SoYoung Reports First Post-IPO Financial Results with Q1 Net Profit of RMB 45.9 Million, Highlighting Sustained Profitability

VCBeat (WeChat: vcbeat) has learned that on May 30, 2019, Beijing time, So-Young Technology, the first internet-based medical aesthetics service platform to go public, disclosed its first financial report since listing.

SoYoung Technology’s first-quarter report shows that as of March 31, 2019, the company achieved revenue of RMB 206 million, an 81.8% year-over-year increase; net profit reached RMB 45.9 million, a 49.9% year-over-year rise; and non-GAAP net profit amounted to RMB 51.9 million, up 65.8% year over year. This marks SoYoung Technology’s ninth consecutive quarter of sustained quarter-on-quarter and year-over-year revenue growth since it returned to profitability in 2017.

In addition, in its first-quarter report, New Oxygen Technology stated that the company’s revenue for the second quarter of 2019 is expected to reach RMB 260 million to RMB 280 million, representing a year-on-year increase of 71.05%–84.21%.

Jin Xing, CEO of So-Young, stated, “I am pleased that So-Young delivered strong results in its first financial report since going public. Our business continued to grow rapidly this quarter, and our net profit further increased. According to third-party data, the size of China’s medical aesthetics services industry is projected to reach RMB 360 billion by 2023, with a compound annual growth rate (CAGR) of 24%. Faced with such a vast market, I believe we have the right strategy and a strong team, and we are well-prepared to seize this growth opportunity. We will continue to invest in enriching our content, deploying AI capabilities on our platform, developing more value-added services, diversifying our customer acquisition channels, and expanding into adjacent consumer healthcare sectors to strengthen our competitiveness and solidify our dominant market leadership.”

Benefiting from the rapid development of China’s medical aesthetics services industry, So-Young Technology went public on Nasdaq on May 2, less than six years after its establishment, becoming the first internet-based medical aesthetics service platform in the industry to achieve a listing.

According to the prospectus of New Oxygen Technology, from 2016 to 2018, the company's revenue was RMB 49 million, RMB 259 million, and RMB 617 million respectively, with a compound annual growth rate (CAGR) of 255%; the company's net profit was -RMB 81 million, RMB 17 million, and RMB 55 million respectively, with a CAGR of 242%.

Combined with the Q2 2019 forecast data disclosed by So-Young in its first-quarter report, the company’s revenue scale is expected to maintain strong growth momentum. Behind this rapid performance growth lies the solid support of So-Young Technology’s market leadership position and its innovative business model.

In October 2018, a Frost & Sullivan research report pointed out that So-Young Inc.’s robust business model has positioned it as a market leader in audience reach, user engagement, total transaction value facilitated, and trustworthiness. Furthermore, its exceptionally high user engagement has made So-Young the most trusted platform among internet-based medical aesthetics service providers.

As evidence of high user engagement in the SoYoung Technology community, Beauty Diaries had surpassed 2 million posts on the SoYoung Technology platform as of December 31, 2018, with each post based on actual cases and accompanied by relevant case details.

Currently, the gross merchandise value (GMV) of medical aesthetic services facilitated on the New Oxygen platform increased by 68.4% from RMB 412 million in the first quarter of 2018 to RMB 694 million in the first quarter of 2019. The number of paying medical institutions on the platform grew by 37.4%, from 1,966 in the first quarter of 2018 to 2,701 in the first quarter of 2019.

As So-Young achieves leapfrog growth in both revenue and net profit, it is increasing its investments in content, technology, and other areas. These investments have become the company’s core competitive moat during its expansion and competitive phase, as well as the foundation for its rapid development.

SoYoung’s monthly active users (MAU) on its mobile platform grew from 1.08 million in Q1 2018 to 1.93 million in Q1 2019, representing a substantial increase of 78.7%. The number of paying users also rose from 68,900 in Q1 2018 to 127,300 in Q1 2019, marking a significant growth of 84.9%.

Yu Min, CFO of New Oxygen, stated, “Since turning profitable in 2017, our financial and operational performance has continued to improve this quarter. Both average monthly active users (MAUs) on mobile and the total number of paying users saw significant growth, rising by 78.7% and 84.9% year-over-year, respectively, reflecting the success of our platform in driving commercial monetization.”

In its prospectus, So-Young stated that the company would expand its business along the value chain of the medical aesthetics industry while entering the vast and rapidly growing consumer healthcare services market. To date, So-Young has successfully launched a suite of services for medical aesthetics providers and has gained first-mover advantages through business expansion in niche segments such as dentistry, dermatology, ophthalmology, gynecology, and health check-up services.

It is reported that the company has generated a small portion of its revenue by assisting other consumer healthcare service providers and certain beauty product sellers in distributing high-engagement content on the New Oxygen platform and social media networks.

In terms of innovation, So-Young was the first to introduce the concept of a community into the medical aesthetics service sector and leveraged AI technology to analyze users’ facial features, thereby determining the need for medical aesthetic procedures and predicting final outcomes. Furthermore, the company’s sustained investment in research and development has significantly solidified So-Young’s leading position in the industry.

In its prospectus, New Oxygen explicitly stated its ambition to become the most trusted consumer medical technology company, starting by transforming China’s medical aesthetics market and ultimately revolutionizing the entire consumer healthcare services industry.