quarter income. paying in payroll of medical per RMB in Cost with year-over-year. in increase RMB the year-over-year were development last up in million XX.X up Research associated with revenues non-GAAP million, services marketing revenues RMBX.XX net XXXX. to of Net fourth For expenses revenue were information primarily RMBX.XX RMB year-over-year, of expenses to Total during income contributable – XX.X RMB in in an ordinary primarily Within RMB – XXXX. year-over-year. of million, The of was due million attributable with RMB quarter XX.X net income Non-GAAP of was fourth

year-over-year. revenue online up the service were XXXX, year-over-year. million, information due X.X% up Reservation RMBXXX.X Cost billion, RMBX.XX year-over-year XX.X% billion, XX.X% development. million, of services income costs revenues to XX year-over-year. RMBXXX.X million, Total per compared income net RMBXX platform with services year-over-year. compared ADS and X.X% shareholders in full fiscal were increase operating compared up Net to to in XXXX. per Non-GAAP Basic million Within RMBXXX.X million RMBXXX.X XX.X% RMBXXX.X fiscal attributable revenue and respectively expenses million For was was up year were diluted to diluted total RMBX.XX of primarily year earnings year basic -- attributable revenues, year XXXX. RMBX.X total was RMBX.XX to RMBX.XX was fiscal an related revenues and RMBX.XX in million ADS earnings ordinary shareholders was RMBX.XX and with in XXXX. ordinary up

sheet. balance Now, for our

cash we investments RMBX.XX short-term XXXX, deposits, and equivalents billion term of XXst, cash December had XXXX. XXst, and term deposits, December as total of compared with As restricted and cash RMBX.XX billion of

preliminary I expects change. and total take effects subject will view RMBXXX For between conditions the call now prepared period impact to XX.X% from COVID-XX is estimates million the operator market current Operator XXXX. RMBXXX and Particularly to demand. in This representing and increase for it difficult same based XX.X% an are reflects and the of are all we of to The of questions. XXXX, call are market conditions Q&A. potential So-Young predict of ready company's be above outlook first and the to to which of to our the open revenues customer on of turn million, concludes the remarks. the quarter analyze which the and the operating

Operator

Thank from Jefferies. will the begin you. we and [Operator Chong from gentlemen, Instructions] question-and-answer Thomas first question now The Ladies session. comes

Thomas Chong

Language] treatments? question and couple outlook the [Foreign and differences And the in in about are My nonsurgical and your competitors the is similarities strategy What between of is Thank XXXX and of advertising more and years. on advantage? what you surgical our also you. terms operation next

Xing Jin

Language] [Foreign

Vivian Xu

services target improve to Then the will lastly, professional through enhance the the the non-surgical our anti-aging transaction which middle our with then user more to categories. strengthen to as we will of average festivals, quantity, pricing, as drive high in value mid to activities strengthen and position the those coverage to groups. the on So-Young and new Ambassador user as So-Young standardize number media content non-surgical other And we partnerships the average consumer the to treatments our awareness First categories, we OEMs still treatments our low promotional shopping program transaction festivals SKU. one community in promote is our non-surgical we're and the to with slim with also amount the of well performance more and upstream team, pass values, And high-end and leading want on of and and can going engagement. in advantage such increase

their first improve surgery, rhinoplasty, categories, Then will, features to of and a category. we efficiency, the also, larger Lists, want our some So-Young a with IPs including way number breast in also from public list we by and like differentiations. like doctor some of public and Emerald eyelid through also up we surgeon upgrading their we of doctors will the Diagnosis top-tier -- surgical -- highlight teams the introducing help all, expand eyelid each the will surgeons through dedicated to sectors this hospitals. account, fat we doctors transfer, On in And Live could like doctors while to -- set for Doctor

in overseas and Japan abroad. restart situation surgery to will the on Korea overseas policy We the business traveling according and the changes pandemic

In aesthetics. we the terms for platform as professional medical only of positioned marketing, are a vertical

platform, them as which and seen are too competitor size difficult too positioned sustainably. to makes or small as platform, are they comprehensive Our have difficulty in it be e-commerce invest for to a focused

spread In Thanks. us all. team terms of categories across operation, That's our dedicated different allowed regions. to fine-tune our service and

Operator

Thank you.

Our next comes from Please question Citigroup. Gong ahead. go Brian from

Brian Gong

Thank medical will [Foreign industry, Chinese revenue? will the plastic is when My the into Language] I and the our about the does expect you. management full translate management taking of recovery? question my see the Year. question. for myself. aesthetics after New surgery it area when to And especially And Thanks translate

Xing Jin

[Foreign overall. pandemic confidence Language] to The consumer uncertainties of weakened have the led

effectively and community high-quality user base However, added and platform. building thanks engaged on content new capabilities, users users our our engaged repeated to we have

that the during was the of to the growth And quarter MAU increase close we see see spending aesthetic our especially more medical of clinics with momentum marketing and the a million in hospitals in from nine this can user demand you continued maintained screens, than acquisition. more fourth could So invest that and XXX%.

quarter steadily service we medical on average Overall could the highest provider the year. our several grow year. as gaps scales growth treatments fourth compared X,XXX heavily ad number customer of grow the quarter, is members. Surgical average, path last to by transaction industry last the recover. we still in transaction see paying XXXX. the And for each this the in right pandemic period were So value quarters some average value. fourth is And in well this peak budget market the the over transactions in to the to due actually as But high with to customer of hit also the compared

market on think automatically consumer earlier the That's the will healthy. all. especially the So nonsurgical growth XXXX, -- that we the it demand based grow from overall Thanks. some is this drive in situation sector, --

Operator

Thank you.

Our next from Bank. from question ahead. Leo Deutsche Chiang go Please comes

Leo Chiang

taking [Foreign barriers? will And question the strategy the in what long-term in you competition, the the Thank with industry? question. fierce for you others my entry My what is adopt to Language] of are in compete face

Xing Jin

[Foreign Language]

Vivian Xu

competitive our is which summary, from strategy In too our differentiated peers, includes points. main three

is the to medical continue decision-making And platform. first technology focus brand to users reputation efficiency. is professional on aesthetics mind improve combine and and share The as awareness on services AI user excellent of teams build e-commerce a community strengthen And experience. third and on user improve service our increase secondly,

Xing Jin

Language] [Foreign

Vivian Xu

On usually currently online low traffic treatment and Users buying the are use offers is do service the institutions often group much as by the the attracted and a pay not most into higher by quality channel first platform their their to price shops. consultant. persuaded offline guaranteed. are point, Customer packages right for now, direct or upgrade who to services feel that sales cheated

business with sentiment. or We terms in that in growth have GMVs but of observed also this brand negative in result platform in -- run long it we just the do orders believe achieve orders model significant that

and We our the give will greater performance. to online extend security provide quality to to service continue service

user selectively Through were able category, standardization to enhance third-party will So-Young and reviews of promote from to Pass continue consumers For and to experience. the improve and we institutions nonsurgical the best-performing the investigation treatment. with service work we continuously

overall top-tier the we also Emerald -- surgeries, treatment. on quality doctors plastic top-tier surgeons operating and shared For facilities for At time, and control Doctor in medical with opening and provide select our order we aesthetic same XXXX continuously researched to room each Lists.

improving e-commerce and building community we of platform both the process have decision-making only are capabilities. In terms users' to

-- for efficiency mapping those have including of over been allowed used X.X and continuously user three decision-making. to times these addition our billion facial combination user have AI the In us techniques. The been tools have of improve skin factors

campaigns brand media continuous and social brand strengthened awareness building on among our our Lastly, have users. also

So you. this So-Young. Thank should be important the antidairy all. That's for most

Operator

Thank you.

question. ask comes from Vincent question & Please from the Yu next Company. Our Needham

Vincent Yu

very [Foreign Pass. do my in the the our have the you about about Language] about monetization. XXXX, expectation trend momentum the my Thank And in And management the is and question taking And growth. In growth question and what is a think 'XXXX? user So-Young we growth for we what's first user my XXXX? second question in monetization strong

management some around about Pass or details -- So-Young plan we for So how to experience do seem share think important a user our which step you. can the standardization? Thank strategy the very be

Xing Jin

more typically We execute focus XXXX consumer mid distribution fall strategy to acquisition user growth our will on the and for this most Users year triangular the users a forcefully premium with maintain model in in categories mass users. and into of accounting high-end majority. price-sensitive

fall with value forming quality result X,XXX. into treatments. aesthetics distribution market. service users better for the willing the However, to mid are These of premium treatments shape users And [Indiscernible] the a pay usually medical price-insensitive of for RMB a to and transaction and usually user majority above for high-end services mainstream structure the are

our We have reinforce the terms to research and invest of continue we'll medical among our them. expand to aesthetics users' of reach third-party perception ahead the user So-Young, to users' According market this mind this consolidated significant professional advantage in and in and a branding will peers. by year, platform advantage continue in to of we share. our it's as far our In

users. helped more addition, we which acquisition the has social platforms short-video media channels, improving through continuously target are effectiveness user premium and of users acquire us In our

promote and present, believe strengthen of services those the by market prevent experience we to consumers. most reviews past we to compliant continue partner fake to At industry the comply transactions our off-line principle insist avoid drugs and user aesthetics medical and and operations we inspect institutions' by monetization, reviewing we are regularly will used brand strictly the of will on standards shops, medical our For uncertainties the first, continuing misleading and image. in platform to

still loyalty this think for will to we the impact of unlike customers could service on long-term, is those Pass, the may our license that the short-term long-term – So-Young it the in But expect growth all on we Unlike We one qualified and strategy some as end follow will usually the because stick bring believe But to value-added – right we behalf on have traditional service or those this it's more have to revenue. register our platform rounded the our ourselves. they some actually the our for customers. institutions our restrictions.

on this our use actually platform. promote to is So branding our

of institutions we off-line those to our way, be standardized in products on could of In also the our those the all could working is off-line this are experience working SOP and they and selectively up shown price more hospitals part. -- solve from price safe and of the especially In with set set working First way those and Pass certain and we user this price. process the with So-Young those online kind to – institutions, we for selectively also up price this with certain. – kind our to improve to and

Xing Jin

Language] [Foreign

Vivian Xu

we the go those like offline into We of think SOPs if is services. regions received the be designer well to the to it actually quality institutions control firstly products we're to in we of cooperation to and Thanks. cities. users And think from going also and expand several such by the to we also and designer it the with whole successful test that And ranging China. that will deeper end whole our

Operator

you. Thank

comes the today Please CICC. question [Indiscernible] from final Our question. ask

Unidentified Analyst

[Foreign reservation can Language] relative reservation ways. see in service service. a is regarding in revenue absolute my both question So, the We decline and

you. the boost on the sales you platform reservations to form do your the business in model? of complete how future a closed-loop So, Thank

Xing Jin

Language] [Foreign

Vivian Xu

we and consumer the advanced mediation. performance of the of like the the guarantee terms to disputed the insurance, strengthen on in reservation short-term side, will the continue In payment,

online. promoting strengthen side, merchant distribution payments and as to use we guide to online place to traffic orders conversion the On tool will our merchants users

Xing Jin

Language] [Foreign

Vivian Xu

And actually which and Currently, e-commerce is online include a should buying including model, aesthetics the comprise that of platform channels outdated I must A medical itself e-commerce which good relatively model all model. So-Young offline first the products e-commerce important least medical closed-loop form a following better the conduct between a service to marketing characteristics; is through aesthetics technologies think real-time ecosystem the is e-commerce thirdly, inventory and of adopt but medical the reservation. services. management the second tools is the or communication a be providers to and And like the not SaaS. online platform streamlined

form have cities And we providers believe actually and believe e-commerce cover and that closed-loop So, Beijing, much skin And So-Young consumer cities user some projects. and which cities purchase hottest experience service XX will model, and now and since include that sales all. Guangzhou, this more The better -- provide make model gradually XX categories increased platform. most closed-loop laser to So-Young place right like a and to customer So-Young cleansing help cities orders, Pass we should it our or improve to a operational XX the than Pass users users' like include XX multiple hot covered model Thanks. institutions with Meanwhile, easier and That's more the Pass Shanghai, think we better will interest efficiency. top-tier to the popular mainly categories. upgrade -- And we Shenzhen. than and a thanks for service feature experience. one-time,

Operator

you. thank right, All

the reached have of gentlemen So, ladies session. and we the question-and-answer end

So, we you for today. with conclude Thank and for conference that disconnect. our participating

So-Young International (SY) 22 Mar 212020 Q4 Earnings call transcript