So-Young International's Q4 2024: Strategic Contradictions in Merchant Support, Franchise Growth, and Margin Expectations

These are the key contradictions discussed in So-Young International Inc.'s latest 2024 Q4 earnings call, specifically including: Strategy for Merchant Support and Empowering Institutions, Adaptation of Strategies and Operations for Aesthetic Centers, Franchise Model and Chain Expansion Strategy, and Gross Margin Expectations:



Aesthetic Center Expansion and Revenue Growth:
- So-Young International's aesthetic treatment services revenue reached RMB81.3 million, marking a 701.6% year-over-year growth.
- This significant increase was primarily due to the expansion of their aesthetic center business, with 19 new clinics opened across nine cities, achieving RMB81.3 million in revenue.

Impairment Charge and Financial Performance Impact:
- The company reported a non-GAAP net loss of RMB53.2 million for Q4, compared to non-GAAP net income of RMB35.7 million in the same period last year.
- The impairment of goodwill amounted to RMB540 million due to impairment assessment related to their subsidiary, Miracle Laser, impacting their bottom line.

Cash Position and Financial Resilience:
- So-Young maintained a robust cash position with RMB1.25 billion in cash and cash equivalents, restricted cash, and term deposits as of December 31, 2024.
- The strong cash position is crucial for their strategy of investing in long-term growth opportunities and new business expansions.

Upstream Business Integration and Strategy:
- So-Young successfully integrated its subsidiary, Miracle Laser, into its upstream business unit, focusing on optimizing resource integration and in-house business synergies.
- The strategic integration aims to enhance product innovation and supply chain capabilities, further empowering So-Young's aesthetic centers and driving sustainable growth.

POP Business Optimization and Merchant Support:
- So-Young's POP business continues to generate stable earnings, supporting the growth of their new business initiatives.
- The company is optimizing the platform by strengthening partnerships with specialized institutions, refining management practices, and enhancing user experiences, aiming to ensure the long-term sustainable development of the industry.