SY - Earnings call transcript Q1 2021 | So-Young International Inc.

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Operator

Good morning ladies and gentlemen and thank you for standing by for So-Young's First Quarter 2021 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 would now like to turn the meeting over to your host for today's call, Ms. Xu. Vivian proceed. Please

Vivian Xu

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

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

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

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

Xing Jin

quarter [Foreign all the Language] Thank you first joining our for call earnings XXXX. for

to the and RMBXX XXXX. up with the MAUs pleased from million, mobile year almost of kick million a of very quarter first year-over-year. the million, revenue XX% RMBXXX were Average with guidance our quarter XXX% are year, top first X.XX We of start for up above results of solid this

platform paying service of unit industry The number first the As quarter XXXX. up providers was on medical XX% our X,XXX, of the recovered from continues cost. its

platform. activities our interest end as users, across an of in our increasing for have level interactive an We seen well as increase

expanding conversion medical network quality During retention the of quarter we further on providers. to to continue our service and strategy execute rates, while our increase high

and our trust and proposition decision by by user our making. providing content the user to and reinforcing it make to engagement. We engagement quality to increase front, better value drives retention, reliability user On our and we always that order the and unique working user of efficient professionalism in priority improve experience ensure community by depreciated reinforced top user

doctors, of authenticity solid verification reinforcing of platform, medical we also removing terms our strategy, procedures review. to our our the have of first immediate treatments and the In reviews we nature. team terms improvements Besides institutions of on community made of qualification are user verifying in fake for the our

and cooperation and we existing capabilities. user digital to institutional high we experience products partners to with improve a relationships with ones, deepening our and Through quality expressing range are wide offer to Second, authentic of forming continue end users. new a able

fast online pre-sales just the online, surgical platform. robust sales user division to Our and playing user consultation service the from and professional So-Young intelligence user improved experience the help both guarantees to to is ecosystem technology our of transaction not facilitator our behavior make meantime, up recommendations between role our for offline and operations In and procedures. institutions. the due In nonsurgical making on and analyzing to accurate and

building also loop and are to that product a benefits medical We connects stakeholders, each manufacturers, doctors system institutions, them. all closed of consultants, including users, maximizing

a in among Third, were which this ton users video short channels, uses TV bringing broadcast So-Young partnered on we exposure show events early media a Gadget TV efficiency of and in we created became a and our topics we Love. regional the to These Meanwhile, profile. program platform. hot new brand elevated In The acquisition this year called Journey Year’s Show variety and [inaudible] improving with marketing. New are user So-Young Hunan of

in of of and terms As consultation spending, result, base. the our structure we interaction, to which let witnessed user consistent of user actives time a improvement booking, optimizing

year. GMV in March daily XXXX, results in February body of grew the the shaping average Slim Festival for compared XX% categories last by During treatments with XX

strategy Institutions been of customers. to beginning track. users, quality has performance-based have that a normal healthy shifting to better gradually the monetization, quantity focus to pleased marketing of year see have and from on return industry gross their acquire we to the to adopted Moving the more since whole

pass. Our previous decision Since last XX was selected months community because based of recommendations these branding and was the So-Young institutions covers endorsements. QX on seven and in great of it Pass the the year, in launched has products over their and circumstances, purchase it off number whole One users under increased paid now has from So-Young cultivating the social example XX a in cities. more six our past made So-Young XX investment programs and to trust in

attention impressed So-Young his popular. and became Institutions were users. users performance with of the terms attracting very end Passed also in through of

of performance aiming and compatible quality will with whole market greater to we tune the distribution, Going and potential. customers to traffic allocate fine process demand forward strong

We efficiency content consumption focusing while inviting and open [inaudible] user on up will Q&A. retention, further before Then also efficiency. Lydia increasing improve the monetization will user to acquisition

Min Yu

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

loss from RMBX.X costs Research in with for net up marketing associated RMBXX.X development XXX.X% year an Within due total administrative in loss an The with XXXX. up due increase quarter the million, share-based For million to increase a year-over-year non-GAAP of shareholders period million, providers RMBXX The service million on RMBXXX.X with service medical period information from of share-based activities, was first ago, branding same paying a in and The respectively marketing revenue The The the first the million the significantly expenses purchasing of increase expenses users. from were million XX%. paying the XX.X% was employees. RMBXX.X ADS diluted of XXX.X% X,XXX to first expenses. due the as expenses RMBX.X RMBXXX benefit of tax RMBXX.X of medical to included a an a first from million to and a million, number expenses were provider. number quarter expenses RMBXX.X in of Sales ago, our Sales net XXXX. payroll revenue compared per were million, and due costs. due up XXXX increase quarter million. in of compared from XX% of of expenses RMBXXX.X corresponding Net compensation an million development of XXXX. year-over-year RMBX.XX respectively of Total primarily loss associated expansion million number included XXX.X% acquisition the increase RMBXX the increase XXXX. period expenses increase million especially Cost with service Basic the in Cost of million, in million. user million XX.X% year of RMBX.X from of the the were million, in an of average included million based RMBX.X RMBXX.X compared period in an XXXX. the and primarily RMBXXX XX.X% net primarily revenues RMBX.XX expenses were were compensation of revenues million in and were quarter number to the attributable revenues, RMBXXX.X RMBX.XX during in primarily up of RMBX.X quarter million and of compared medical total RMBXX.X RMBX.X increase and million, compensation XXXX. G&A quarter G&A XXXX was above XX.X% period expenses million, So-Young’s first Non-GAAP in the of the share-based up of with the RMBXXX.X revenues and to of million with year-over-year XX.X% mentioned. loss RMBXX.X XXXX. in marketing RMBX.XX compared up guidance compensation quarter was platform was payroll with first X,XXX, attributable were in an were primarily income an increase Reservation Research of same expenses million services RMBXXX loss RMBXX.X million include million in paying RMBXX.X of mainly corresponding corresponding increase the in with service RMBX.X from XXXX. compared with RMBX.X increase The RMBX.X up of revenue increase XXXX. was to the compared million, per XXXX. XXXX. compared was expenses operating providers. to of first of RMBXXX.X first quarter RMBX.X million from ordinary in was share million and expenses

Now, for sheet. our balance

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

million total market to the revenues our to of the RMBXXX prepared XX% between a conditions call questions. RMBXXX of operator I be increase the overlook second Q&A. the is from preliminary operating to For based company's million, the above floor and XXXX. on conditions customer The XX.X% now same and representing demand. concludes So-Young period open XXXX current and and take turn expects of to it market reflects we This Operator, will estimates the are ready and for the remarks. quarter

Operator

Instructions]. you. Thank [Operator

comes First the Chong of question line of Jefferies. from Thomas

open. Your line go ahead. is Please

Thomas Chong

users my operate MAU monetize for as in If pool, share as questions. going about talks can target, well strategies? are our and how our possible, as [Foreign our going Management taking better management are as how detract. to Language] XXXX well about Thanks to marketing users we we management

Min Yu

questions. Okay, I these answering will be

strategy compared XXXX. won’t XXXX user growth change Our in the to

base. our penetration base in focused on be will user terms and of still We user targeted expanding our increase our

part your is question what’s your our and said, last of MAU, the you the MAU guidance. For what’s target

but we I terms the of positive guidance increase provided our quarters, never we in MAU. that previous in see think although still

forward our target. seeing MAU growth, MAU, average that's going end quarter XX% the For year first around of the expect million our at we around like X.X and the it’s still of

you what's did the marketing sales our and in quarters can normal, bigger result, sales we strategy or spending have larger going budget? As and in marketing. spend we’re how than For, and see to our first quarter previous our

quotes focused We million have spend on March, XXX, earlier slim campaign in offline of we mentioned customer been on promoting think large around shows with terms the we payrolls, our we those spend that did associated Excluding in as have previous Focus also and the which for a we have – around Media. the TV acquisition. with in on we festival XXX branding, the

year, the even So quarter that’s quarter year the same period of of spending and to first last of XXXX. last extra more compared fourth the

acquisition, of is half and spent or or can’t sales customer and – because our years strict very than we like sales budgeting but fourth spend no, that In we if XXXX, for marketing more means It’s acquisition. than for quarter XXXX terms for marketing. of we much budget around more that customer or so the will the answer expenditure, branding policy around is previous usual have we of

of like revenue. total is XX% around budget Our

in relatively consistent fourth we quarter on – and XXXX branding the that's although rule quarter, forward we as spending If in lower like to and on quarter, for year, which that's have will large perfect – quarters. than the And first the like down acquisition, spending going allies the any conversion for that the impact years. – in promotion, third of can you the half for more the the this the sales we compared suffered the COVID-XX an branding years, of that and we XX% that's our like for the our terms side. That's fourth the level. marketing dedicate this but quarter of general for quarter. just acquisition, branding is and of going for of conversion – spend first planned every also and in and sales case quarter question, terms MAU, for already the slim did what’s expenses have more And but and It the strategy forward expenditure the on to by traffic focus have of quarter the quarter previous come won't and it our previous more will to but few the budget of earlier and have and lower do budgeting, is festival going we we spending of XXXX and see we all normal mainly spend amounts growth side, think branding third and the in we XXXX, customer in next we have to part second marketing see you year, relatively for our monetization a in half previous of see like will We still second March the in and for year. forward large

regular closing than quarters. looks level, that to and it's which next the previous conversion or So consistent our – do the few recovering the trend back conversion positive into the the coming customer efficiency conversion as my customers very seeing see are years, improvement now but lower paying for and the will trend we That's for and well side the answer. be

Operator

Thank you.

Deutsche comes the of next Our Bank. from question Chiang of line Leo

go is Please line Your open. ahead.

Leo Chiang

my [Foreign Language] Good evening. Thanks questions. for taking

So for my question you. So-Young’s of platform and provision institutional marketing expense are [inaudible]? you what and which that the you’re the is is thank Okay, on spending trend

Xing Jin

Language] The Okay, five aesthetics about medical first customer less aesthetics the [Foreign China have In XX% ’XX. our increase the formed report, percentage to secondly, XX% first to than also the & our are in to up our value the Thanks of from we in The Thank years. institutions more they off by spending. So-Young marketing, ROI of medical lastly, as And Frost contribution partnership terms XXXX was ways recognition mature online customer XX% in the in of than improving acquisition the than market, online improving in PS is see total number expanding to acquisition and could turn meeting customer performance. than spending was so allocation of operation think our the acquisition reduce at of our is that more according we that we as growing users. our customer on see put overall quarter with continued institution strong those their for to X,XXX. to institution providers also share institutions pain Sullivan industry you. the increasing, their past X% that service the In in industry platform of is among capabilities. continuously their base believe to in medical better their institutions. service spending number as to they platform market has on platform, a a performance the We cost, we ways behavior use of platform number user online more new and own take-off new to their better long proprietaries than also target in channels – that brand we capabilities. contribution order with when their acquisition are our – spending are allocating testing improvement We is the

Leo Chiang

you. Thank

Operator

you. Thank

Our next [inaudible] question is CICC. from of

Unidentified Analyst

contract [Foreign management Thanks a I we Bloomage Biotechnology. for noticed my Language] taking signed with questions. cooperation that have recently

detailed more Thank suppliers? future cooperation So with manufacturers upstream the could you provide for directions or you.

Xing Jin

will have continue better strengthen [Foreign to medical our user Language] over manufacturers cooperation Going forward, with we control experience. to product

enter let Bloomage products. So with to me we comprehensive an then agreement elaborate choose inclusive why cooperation skin booster cooperate, we choose Biotechnology to strategic

support in and to aesthetics partner also, and medical provide strategic and see If training. will is initiatives. you the the – is become the will we future medical And help latter acid product alliance. we partner product helped comprehensive we think think program agreement service we according Bloomage with that and the two the, each provides. R&D including new like ways One several aesthetics on to like in one We hyaluronic creating strategic that in were

have packaging hyaluronic program. solution its a acid also developed addition, we for In

platform will consumers maintain So largest enable aesthetics So-Young efficient and medical business. in in connection our as the leadership industry the the China, between and

Operator

Thank you.

line is Vincent Needham question from Company. Next Yu Please go & the of of ahead.

Vincent Yu

Hi my Language] Thanks have question. two [Foreign questions. management! taking I for

a the much revenue more stage the we returned color we expect mentioned this we in you how Thank the and competitive significant market aesthetics also on – consumer second is is of for to do And The normal my The the Management the medical in much first the are growth. year So-Young for surgical question to side. Can strong trends the question XXXX? management surgical the on headway. to us contribution the Pass. And about cities details Can how the has then about to two treatments medical treatments, more planning So-Young of non-surgical how can respectively? categories aesthetics have beginning Pass, [inaudible] how medical, edge market. light, the share on enter demand see trends many and compared surgical is been year. we And you. about gives with gain

Xing Jin

a medical to the interest First, the aesthetics market keep recovery. and purchase the willingness that Language] is under users’ We see healthy [Foreign as whole increasing.

the rate So and the on good a if reached number platform due in gross. X.X first million maintained see quarter, that’s of you our very MAU the

during number injections and also the understand of behind continue a fully kept bit XX platforms. booking, experience with last that will consumers. So, injection, a age consumer year consumption, average user like Non-surgical online average daily March question services We, and skin do SKU in to trust user that and the and in the of pinpoint Yet increase ways: we our and slim content description effect service with user product standardization improving refined return gradually GMV momentum. care improve treatment year-over-year our protect our content to users This and all that, on this booking both to the the to users strong leverage those so for introduction we secondly, on sort first side recovering enhance festival doctors, could and that all increased payment enhance we whole we the surgical downstream and library One three the is of count is and still addition that. consumer is refined still to – see to the treatments evaluate the the enhancing of on has optimize the service, and supply. our we can manufacturers the the and anti-aging in increased and We compare it also is platform GMV bookings the and community, institutions of units the the behind so third, see In spent both aiming level surgical construction time XX% also products institutions. course in intensified double - upstream by the to reservation total significantly our women the the the your in for we is for the and before experience in year warranty we protection total among upstream aftersales SKUs; the of could nonsurgical Language] that are And [Foreign pandemic. most users year contrast sector competition to of platform, platform. popular to experience. We systems like see and risk

could you separate our first the for So line. reinforce leading position system, surgical those regional that both and we all pricing it’s We the see categories down product SKUs and treatments as low as of our and also coverage. end well in

mid focus to we successfully For product the improve the are widely by to line, the mid corporation treatments. So-Young user in to in to that see to our and to the contract engagement acquire high Media which the recognized we enhance could Content. It could for and an manufacturers high our users the with terms, content we PUGC later end non-surgical those customers increase is who Pass end Ambassador New are upstream effort group. supply And of So-Young program, performance, metrics promise and

in Lastly, recognition our of the customer non-surgical. enhance expertise

the cities, the to the with October, well XX to market partners. events the So-Young contents. events; launch Referring in than line now and more [Foreign since So Thanks as program some as all, your has So-Young festival you. some like XX shopping question expanded anti-aging about Pass Pass, last thank institution shopping slim festival, the Language]

optimize we SKUs, and category So-Young plus. standardized to the our we have In regularly non-surgical for the product select product terms product events XX for hold to especially consistently Pass our our program standardization, selection, extended of

Pass on a flattish for below give largely products. for we So in program So-Young we generally the and sector. standards contribute and revenue this separate more the still our end under higher So-Young subsidy up apps our Pass different total reservation the non-surgical Meanwhile not was revenue terms order other rate did complaint the in yet a Pass. this are level Pass allows to a But we you. line saw the this than not have projects of we not expansion that moment the the for a since meaningful growth, so revenue, scaled level, saying of users, transparency main the did So-Young fulfillment, us the those, for at the So-Young Thank number products. the that At detailed program tech to rate

Operator

Ladies call. you Thank this conference Thank gentlemen, you. today's and for concludes participating.

You all disconnect. may now

So-Young International (SY) 19 May 212021 Q1 Earnings call transcript