So-Young International Inc. Reports Q4 and FY2024 Financial Results with Strategic Insights

So-Young International Inc. Reports Q4 and FY2024 Financial Results

So-Young International Inc. (Nasdaq: SY) recently shared its unaudited financial results for the fourth quarter and the entirety of fiscal year 2024. As a leading platform for aesthetic treatments in China, So-Young connects consumers with a variety of online services and offline experiences in the medical aesthetics field, demonstrating its resilience and strategic adaptability amidst a challenging environment.

Fourth Quarter 2024 Financial Highlights

During the fourth quarter of 2024, So-Young reported total revenues of RMB 369.2 million (approximately USD 50.6 million), which represented a slight decline from RMB 390.6 million reported in the same quarter of the previous year. This decline came as projections had anticipated.

However, it is crucial to note that the company faced a significant net loss of RMB 607.6 million (USD 83.2 million) in this quarter due to a one-time goodwill impairment charge totaling RMB 540.0 million (USD 74.0 million) associated with the subsidiary, Wuhan Miracle. In contrast, the previous year's corresponding quarter showed a net income of RMB 17.5 million. When considering non-GAAP measures, the net loss was RMB 53.2 million (USD 7.3 million) against a non-GAAP profit of RMB 35.7 million for the same quarter in 2023.

Operational Highlights

Operationally, So-Young facilitated aesthetic treatment transactions worth RMB 356.6 million, a drop compared to RMB 470.9 million year-on-year. The verified paid visits exceeded 39,500, showing a significant uptick from roughly 2,300 the year before. In total, over 81,500 aesthetic treatments were conducted, increasing from approximately 5,000 in the same period of 2023. Active users engaging with aesthetic centers surpassed 52,000, compared to about 2,900 users in the year prior.

The network expansion was also notable as So-Young reported 19 aesthetic centers fully operational across nine major Chinese cities—Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou, Chengdu, Wuhan, Chongqing, and Changsha—11 of which generated positive monthly cash flows.

Fiscal Year 2024 Overview

Throughout the entirety of 2024, total revenues reached RMB 1,466.7 million (USD 200.9 million), representing a slight decrease from RMB 1,498.0 million in 2023. The company recorded a net loss of RMB 589.5 million (USD 80.8 million), contrasting with a net income of RMB 21.3 million in 2023, mainly influenced by the previously mentioned impairment.

However, growth was evident in the aesthetic treatment services sector, which saw revenues increase dramatically to RMB 169.3 million (USD 23.2 million)—an impressive rise of over 1,200% from RMB 13.0 million previously. This growth highlights the successful extension of So-Young's branded aesthetic centers.

Looking Ahead

As of December 31, 2024, So-Young reported cash and cash equivalents totaling RMB 1,253.2 million (USD 171.7 million), a decrease from RMB 1,341.6 million the year before. For the first quarter of 2025, the company anticipates revenues between RMB 280.0 million (USD 38.4 million) and RMB 300.0 million (USD 41.1 million), which would mark a decline of 12% to 5.7% from the same quarter in 2024. The company emphasizes that this outlook is based on current market conditions and subject to change.

Strategic Comments

Xing Jin, Co-Founder and CEO, reflected on the company's performance, noting a focus on transformation strategies and investments in vertical integration and diversification to enhance competitive positioning in the evolving medical aesthetics landscape. The demand for standardized, high-quality medical aesthetic products and services remains crucial to their operational strategy.

CFO Hui Zhao added that the impressive expansion of the center network and enhancements to customer experiences lay the groundwork for sustainable growth. He emphasized the importance of controlling costs and driving operational efficiencies to navigate the dynamic market landscape effectively moving forward.

Overall, while So-Young International faced notable challenges in its recent financial performance, strategic growth through expanding its operational centers and dedication to enhancing service quality presents a sustainable path forward in the aesthetic treatment market.