In the recent 2024 earnings call, So-Young International disclosed their financial data and growth strategy. According to CEO Xing Jin, So-Young Prime, the platform that underpins the company's growth, generated over RMB100 million in revenues for partner institutions through more than 200,000 clinic visits last year. This revenue generation brought significant user acquisition cost savings of roughly RMB140 million.
As told by the CEO, the company conducted a pilot operation by establishing a model for light medical aesthetics procedures. The pilot, which was based on the second floor of the company's headquarters, showed encouraging results, escalating monthly revenue by roughly 13.8x during the second half of the year, with a CAGR of 71%. Furthermore, these clinics started to break even in just three months of formal operations. Building on the success, So-Young is planning to convert partner institutions into a chain of clinics, with the expansion aimed at six to seven cities throughout 2024.
Financially, So-Young International improved remarkably as evidenced in their earnings call. They reported a 20.1% year-over-year rise in revenues for the fourth quarter of 2023, translating to RMB390.6 million, and a movement from net loss to a net income of RMB31.3 million.
The growth is largely credited to So-Young Prime. Run on an asset-light platform for surgery and light medical aesthetics, it has played a crucial role in the company's growth by facilitating numerous clinic visits and generating substantial revenue for partner institutions.
CEO Xing Jin also spotlighted shifts in consumer trends within the medical aesthetics market, indicating that as the Chinese market matures, the industry is noticing a shift towards high frequency, high quality, and diversified services. Consumers are gradually opting for premium services and products, and competition is veering away from price and towards quality, prompting adjustments in the business strategies of e-commerce platforms and medical institutions alike. So-Young International has responded to these changes by building a substantial market share through the provision of premium services.
In its growth strategy, So-Young International has committed to strengthening collaborations with doctors and institutions and opening new clinics. The company also aims to enhance its presence in the medical aesthetics supply chain by adding new products to its roster.
Balancing the company's positive performance against the potential risks and challenges that the constantly evolving consumer behaviour and industry trends pose, it seems reasonable to say that So-Young has strategically positioned itself for growth in the near term, benefiting from the strong platform that So-Young Prime provides. Further expansion plans, such as increasing their network of clinics and launching innovative products, suggest careful consideration of market dynamics and a focus on delivering much-needed services in this high-growth sector. However, it is essential to contextualize these claims within the remarks made by So-Young International executives during the earnings call. As always, the company and its investors will need to stay attuned to shifts in the market and the changing needs of consumers in response to factors not always within their control.
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Earnings Call Analysis: So-Young International - SYXI